Wang’s Happy Trading

Posted By Optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Tuesday, August 26th
WALL STREET JOURNAL: Ticketmaster (TKTM), now spun off from IAC/InterActiveCorp (IACI), just won a gold medal of its own, selling 6.8M tickets to the Beijing Olympics, a new record. Now the company is hoping to increase its Chinese presence in a fragmented, yet growing market, the Wall Street Journal reported…To head off more bank failures, federal regulators, including the Federal Reserve and the Office of the Comptroller, are putting more and more large and small banks on probation until they solve their problems. According to the Wall Street Journal, they are issuing memorandums of understanding which can force banks to, among others steps, raise capital, cut risky loans and stopping dividends…REUTERS: Reuters reported that North Korea is set to suspend its nuclear disablement and may consider restoring its Yongbyon reactor, which can make material for atomic bombs. According to a foreign ministry official and reported by the KCNA news agency, the measure was effective on August 14 and came after Chinese President Hu Jintao held talks with South Korean president Lee Myung-bak…Reuters also reported that Terry Johnson, General Motors’ (GM) Middle East chief, said the company received interest in its Hummer brand from two separate Gulf Arab investors. Johnson, who said this may be a “very realistic solution,” also commented keeping the brand is still an option…

Asian Markets Wrap-Up for Tuesday, August 26
Financial stocks spurred a decline in a majority of Asian countries. JAPAN: The Nikkei 225 sank 0.78%, to 12,778.71. Brokerage firm Nomura Holdings (NMR) lost 2.1% and Orix (IX), a financial company, fell 2.7%. HSBC reduced their ratings on Japanese regional banks, and Fukuoka Financial Group, a regional bank, declined 4%. Suroga Bank, another regional lender, retreated 3.4%. Property developer Tokyu Land Corp. fell 3.5%. Retailer Aeon dropped 4%. CHINA: Brokerage companies led a decline. The CSI 300 Index fell 2.88% to 2,331.53. Brokerage house Haitong Securities slumped 7.8%. Citic Securities, another broker, lost 4.3%. China Life Insurance (LFC) inched down 0.9%. Air China (AIRYY) sank 7.9% and China Southern Airlines (ZNH) retreated 7.2%. AROUND ASIA: Taiwan’s Taiex Index fell 0.94%, while South Korea’s KRX 100 slumped 0.96% and Indonesia’s Jakarta Composite retreated 0.92%…Shipbuilder Hyundai Heavy Industries (HYHZF) intends to bid for a controlling stake in Daewoo Shipbuilding (DWOSF).

Federal regulators pounce on struggling banks to fix problems-WSJ
To head off more bank failures, federal regulators, including the Federal Reserve and the Office of the Comptroller, are putting more and more–large and small banks–on probation until they solve their problems, according to the Wall Street Journal. They’re issuing memorandums of understanding which can force banks to, among others steps, raise capital, cut risky loans and stopping dividends. More memorandums have been issued so far this year than in all of last year. “The increase in [memorandums] is not surprising given the more challenging market conditions faced by many banking organizations,” says Roger Cole, the Fed’s director of banking supervision and regulation. They “are useful in specifying weaknesses in risk management and other areas that need to be addressed by bank management.”

Mining stocks slump-WSJ
As commodity prices fall and investment costs escalate, mining companies are getting the shaft, according to the Wall Street Journal’s “Heard on the Street”.The DJ Basic resources STOXX index has slumped 26% over the past three months, as theses companies trade at low multiples of expected earnings. Investors are having doubts as to whether profit grow can sustain itself, and while the sector may appear cheap it’s not.

Russia cancels NATO Chief’s visit-Dow Jones
Russia recognizes independence of separatist Georgian regions-Bloomberg

Goldman, Merrill are expanding their Indian operations-Business Standard
Goldman Sachs (GS) and Merrill Lynch (MER) are making major moves in an attempt to bolster their presence in Indian markets. Goldman will launch a credit desk in India by the end of the year, while Merrill has doubled the number of its employees working on credit debt/mezzanine transactions for the Asia Pacific region, which includes India. Merrill is also considering creating a Singapore-based team that will concentrate on transactions for the Indian market.

Retail expansion in India stalls-WSJ
India’s retail sector is a $350B sales industry which is expected to double over the next several years. But not now, reports the Wall Street Journal. Growth has slowed as competition has taken off. Job growth is also down and global retailers who have entered the Indian market have been forced to take a second look. “I was an eternal optimist; now I have become a realist,” says Kishore Biyani, Pantaloon Retail India’s chairman, the country’s biggest retailer as measured by sales. Says he: “Everybody has miscalculated.”

Government tells Korean bank not to bid for Lehman-Times Online
Sources close to the Korean Development Bank say that it will pull out of negotiations with Lehman (LEH) since the government in Seoul said the transaction represents too great of a risk at this time.

