Wang’s Happy Trading

Posted By Optiondragon for myhappytrading.com, to read other great options and market articles please visit and join for free!

From Briefing.com

Periodicals Wrap-Up for Thursday, September 4th
WALL STREET JOURNAL: The International Association of Machinists and Aerospace Workers, Boeing’s (BA) largest union, voted to strike but will stay on the job for 48 hours to see if an agreement can be reached, the Wall Street Journal reported. The 26,800 machinists rejected a three year contract…The Wall Street Journal also reported that the Commodity Futures Trading Commission is investigating a number of yet unnamed energy firms to see if they reported inaccurate data to influence perceptions about crude oil supply and demand…NEW YORK POST: The New York Post learned that American International Group (AIG) may look to form a separate company that would hold billions in securities and is working with JP Morgan (JPM) to arrange a “good insurer/bad insurer” structure. An arrangement would allow AIG to offload some toxic assets from its balance sheet…THE BOND BUYER: JP Morgan will exit the muni derivatives market, the Bond Buyer reported. According to an internal memo, the firm will stop structuring interest-rate derivative products for governmental municipal issuers because the risk-return profile of providing the products “did not justify the resources it required”…

Asian Markets Wrap-Up for Thursday, September 4
Stocks declined, led by commodity and shipping companies. JAPAN: Glass makers and shipping companies spearheaded a retreat. The Nikkei 225 lost 1.04%, to 12,557.66 . Glass makers fell after U.S. glass maker Corning (GLW) reduced its EPS forecast on lower than expected demand for TV screens. Nippon Electric Glass (NPEGF) plunged 14% and Asahi Glass (ASGLF) retreated 3.4%. Shipping company Mitsui O.S.K. sank 7.3%.and Kawasaki Kisen Kaisha (KAKKF), another shipping company, lost 5.9%. Honda Motor (HMC) gained 3.1%, after the company reported only a 7.3% drop in its U.S. August sales. HONG KONG: The Hang Seng Index dropped 0.95%, to 20,389.48. Ship operator China Cosco (CICOF) fell 6.2%. Huiyuan Juice dropped 7.7%, on concern that Chinese regulators will prevent Coca-Cola (KO) from taking over the company. China Communications Construction retreated 14%. Kingway Brewery Holdings (KYBWF) gained 24%. Aluminum Corp. of China dropped 1.1%. BOC Hong Kong (BHKLY), a bank, fell 2.2% after Citigroup initiated the stock with a Sell rating. AROUND ASIA: China’s CSI 300 Index added 0.23%, but South Korea’s KRX 100 lost 0.43% and Taiwan’s Taiex sank 2.62%…Australia reported a trade deficit of $596M in July, after the country had a trade surplus in June.

Boeing’s union to strike but walkout delayed 48 hours-WSJ
The International Association of Machinists and Aerospace Workers, Boeing’s largest union, voted to strike but will stay on the job for 48 hours to see if an agreement can be reached, reports the Wall Street Journal. The 26,800 machinists rejected a three year contract.

Merrill, Korean company can’t agree on price for bad debt-Bloomberg
Merrill Lynch (MER) and Korea Asset Management haven’t been able to reach a deal on the sale of some of Merrill’s bad loans to the Korean company because of a disagreement over the assets’ value, the Korean company’s CEO said. Korea Asset can be patient because it thinks the U.S. financial crisis will cause prices for bad debts to decline further, the company’s CEO added.

AIG may spin off its problematic assets-NY Post
AIG (AIG) is thinking of launching a separate company to hold some of the insurer’s troublesome securities, according to inside sources. AIG has reportedly hired JPMorgan (JPM) to work on the plan.

Lessons from the Ospraie Fund-WSJ
It had a solid reputation but lost 39% of its value this year, equal to about $1.3B, and most of that was just last month, and the result is that Ospraie Management’s Ospraie Fund is being shut down. Why? The reliance on a star manager whose portfolio turnover was substantial from March to June with stocks focused on resource companies such as energy and mining, according to the Wall Street Journal’s “Heard on the Street”. Lehman Brothers Holdings (LEH) and Credit Suisse (CS) were both investors in Ospraie’s management.

