Wang’s Happy Trading

Submitted By optiondragon

BRYAN ADAMS SUMMER OF 69

From Briefing.com

Periodicals Wrap-Up for Wednesday, July 9th
WALL STREET JOURNAL: Corporate advertisers are not flocking to YouTube despite the fact that the video sharing site attracts one billion views a day, upsetting Google’s (GOOG) expectations for a strong revenue stream, according to the Wall Street Journal. Total ad revenue for Google this year will be about $200M from the site, where the company is counting on growth beyond its text ads from Web searches…A day after Microsoft (MSFT) said it would be interested in reopening talks to acquire some of all of Yahoo! (YHOO) if Carl Icahn’s proxy battle succeeds, the Wall Street Journal reported that Yahoo! CEO Jerry Yang accused Microsoft of “trying to destabilize” the company “without a real desire to complete a deal”…ATLANTA JOURNAL CONSTITUTION: The Atlanta Journal Constitution reported that Comair, a subsidiary of Delta Air Lines (DAL), is set to cut 300 pilots and 220 flight attendants from its staff. The paper said the layoffs will go into effect in September when Comair cuts its flight schedule as part of Delta’s capacity cuts and will affect crew members based at Cincinnati/Northern Kentucky International Airport and New York’s John F. Kennedy International Airport…AL-ALAM: Iran successfully test-launched a long-range version of its Shahab-3 missile, according to Iranian news service Al-Alam. The missile can reach U.S. military bases in the Persian Gulf and Israel…

Iran successfully tests long-range missile-Alalam
Iran successfully test-launched a long-range version of its Shahab-3 missile, according to Iranian news service Alalam. Iran’s military fired the conventional missile, which has a one ton warhead and a range of 1,242 miles, or 2,000 kilometers, in tests conducted earlier today. The missile can reach U.S. military bases in the Persian Gulf and Israel, according to Alalam.

Google has a difficult time getting ad revenue from YouTube-WSJ
Corporate advertisers are not flocking to YouTube despite the fact that the video sharing site attracts one billion views a day, upsetting Google’s (GOOG) expectations for a strong revenue stream, according to the Wall Street Journal. Total ad revenue for Google this year will be about $200M from the site, where the company is counting on growth beyond its text ads from Web searches. One drawback to advertises on YouTube is that they don’t want to be seen along with amateur videos.

Apple’s new iPhone addresses problems of the original-WSJ
In his “Personal Technology” column Walter S. Mossberg reviews Apple’s (AAPL) newly updated iPhone which releases on Friday. The second generation iPhone 3G eliminates earlier criticisms by cutting the price and adding access to faster cellular phone networks. Says he: “…overall, I found it to be a more capable version of an already excellent device. And now that it’s open to third-party programs, the iPhone has a chance to become a true computing platform with wide versatility.”

Software: Seeing first real signs of end market demand weakening in Q2@COWN
Cowen’s checks indicate company’s will achieve their Q2 guidance but they are hearing that broad weakness is impacting close rates and pipelines, which will likely show up in 2H08 guidance. The firm continues to like ARBA and TRAK in the Apps space and CHKP, MFE, MSFT, QSFT, and DDUP in Infrastructure. The firm recommends avoiding back-end-loaded models lie KNXA and EPIC along with virtualization names CTXS, VMW, CVLT and SYMC.

CMP upgraded to Neutral from Sell@GSCO
Goldman upgraded CMP citing improving pricing power and solid global fertilizer fundamentals. Target $68.

Financial Institutions: JEF, KBW, PJC 2Q EPS estimates reduced; Outperform@FBRC
The firm reduced their projections due to weak industry fundamentals for the 2Q and the possible impact of continued principal trading losses along with additional write-downs within fixed income inventories. PJC’s target was decreased to $31 from $38. As the longer-term outlook for bank and thrift recapitalization continues to be a compelling source of future revenue, KBW remains FBRC’s favored name.

GOOG: Datapoints suggest potential Q2 upside, reiterate Buy@NEED
Needham believes GOOG’s quarter paced at least in-line with expectations and may exceed projections. The firm sees as much as 17c of upside to their previous Q2 estimate of $4.65.

