Wang’s Happy Trading

Submitted By optiondragon

Fort Minor- Where´d You Go
In memory to all we’ve lost, thank you for giving us what we have.

From Briefing.com

Periodicals Wrap-Up for Tuesday, May 27th
WALL STREET JOURNAL: Last December Chemtura Corp. (CEM), a specialty chemicals company with a market cap of about $1.9B, said it might sell itself, and now Blackstone Group (BX) and Apollo Management are in talks to buy the company, the Wall Street Journal reported…In part one of a series to help explain the reasons why Bear Stearns (BSC) collapsed, the Wall Street Journal said that the troubled firm was torn apart by executives who couldn’t agree on what course to take, including raising capital and slicing mortgage and related bonds from its inventory. And each of about six attempts to raise capital fell part…ECONOMIC TIMES: The American investor and Berkshire Hathaway (BRK.A) chief Warren Buffett said the United States is already in a recession that is deeper and will last longer than the public expects, the Economic Times reported…TELEGRAPH: According to the Telegraph, Barclays (BCS) is planning to sell Barclays Life Assurance Company, its life assurance arm, which has over GBP7B of funds under management. Sources believe potential bidders for the unit may include Pearl, Swiss Re (SWCEY), General Re, Canada Life and XL Re. Market commentators believe that on an embedded value basis, the unit is currently valued at around GBP1B…

TLM volatility at 45 into report of CEO interest
TLM closed at $23.44. The Globe and Mail say’s Long-held speculation that China is seeking to buy Canadian oil and gas companies resurfaced yesterday, as a Chinese newspaper reported the China National Offshore Oil Corp (CNOOC) CEO may be looking to acquire TLM. TLM July option implied volatility of 45 is above its 26-week average of 40 according to Track Data, suggesting larger price movement.

UBS on Monday warned that that it may have to record losses on non-U.S. real estate as it seeks nearly $16 billion from shareholders to repair a dented balance sheet. “UBS remains very cautious about the net new money outlook in the near term,” added the world’s top manager of assets. But as the subprime troubles cool down, others have sprung up. UBS’s exposure to auction-rate securities, used mostly in municipal financing, increased to 11 billion francs ($10.7 billion) from 6 billion francs during the first quarter.
UBS said its loss-making positions in real estate markets outside the U.S. “could increase,” the Swiss bank said in the prospectus.
All told, UBS has taken about $19.2 billion in write-downs and losses to an $82.6 billion portfolio of securities tied mostly to the U.S. housing market.
UBS gapping down hard this morning causing further weakness in the financials.

EXC upgraded to Buy from Neutral@GSCO
Goldman upgraded EXC based on the merchant nuclear generation business.

CELG: Dacogen data in June could be potential catalyst@LEER
Leerink believes the Phase III EORTC trial of Dacogen could potentially be a positive catalyst for CELG after learning of details about the status and timing on the trial. The firm expects results to be available in June and maintains an Outperform rating on the stock.

WLP upgraded to Outperform from Market Perform@BMOC
BMO Capital upgraded WLP based on improved visibility and expectations that the turnaround will result in a quicker earnings rebound. Target $69.

SIGM: Expect in-line quarter, but Q2 guidance below Street@CSTI
Collins Stewart expects SIGM to report Q1 results in-line with their and the Street’s 39c/$60.6M estimates when the company reports on May 29. Collins is seeing a slower ramp at AT&T (T) on the U-Verse and slower than expected Blu Ray sell-through. As a result, they believe SIGM will guide July quarter revenues in-line with their estimates, but lower than consensus of $69M. They rate SIGM a Hold.

STP announces 7GW wafer supply agreement
Suntech announced that a definitive thirteen-year silicon wafer supply agreement has been signed with a subsidiary of Shunda Holdings Co. Ltd. Under the terms of the supply agreement, Shunda will supply Suntech specified annual volumes of silicon wafers with a total volume of approximately 7GW from 2008 to 2020.

STP announces strategic investment in Shunda
Suntech Power Holdings Co., Ltd. announced that it has acquired a minority stake in Shunda Holdings Co. Ltd, a manufacturer of solar wafers based in China, from Actis, a leading private equity investor in emerging markets, and Waichun Investment Fund, for a total consideration of $98.9 million.

RIGL: Pullback provides good buying opportunity@OPCO
Oppenheimer’s checks lead them to believe that Rigel will announce that its R788 showed signs of activity in fighting lymphoma during a Phase I/II trial. Rigel is scheduled to present interim data from the trial on June 5, and Oppenheimer maintained their Outperform rating.

