Wang’s Happy Trading

Posted by Optiondragon for myhappytrading.com, please join us the best social network for traders and investors for free.

From Briefing.com

Periodicals Wrap-Up for Monday, September 8th
WALL STREET JOURNAL: The latest victim of the mortgage crisis is Washington Mutual (WM) CEO Kerry Killinger who has been forced out of the country’s largest thrift institution, the Wall Street Journal reported. His replacement is Alan Fishman, chairman of Meridian Capital Group…Philip Morris USA parent Altria (MO) is today expected to announce that it will pay $10.3B to acquire UST (UST), combining the Marlboro and Skoal brands, the Wall Street Journal reported…NEW YORK TIMES: The Treasury Department took control of the two mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE), outlining a four-part rescue plan, guaranteeing to provide enough liquidity to ensure solvency and avoid bankruptcy. At a news conference, Treasury Secretary Paulson announced that he dismissed the chief executives of both companies and named replacements, the New York Times reported…CRAIN’S: According to Crain’s, the strike by the International Association of Machinists and Aerospace Workers could cost Boeing (BA) $100 million per day in lost product and delay the 2009 delivery target for the 787…

Asian Markets Wrap-Up for Monday, September 8
Asian stocks advanced as a result of the U.S. government’s takeover of Fannie Mae (FNM) and Freddie Mac (FRE) on the belief that it will help the worldwide financial crisis…JAPAN: The Nikkei 225 Stock Average gained 412.23, or 3.4%, to 12,624.46, while the broader Topix index increased 45.57, or 3.9%, to 1,216.41. Mitsubishi UFJ (MTU) jumped 13% to Y850. Mizuho (MFG) added 12% to Y463,000. Sumitomo Mitsui Financial Group surged 15% to Y674,000. Orix (IX) also added 15% to Y13,700. Aiful Corp. leapt 9.8% to Y829. Tokyo Electric Power Co. lost 2.9% to Y3,010. Nippon Paper Group was down 3% to Y329,000…CHINA: The CSI 300 Index retreated 56.91, or 2.6%, to 2,126.52. Vanke lost 5.7% to 6 yuan. Shanghai Industrial Development Co. slid 10% to 8.33 yuan. Poly Real Estate Group Co. fell 9.9% to 12.03 yuan. China Petroleum (SNP) tumbled 7.6% to 9.13 yuan. Bank of China was up 1.2% to 3.52 yuan…AUSTRALIA: The S&P/ASX 200 advanced 190.40, or 3.9%, to 5,067.50. James Hardie Industries (JHX) rose 8.6% to A$5.33. Origin Energy jumped 13% to A$17.65. Queensland Gas Co. surged 30% to A$4.80. Mincor Resources fell 3% to A$1.44. Energy & Minerals Australia climbed 41% to 49.5 cents. Paladin Energy added 8.6% to A$5.45…AROUND ASIA: In Hong Kong, the Hang Seng Index advanced 860.99, or 4.3% to 20,794.27. HSBC (HBC) increased 5.5% to HK$123.70. China Construction Bank Corp. was up 3.3% to HK$6.20. Industrial & Commercial Bank of China rose 3.7% to HK$5.28…In South Korea, the Kospi advanced 72.27, or 5.2%, to 1,476.65. Samsung Electronics Co. gained 4.4% to 543,000.

Treasury seizes Fannie Mae & Freddie Mac-NY Times
The Treasury Department announced that it will take control of the two mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE), outlining a four-part rescue plan, guaranteeing to provide enough liquidity to ensure solvency and avoid bankruptcy. At a news conference, Treasury Secretary Paulson announced that he dismissed the chief executives of both companies and named replacements. “Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” said Secretary Paulson.