Qualcomm-QCOM initiated with a Buy, target $61@SBSH
Citigroup believes the benefit of the company’s licensing model is increasing as 3G phones outgrow the overall handset market.

BIIB: Well-positioned to deliver in-line to modest 2Q upside@BARD
The upside is indicated by data from Avonex script which shows more upside to what the firm finds to be extremely low revenue projections. To reflect Roche’s winding down royalties on ex-US Rituxan sales, the firm reduced their 2009 EPS estimate; price target $63 and Neutral rating reiterated.

CLF: View recent weakness as a buying opportunity@JPMS
JP Morgan raised their 2009 estimate to $16 from $12.75 to reflect price increases and finds the valuation attractive at current levels. Shares remain Overweight rated.

GOOG: Europe checks slightly better than expected@RBCM
RBC Capital said Q2 checks in Europe were slightly better than expected despite the difficult macro advertising conditions. Shares remain the firm’s best domestic long idea. Target $600.

Schlumberger-SLB added to Focus List, maintain Overweight@JPMS
JP Morgan added SLB to their Focus List with a $140 target as they believe the company’s EPS re-acceleration will provide a positive catalyst, beginning with Q2 conference call.

CSCO: Enterprise spending remains tough@UBSW
UBS said CSCO checks indicate Enterprise spending remains tough and the US continues to slow. The firm said it would not be surprised to see CSCO guid flat to down for Q4 vs. the Street’s up 1.2% estimate QoQ. Shares are Neutral rated. Target to $25.50 from $27.

OII upgraded to Buy from Add@LYON
Calyon upgraded OII based on valuaiton. Target $86.

Software Trade Recommendations@GSCO
Goldman recommends two Pair Trades: Long SYMC/short CHKP and long CA/short BMC.

EBAY: Reiterate Buy rating ahead of Q2 results@BOFA
Banc of America’s data indicates that EBAY could slightly exceed expectations in the quarter and they continue to believe the company is relatively well positioned for consumer downturns.

RIG upgraded to Overweight from Neutral@JPMS
JP Morgan upgraded shares on valuation.

Investor Sentiment Update
According to Investors Intelligence, the number of bullish advisors dropped to a 14 year low. This adds further fuel to the prospect that some form of trading rally is taking place which may have begun with Monday’s ramp off the lows. The quality of the rally is going to depend greatly on the absence of further unanticipated negatives during earnings season. See our note from yesterday morning’s pre-market for further details.

Dow Jones Industrials Index-DJX: Pivot Points
The following are the pivot points for the Dow Jones Industrials Index (DJX). Pivot High: 11495.795, Pivot Low: 11279.545. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.

S&P 500-SPX: Pivot Points
The following are the pivot points for the S&P 500 (SPX). Pivot High: 1289.390, Pivot Low: 1258.510. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.

Nasdaq 100 Index-NDX: Pivot Points
The following are the pivot points for the Nasdaq 100 Index (NDX). Pivot High: 1895.940, Pivot Low: 1846.620. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.

Pre-Market Movers: Ahead of the Bell
Given the wild action in yesterday’s market, the relatively quiet pre-open session is a surprise. There are only a handful of issues moving significantly on relatively light volumes. We have posted this note far later than usual as we were waiting for volume to pick up. It is roughly where volume might be expected to be at 8:15. The volume leader so far this morning is Wachovia (WB), trading up +4.39% after Merrill Lynch upgraded the name to Neutral. Cisco Systems (CSCO) is next in terms of volume, trading down (-2.7%) after CEO Chambers suggested an economic recovery is seen by customers as a next year event, not latter-half 2008. UBS Investment Bank also lowered their estimates and cut the price target to $25. Apple (AAPL) is trading up +0.7% as the 3G iPhone is launched. QLogic (QLGC) is trading up +13.9% after the company raised their guidance for Q1 revenues. Alcoa (AA) is trading up +4.39% after it beat lowered revenue and forward earnings expectations in a report last night after market close.