Apple may begin subsidizing the iPhone to keep sales momentum-AppleInsider
French iPhone users have been reportedly contacted by Orange regarding discounts for the next-gen Apple (AAPL) iPhone. Readers of French technology site PCInpact, say that they have been offered a direct swap or deep discounting which is significant since it represents the first instance of a subsidy for the new phone.

Chipotle Mexican Grill-CMG.B initiated with an Overweight@JPMS
JP Morgan initiated the Class B shares of Chipotle with an Overweight as they believe the recent pullback provides a compelling entry point.

Greenspan still sees good chance for a recession-FT
The chances of a recession hitting the U.S. are still over 50%, Alan Greenspan said. However, the likelihood of a recession has dropped, and the chances of a severe recession battering the U.S. have fallen significantly, Greenspan added.

ASTI initiated with an Outperform@COWN
Cowen said ASTI’s unique thin-film solar technology is well suited for integrated applications.

Auction rate securities problems affect many companies-WSJ
Over 400 companies hold a minimum of $30B in auction rate securities, according to the Wall Street Journal’s look at first quarter earnings reports. The once reliable instruments have proven to be a major headache. Mark-downs are common but for companies that haven’t, accounting problems are mounting. “It hampers your financial flexibility,” says Gregory Fraser at Moody’s.

Data suggests Apple may be preparing to launch 3G iPhone soon-ImportGenius
Apple (AAPL) has been using a new type of shipping container, and an analysis of U.S. shipping records shows that the company’s imports have risen, sparked by a new type of product. These data points, along with dwindling inventory of first generation iPhones, suggest that Apple will announce the new 3G iPhone at its World Developers Conference, which kicks off June 9, according to Ryan Petersen of ImportGenius. Citigroup has predicted that Apple will unveil the 3G iPhone at the conference.

Farmers pressured by rising fertilizer prices-WSJ
Fertilizer prices were up 65% in April from a year ago illustrating the pressure farmers are under as they also confront increases in machinery, fuel, seeds and chemicals, which affects how much they can grow, according to the Wall Street Journal. Escalating fertilizer prices “defies rational explanation,” says Robert Carlson, head of the North Dakota Farmers Union. Producers deny charges of price gouging. Now North Dakota Senator Dorgan is asking the FTC to take a hard look at the industry.

QCOM added to Alpha List, maintain Buy@PIPR
Piper believes QCOM is well positioned for strong earnings growth. Target to $60 from $54.

Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily- 100 list for the week of May 23: Venoco Inc. (VQ), Gorman Rupp (GRC), Anadarko Petroleum (APC), Compass Minerals International (CMP), Petroleo Brasileiro SA (PBR), Darwin Professional Underwriters (DR), Clean Harbors Inc (CLHB).

Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of May 23: Excel Maritime Carriers (EXM), Koppers Holdings (KOP), Diana Shipping (DSX), Dawson Geophysical (DWSN), Cameron International (CAM), Systemax Inc. (SYX), Millicom Intl. Cellular (MICC).

Fast Money position recap- Macke Owns (HAS), (MSFT), (INTC), (WMT); Jon Najarian Owns (AAPL), (AMR), (BHI), (BUD), (DELL), (FTO), (VLO), (OII), (CPX); Jon Najarian Is Short (LEH); Seymour Owns (AAPL), (F), (INTC), (MER), (MSFT), (TSO); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE).

Financials is all you need to know because it really starts and ends there. The UBS news is pulling down the financials again as this has become deja vu all over again. GS and LEH were downgraded by BofA which didn’t help any. The S&P is sitting on a support zone of 1350-1375.
The overall theme going forward seems to be to short financials, brokers and banks when overbought and buy the strongest energy names and setups when oversold. The market looks short term oversold and we should see some support come in for the financials which should mark the first sign of a turnaround for the market. If not, the market could trail down further. The most interesting chart over the weekend was that of the RKH and ^BIX, both of which are showing a possible breakdown in the banking sector. A breakdown would be considered negative for the market overall and could really put a damper on things going forward. So keep an eye on it.
DUG, QID, USO, SKF, XLF are a couple things I’ll be watching today. Stay focused, keep positive and pick plays with a high probability of success. Watch for Consumer Confidence and Home Sales at 7 AM PT, which should move the market. Good Luck and great trading.