Plugged-In: Tech cracks — no place to hide - Barron’s
Columnist Mark Veverka’s this week echoes the sentiment of his fellow tech writer Eric Savitz, of Barron’s Technology Trader, that Technology is still cracking. The Philadelphia Semiconductor Index plunged to a 5�-year low on Thursday before rebounding to close the day slightly higher. Each of the 18 computer-chip companies in the index got whacked after a Citigroup analyst reported that executives were providing somber outlooks at the bank’s investment conference. Weaker-than-expected computer demand in Europe was largely to blame. Tech companies had been consistently saying that growth outside North America was offsetting domestic weakness, but foreign demand clearly is slowing. Tech-spending growth in Brazil, Russia, India and China, for example, has fallen to around 10% from 30% not long ago, he adds. On top of that, other tech companies are starting to come clean about softening demand. Witness the ecent grim tidings from Dell (DELL), Corning (GLW) and Ciena (CIEN). Cowen software analyst Peter Goldmacher contends that the bad news won’t stop there. In a preview of Oracle’s (ORCL) earnings announcement, he concurs that corporate spending for enterprise software is starting to slow. A stronger dollar, plus a weaker European economy, will prove to be an unfortunate combination for those global U.S. tech companies, such as Hewlett-Packard (HPQ) and IBM (IBM), that have been benefiting from currency-exchange rates. In addition to the higher dollar, Goldmacher adds, many of them will have to report against strong previous-year quarters. Cowen’s technology strategist Arnie Berman says that Q3 earnings estimates are attainable, while Q4 projections are probably too high and “consensus estimates for 2009 appear borderline ridiculous.” Berman says, tech stocks have yet to hit bottom. Berman thinks that tech stocks could hit the floor by October, followed by analysts lowering their estimates to reflect the tougher times.

Technology Trader: The Tech Sector’s suffering continues - Barron’s
Columnist Eric Savitz says the evidence continues to mount, such as sagging demand from both consumers and corporate IT departments, that the teach bear market is most certainly not over. And there’s no sign that we’re near the bottom. Judging by what we’ve learned in the past week alone, Savitz says the tech sector is guilty of over-promising and under-delivering. PC demand seems to be softening, chips stocks are at 5 year lows, with the Semiconductor HOLDR (SMH) dropping 355 since July 2007. Chip makers are cutting spending on silicon and customers aren’t buying new semi equipment. More evidence: NAND prices are collapsing, DRAM prices are doing the same. And, then there’s the disturbing case of Marvell Technology (MRVL), which sells chips to both disk-drive and cellphone makers, who cut revenue guidance for its FQ3. Conditions seem to be worsening rapidly in the flat-panel display sector; communications-equipment sales are softening; and the Internet stocks are being pressures as web-based add spending is declining. This “veil of gloom” that has descended across tech-land has left investors suffering. Bottom-line: As an answer to the question of what’s next? - Savitz says….”we wait” — for an indication that demand is picking up.

Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of September 5: Home Bancshares (HOMB), Sykes Enterprises (SYKE), Cornell Companies (CRN), Big Lots Inc (BIG), Stanley Inc. (SXE), Enpro Industries (NPO), Strayer Educationl (STRA), Herman Miller (MLHR), Psychiatric Solutions (PSYS), Express Scripts (ESRX), Healthspring Inc (HS), Charles Schwab (SCHW), Michael Baker Corp (BKR), Petmed Express (PETS), Fastenal (FAST), Symantec (SYMC), Dorchester Minerals (DMLP), Gorman-Rupp (GRC), Lufkin Industries (LUFK), CSG Systems (CSGS), QLogic Corp (QLGC), First Solar Inc (FSLR), Ansys (ANSS), NCI Building Systems (NCS), IPG Photonics Corp (IPGP), Brinks (BCO), TD Ameritrade Holdings (AMTD), Hudson City Bancorp (HCBK), CoStar Group (CSGP).

Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of September 5: Grahm Corp. (GHM), GMX Resources (GMXR), Bucyrus International (BUCY), Potash Corp Saskatchewan (POT), CF Industries Holdings (CF), Massey Energy (MEE), Industrial Services of America (IDSA), Arch Coal (ACI), Comfort Systems USA (FIX), Southwestern Energy (SWN), Hess Corp. (HES), Monolithic Power Systems (MPWR), Robbins & Myers (RBN), CSX Corp (CSX), Arena Resources (ARD), Enersys (ENS), Agrium (AGU), Oil States International (OIS), Chart Industries (GTLS), Helmerich & Payne (HP), Penn Virginia Corp. (PVA), Research in Motion (RIMM), Koppers Holdings (KOP), Valmont Industries (VMI), Netlogic Microsystems (NETL), Compass Minerals (CMP), Natural Gas Services Group (NGS), Unit corp (UNT), Tesco Corp (TESO).