U.S. equity futures now point to a lower open as crude oil spikes
U.S. stock futures have reversed their earlier modest gains after the last two volatile, low-volume sessions with traders waiting for three reports on housing to hunt for clues as to whether the long-battered market is showing any sign of recovery. Currently, S&P 500 futures are down 1.1 points to 1,265 and Nasdaq futures dropped 2 points to 1,8913. Dow industrial futures declined 6 points to 11,378. Tuesday’s session provides a slew of housing releases: The Case-Shiller and Ofheo house price gauges as well as new-home sales for July. The Case-Shiller data is out at 9 a.m. ET, and the Ofheo and new-home data is due at 10 a.m. The inventories in the new home sales data, due out at 10:00 and estimated at 525,000 will be closely watched as yesterday’s better-than-expected existing home sales were offset by a sizable increase in inventories as foreclosures flooded the market. Within the last hour, Crude prices have spiked as the latest weather reports increases concerns that Hurricane Gustav may disrupt oil supplies in the Gulf of Mexico. Crude is now down 71c to $114.40 a barrel on Gustav’s movement. Crude prices were lower this morning as poor German IFO and GDP data highlighted fears that a global slowdown would result in reduced demand for oil.

Starwood Hotels-HOT checks show erosion in domestic rates@TWPT
Thomas Weisel said their latest room rate shows erosion in domestic leisure rates for HOT and that the slow summer and stronger dollar impact could be headwinds heading into Q3. The firm said they remain downbeat on hotel stocks and HOT.

Biogen Idec-BIIB: Added Tysabri language could move shares higher@BWS Financial
BWS believes the announcement by the FDA and BIIB trying to add language to the label of Tysabri could be welcomed news, but they expect shares to remain in a trading range until more safety data is presented by BIIB in September. The firm maintains a Buy rating.

Apple-AAPL: Remain bullish on iPod, Mac, and iPhone momentum@MWRE
FTN Midwest expects new iPods just after Labor Day and new Mac notebooks in Mid-September. Shares are Buy rated.

Commercial Banks with credit quality concerns@RBCM
RBC Capital said their greatest quality concerns remains with banks that have large residential construction concentrations or those that have rapid deterioration. They are: VNBC, CACB, PFBC, CPF, and WCBO. The firm is also worried about banks with insufficient capital/reserves to withstand expected loan losses, including VNBC, WCBO, and CACB. The analyst remains cautious on CVBF, PCBC, UMPQ, and CYN given risk inherent in their loan and geographic exposures. The analylst adds that WABC and SIVB are best positioned as we head deeper into the real-estate driven downturn.

Apple to hold September event to introduce new products?-MacRumors.com
September 9th may be the day Apple (AAPL) brings out updates for the iPod nano and iPod Touch, according to industry rumors.

Guess-GES: Reiterate Strong Buy following product preview@NEED
After viewing the company’s Holiday and Spring collections, Needham is impressed by the improvement in quality and the merchandise. The firm believes GES’s sales momentum will continue.

CME Group-CME target lowered to $415 from $475, maintain Buy@BOFA
Banc of America expects near-term headwinds to continue from credit issues and economic uncertainty but continues to find the long-term story attractive. The firm recommends waiting for a better entry point or a turn in fundamentals to build positions and prefers Intercontinental Exchange (ICE).

Amazon.com to acquire Shelfari-Seattle Post-Intelligencer
According to sources with knowledge of the matter, Amazon.com (AMZN) is set to acquire Shelfari, nearly three weeks after acquiring AbeBooks, which holds a stake in Shelfari rival LibraryThing. Shelfari, a social networking startup for book lovers, received funding from Amazon and other investors in February 2007.

Correction: Corinthian Colleges-COCO sees FY09 EPS 58c-63c vs. consensus of 55c
Sees FY09 revenue $1.21B-$1.25B vs. consensus of $1.22B. Sees FY09 start growth of 7-9%. Sees Q1 EPS 6c-8c vs. consensus of 8c, sees Q1 revenue $285M-$290M vs. consensus of $283.31M, sees Q1 start growth 4-6%. Please note the FY09 consensus is 55c and $1.22B, respectively, not 40c and $1.08B. :

Sears Holding-SHLD put volatility elevated at 67 into financial release
SHLD closed at $87.08. SHLD is scheduled to release Q2 results on August 28. SHLD September call implied volatility is at 46, puts are at 67. SHLD average option implied volatility over the last 26-weeks is 45 according to Track Data. SHLD puts are priced higher than calls because SHLD is difficult to borrow.

Follow-up: Salesforce.com-CRM upgraded to Buy from Hold@SBSH
Citigroup upgraded shares on valuation following the recent weakness and expects positive seasonality in the second half of 2008. Target remains $70.

MasterCard-MA initiated with an Outperform@WBLR
Visa-V initiated with an Outperform@WBLR

Anadarko Petroleum-APC announces $5B Share Repurchase Program
Anadarko Petroleum announced that its Board of Directors has authorized a share repurchase program of up to $5B. At the current trading price, this amount represents approximately 18% of the company’s outstanding common shares. Share repurchases will be funded with free cash flow generated by the company’s operations. Anadarko intends to repurchase approximately $600M worth of shares prior to year-end 2008. The authorization extends through August 2011 and replaces prior programs.