Jim Cramer’s “Mad Money”
Cramer says the new market “leaders” are the health care stocks. Cramer said the safest and most consistent group in a market of high energy prices, high raw costs and a slowing economy is healthcare. He said the health care stocks are worth owning, as the big money managers move their money into these recession-proof names. Within the health care group, Cramer recommended Smith & Nephew (SNN) as his favorite. Cramer called today’s price of just over $52 a share an opportunity to own a great stock at a much too low price. SNN has a diversified portfolio of health care businesses. Cramer said all of its businesses are good and stable. Cramer said SNN’s recent earnings miss was due to its recent acquisition of a Swiss-based company, with $100M of additional sales costs along with $10M in unforeseen investigation costs. With the worst behind Smith & Nephew, he expects the company to begin seeing the benefits of their mergers going forward. He also likes the company’s $1.5B stock buyback program. Next, Cramer said he thinks we are still facing some major financial collapses in the banks and brokers. Despite small run-ups in those stocks recently, he’s worried about the fundamentals of C, BAC, WM and WB. And he’s worried about the relative silence surrounding Freddie Mac (FRE) and Fannie Mae (FNM) and brokers Lehman Brothers (LEH) and Merrill Lynch (MER). Cramer said the Federal Reserve is no longer in control of the banking situation and will be powerless to stop at least one of these institutions from failing. Moving to Steel — Cramer welcomed Dan Dienst, CEO of Sims Metal Mgmt (SMS) to find out if the mounting pressures on the steel industry are signaling a reversal for the group, or a buying opportunity. Dienst said that he is not seeing a deterioration of the steel market. Dienst said his company still has great earnings visibility, and he sees strong demand for steel in the foreseeable future. Cramer SAID, consider beginning a position in Sims or other steel stock. MAD MAIL: Cramer said he would not put General Motors (GM) CEO Rick Wagner on his Wall of Shame, as he is doing a lot of things right and could not have foreseen oil at $150 a barrel. Cramer then said he is a buyer of L-3 Communications (LLL) and is not worried about Obama dismantling the defense budget. LIGHTNING ROUND: (Bullish) CNX; CMCSA; ARBA; GOOG; YHOO; CHK; DE. (Bearish) TWX; NYX

Fast money position recap- Macke Owns (WMT), (MSFT), (EMC), (ATVI), (DIS); Pete Najarian Owns (AAPL), (CHK), (TSO), (XLF); Pete Najarian Owns (ANR) And (ANR) Puts; Pete Najarian Owns (FNM) And (FNM) Puts; Pete Najarian Owns (RIMM) Calls, (SLB) Calls, (YHOO) Calls; Finerman Owns (GS); Finerman’s Firm Owns (MO), (MSFT), (PM), (RAI), (SUN), (TSO), (VLO), (GE), (MRK), (PPH),  (JNJ), (PFE); Finerman’s Firm is Short (IYR), (IJR), (MDY), (SPY), (IWM); Finerman’s Firm Owns (TGT) Calls; Finerman’s Firm Is Long SPX Index Puts; Finerman’s Firm And Finerman Own (C) And (C) Leaps; Finerman’s Firm Is Short (XME) And Owns (XME) Puts; Terranoa Owns (YHOO), (IYT), (LUV), (CME), (FCX), (BNI), (GOOG), (XLF), (INTC),  (SU); Terranova Is Long Dollar Index Futures; Terranova is chief alternatives strategist at Phoenix Investment Partners; Phoenix Investment Partners Owns (POT), (ABT), (WM), (GOOG), (CME), (FCX), (AMZN), (MER), (FRE, (FNM),  (JPM), (IGE), (DBC), (DBV), (RWX);Phoenix Investment Partnerse Is Long And Short (AA).

Strong bounce at the end of the day could turn into something more so I am short term bullish here. We were so extrememly oversold with such negative sentiment that a strong bounce could end up being turned into a bottom. Let’s see if that happens through the next week and let’s hope to see a follow through. Shorting is starting to become more dangerous as the risk/reward ratio is more favorable to longs. Pick plays with a high probability of success, plan the trade and trade the plan, have focus and patience. Great luck and great trading.