U.S. equity futures continue to point to a lower open
U.S. equity futures continue to point to a lower open as many retailers report sluggish August sales. Wal-Mart (WMT) however said sales were higher and that September sales are expected to increase 2% to 3%. Investors received reports on the economy when the non-farm productivity numbers showed an increase of 4.3% versus an expected increase of 3.5%. The unit labor costs showed a decline of -.5% versus an expected 0.0%. In addition, the initial jobless claims came in at 444,000 versus an expected 420,000, and the continuing claims came in at 3.4M versus an expected 3.42M.

Joy Global-JOYG upgraded to Accumulate from Neutral@BUCK

Medivation-MDVN: Pfizer is an attractive partner in Dimebon program@LEER
LEER feels that through Dimebon’s commercialization, MDVN should be in a good position economically to broaden their commercial opportunities. The firm increased their fair value of the stock to be in the $50 range from the $40 range and has reiterated their Outperform rating.

Terex-TEX: Down Sharply on Lowered Guidance: Bearish Pattern
The stock is off (-10%) in the pre-market after the company sharply lowered guidance for FY08 (see note here for details). The stock has been in a downtrend since peaking at lifetime highs in July 2007. On the weekly chart there is a bearish wedge (or flag) that will be active based on current pre-market price. The pattern has a long-term downside objective to the $24 area. Support levels to watch as potential downside objectives are at $41.66, $40.83, $40.06, $37.69, $36.99, $35.98, $34.01, $31.95, $31.22, $30.15. Resistance is at $43.16, $43.95, $45.00. Only a breakout back above the $45 area would invalidate the bearish price pattern. Related stocks that may also move with TEX are United Technologies (UTX), Caterpillar (CAT), Deere (DE), Illinois Tool Works (ITW) and Parker-Hannifin (PH).

Mining: Still Prefer BUCY over JOYG@GSCO
Goldman said they still prefer BUCY over JOYG due to stronger execution, less steel inflation risk, and leading position in dragline market. The firm views weakness as an attractive long-term buying opportunity. Shares of BUCY are Buy rated and JOYG are Neutral rated.

Clean Energy Fuels-CLNE awarded contract by City of Los Angeles
The Sanitation Bureau of the City of Los Angeles has awarded Clean Energy Fuels a contract for up to 10 years to supply Liquefied Natural Gas fuel for the City’s growing fleet of 340 LNG refuse trucks — the largest municipal LNG-powered refuse fleet in the United States.

Steel Sector coverage transferred with a Neutral from Attractive@GSCO
Goldman downgraded the Steel sector based on risks from the stronger dollar, “China fear”, the weak macro environment, and soft steel and scrap prices. The firm upgraded STLD to Buy from Neutral, removed X from the Conviction Buy List, and downgraded CMC to Neutral from Buy.

Fed Bank Pres Fishers speaks on Economic Challenges in Houston at 1:40pm on 9/4

Priceline.com-PCLN initiated with a Hold@KEYB
Keybanc initiated PCLN with a Hold due to high expectations, difficult comps, and a more challenging environment.

Internet advertising grows but the wealth is not being spread around-WSJ
In the second quarter Internet advertising in the U.S. grew 20% and strong growth is expected to continue. But most of those are basic search ads, the bread and butter of Google (GOOG), the chief beneficiary of the gains, reports the Wall Street Journal. Display ad spending, counted on by Yahoo (YHOO) , Microsoft (MSFT) and others, are getting little traction.

IT Hardware Sector & Storage Sectors initiated@LYON
Calyon initiated the following stocks: Buy rated: HPQ (target $60); Add rated: AAPL ($190), EMC ($17), NTAP ($28), STX ($17), WDC ($30), and XRTX ($17); and Neutral rated: DELL ($23), JAVA ($9), BRCD ($8), ELX ($13), QLGC ($19), and DDUP ($24).