(Important note on how to use this upgrade/downgrade list with analyst comments and news….you must parse out the factual data (Factual data is the most important) from the opinionated data and always take all analyst comments with a grain of salt. Do not follow blindly with their recommendations. Remember that technicals are the most powerful force in short term direction for stock prices due to the law of supply and demand.)

Jim Cramer’s “Mad Money”
Cramer told viewers, that until the crisis that has enveloped Freddie Mac (FRE) and Fannie Mae (FNM) is finally resolved, the markets will continue to decline. In order for the market to finally bottom, said Cramer, housing has to stabilize. That requires lower interests rates, lower home inventory and higher home sales, and a resolution with Fannie and Freddie. Cramer said he stands by his prediction that the markets will not take out the lows set on July 15, but that prediction will not hold if the government doesn’t step in soon. He started a new “Mortgage Mess Countdown” to see just how long it takes the Treasury to act and save the market from its continued slide. Cramer said he’s putting his money with House Speaker Nancy Pelosi and investing in Clean Energy (CLNE). He cited a recent Wall Street Journal article, which reported that Pelosi owns somewhere between $100,000 to $250,000 worth of stock in the alternative fuel provider. Cramer last recommended Clean Energy on August 1, along with Fuel Systems (FSYS). FSYS is up 46.6% since then. Cramer said Clean Energy should also spike soon as it stands to get a boost from the passage of a November ballot initiative in California, which calls for $5B to be earmarked for the purchase of 70,000 trucks and 150,000 cars in the state to be converted to compressed natural gas. Cramer also likes Clean Energy on the heels of its better quarter. Cramer told investors to read between the lines when it comes to Nordson (NDSN), which fell 23% on Friday after it missed earnings and lowered forecasts. Cramer explained that the seemingly small earnings miss signifies something much more profound and management’s credibility is gone. With 22% of Nordson ’s sales in the housing sector and another 7% exposed to autos, Cramer predicted zero chance of a rebound for the stock in such a tough market. He predicted Nordson will have to retreat another 12 points before value investors would consider it a bargain. Cramer talked with Glenn Tullman, chair/CEO of Allscripts (MDRX). Cramer last recommended MDRX on July 1, but also advised investors to take profits after the Medicare bill was passed. Tullman said the Medicare bill not only requires physicians to use electronic prescription systems like the ones Allscripts offers, but actually penalizes them for not doing so. Cramer called MDRX a good story and recommended again owning the stock. SUDDEN DEATH: (Bullish) WIN; (Bearish) SAN; VOD. LIGHTNING ROUND: (Bullish) CSCO; DKS; CHD. (Bearish) ATI.

Fast Money position recap- First Moves: Pete likes TIE, Jon likes long UNG, Guy thinks XTO is a buy, Joe thinks you should step back from the market.
Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (CSCO) Call Spread, (RIMM) Call Spread, (TIE) Call Spread; Pete Najarian Owns (AAPL) And Is Short (AAPL) Calls; Pete Najarian Owns (XLF) And (XLF) Puts And Is Short (XLF) Calls; Pete Najarian Owns (LEH) Put Spread; Pete Najarian Owns (MS) And Is Short (MS) Calls; Jon Najarian Owns (AAPL), (C), (RMBS); Jon Najarian Owns (TIE) Calls; Jon Najarian Owns (BRCM) Call Spread; Jon Najarian Owns (LEH) Put Spreads, (STI) Put Spreads; Terranova Owns (YHOO), (AAPL), (RIMM), (SA), (VLO), (EOG), (NOV), (POT), (X), (KOL),  (GS), (FCX); Terranova Owns (AIG) Puts.

Art Cashin believes we should retest 1200 and from the looks of the daily technicals and the failure of 1290-1300, it looks like that could be a higher percentage probability in the next 2 months. He says that a down September will end with a bottom in October, so plan accordingly. I think after the recent technicals and the recent failure of 1290-1300 that we could be at least range bound for the foreseeable future. Art Cashin also said that there is evidence that the credit markets are starting to freeze again due to again the fear of the unknown, and counter-party risk. The banks don’t know who to trust and who to lend too with an assurance they won’t be left holding the bag. We have some evidence of a consumer slowdown in JDSU’s earnings number due to lower credit card creations. This is supportive evidence of why MA and V are so weak lately.
I am going more into cash and now either finding short term trading opportunities (more short than long) and other novel strategies such as Luck o’ the Irish’s Triplicity Oscillator Trades. New Optiondragon Leading Indicator Basket Formula, yesterday the market moved inversely to FNM and it seems that the market wants FNM and FRE to be taken over but there are powerful shareholders who do not want that to happen. But by them floating FNM they could cause further weakness in the markets and financials. Yeah I know its weird!
Pick plays with a high probability of success, have focus and patience, run technicals through support and resistance. Great Luck and Happytrading.

LIB= XLF + IWM + (GOOG + AAPL + RIMM) + USO (inverse related) + .5(UUP-US Dollar) + .5 (FNM inverse related)