Amazon.com-AMZN: Recommend investors swap out of EBAY into AMZN@SOLE
Soleil believes buyers are increasingly demanding standardized shipping, payment, and search options, which they point out Amazon.com (AMZN) can provide but eBay (EBAY) can not. The firm tells investors to swap out of EBAY and into AMZN.

(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 commended the FDIC for adopting a plan which he has been advocating for months, in regards to their handling the failure of Integritiy Bank, one that splits failed entities into “good” and “bad” parts. The Integrity deal calls for Regions Financial (RF) to acquire Integrity’s “good” parts, mainly $900M worth of deposits, while the FDIC assumes the “bad” parts, all the failed/failing loans. He called the FDIC’s shift in strategy terrific news for stronger banks which are now poised to pick up great assets from failing entities. Cramer recommended BB&T (BBT), a strong, yet conservative, Southern bank with a 6.36% yield that is ready to reap the rewards of the FDIC’s new strategy. He called BB&T the logical choice to acquire assets from future failed banks. Cramer put Joy Global (JOYG) pres/CEO Mike Sutherlin in the hot seat to get answers about the company’s recent earnings miss. Sutherlin said he felt the market overreacted to the company’s margin issues. Sutherlin said JOYG is in a strong position with share buybacks, solid cash reserves, and a backlog extends well into 2010 to 2011. He still sees China as desperately short of coal and expects strong demand to return soon. Cramer predicted more pain for Joy Global. He said the oil service sector will have to bottom first before he would recommend buying Joy Global and his other favorite Bucyrus (BUCY). MAD MAIL: Schering-Plough (SGP), he still thinks negative press surrounding the company will limit any upside. IBM (IBM) Cramer said the sell-off was overdone, and is a buying opportunity. CPFL Energia (CPL), Cramer still thinks its a buy. He also reiterated buying Celgene (CELG) and said he prefers CSX (CSX) over railroad competitor Norfolk Southern (NSC). SUDDEN DEATH: (Bearish) CRM; DNA; STLD. LIGHTNING ROUND: (Bullish) AEM; RIMM; TAP; SQM; FRO; RHT. (Bearish) AUY; ADCT; MGM; EBAY; EGLE; CVS.

Fast Money Position Recap- Macke Owns (MSFT), (WMT), (UUP), (DIS); Macke Is Short (TM); Adami Owns (BTU), (C), (AGU), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman’s Firm Owns (MSFT), (NOK), (SUN), (TSO), (VLO), (JCP); Finerman’s Firm Owns (AAPL) Calls, (JCG) Calls, (HUN) Calls; Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Is Short (XLF), (IYR), (IJR), (MDY), (IWM), (SPY), (COF), (BBT), (BAC); Pete Najarian Owns (AAPL) And (AAPL) Collar, Pete Najarian Owns (EP) Call Spread, Pete Najarian Owns (ETFC), Pete Najarian Owns (FTO) Call Spread, Pete Najarian Owns (LEH) Put Spread And (LEH) Call Spread, Pete Najarian Owns (NOK), Pete Najarian Owns (SCHW) Calls, Pete Najarian Owns (WFMI) Put Spread, Pete Najarian Owns (XLF) And (XLF) Collar.

Markets are down in premarket and 1265 is the immediate support right here. The market is really lackluster and we have some serious drops in energy and basic materials pushing down the S&P. Oil inventories should move the market this morning and the market will digest the jobless claims just out. Keeping nimble! The Trading room should have tons of trading ideas to pick through. Pick plays with a high probability of success, have focus and patience, run technicals through supply and demand. Great Luck and HappyTrading!

Think Fractally!!! Nature and markets are run on formulas!!!

Australia’s largest butterfly, the birdwing (Ornithoptera priamus) blends into a green leaf. Female birdwings can have a wingspan of nearly 8 inches (20 centimeters).