Paulson says bailout was necessary-National Public Radio
Treasury Secretary, Hank Paulson said that the bailout of Fannie Mae (FNM) and Freddie Mac (FRE) had to happen since both entities are so intertwined in the U.S.’s financial system. “A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation. That is why we have taken these actions today,” Paulson said.

U.S. equity futures continue to point to a higher open
U.S. equity futures continue to point to a higher open after the government announced its takeover of Fannie Mae (FNM) and Freddie Mac (FRE). According to the plan, the Treasury will provide as much as $200B in the companies. The move has sparked rallies around the globe and in the U.S., with the S&P up almost 3.0% in pre market trading. The banking and housing sectors look to be up strongly as they are the main beneficiaries of the government’s moves.

Goldman Sachs third quarter earnings expected to slide-WSJ
Compared to its Wall Street brethren Goldman Sachs has continued to perform well. Not so for the third quarter whose results will be reported on September 16, reports the Wall Street Journal’s “Heard on the Street”. Analysts have been cutting the firm’s earnings estimates to $2.13 a share, or $953M, from $3.29 a share on August 15, according to Thomson Reuters. Still too high? Others see $1.50 a share. For last year’s third quarter Goldman earned $6.13 a share, or $2.85B.

Housing market to benefit from GSE bailout@MWRE
FTN Midwest said they remain bullish on the housing market and said the GSE bailout will be a positive for mortgage rate spreads. The firm reiterates their Buy ratings on RYL, DHI, CTX, TOL, PHM, and LEN.

Fate of the US Dollar and Potential Consequences
In overnight trading the US Dollar Index ($DXY) was trading down nearly a percent against its counter-parts. This morning that whole move down has reversed with the index now in the middle of its overnight/pre-market trading range at 79.17 as this is written. One potential consequence of the surprise move to takeover Fannie Mae (FNM) and Freddie Mac (FRE) may well be an end to the dollar’s recent rally. One reason for this would be the expectation that the US government in intervening will add substantially to the national debt. Such moves tend to reflect poorly on currencies. If we do see the dollar resume its downtrend, it might be a blessing. Although inflation might tick up, it would help the multi-nationals based in the US who must report currency-adjusted results for the current quarter. The dollar as we had noted in previous posts has been rising through all of calendar Q3. As a result Q3 earnings are likely to take a hit on the higher dollar (a move up in that time of nearly +10%, a rather huge one by currency trading standards). A lower dollar would also help out commodity producing countries such as Brazil, Australia and Canada which have all been hit very hard over the last four months. In that time Brazil as measure by the iShares MSCI Brazil Index (EWZ) has taken a (-40%) hit from its May highs. Keep an eye on dollar movements today as that may provide an opportunity away from US equity.

The Most Down are Most Up
A quick scan of the pre-market action is actually something of a surprise. For one, not that many issues in total are trading actively on the heels of the Fannie Mae (FNM)/Freddie Mac (FRE) bailout. When the news hit Sunday, the reaction overseas was broader and deeper than what we are seeing in the US. So far the positive action is largely confined to the financial names. Moreover, the names doing best this morning such as Washington Mutual (WM), trading up +24% as this is written, are those that have to date been most down. Other names in that “most down” group are Wachovia (WB) up +10.32%, Citigroup (C) up +9.96%, MGIC Investment (MTG) up +11.29%, and Bank of America (BAC) up +9.5%. All of those name with the exception of MTG are seeing extremely heavy pre-market volumes. The largest financials that have held up better in the crisis over the course of the summer such as JPM, MER and GS are positive (up +5% or better) but with far less volume and overall price gains than their “most down” counterparts. To some degree this does make fundamental sense as the group trading “most up” this morning have the heaviest mortgage exposure or exposure to Fannie/Freddie debt or preferred shares.

Canadian Superior-SNG announces succesfull drill at Intrepid block
Canadian Superior Energy Inc. announced, as Operator of the “Intrepid” Block 5(c), that it has successfully drilled the 26″ hole section of the well and has run and cemented in place the 20″ casing string to a depth of 3,030 feet subsea. The “Endeavour” well was spudded on August 28, 2008 and, as reported previously, the 36″ surface hole section was drilled successfully and the 30″ surface conductor casing was run and cemented in place. Following necessary drilling operations, including the installation of the marine riser and the blowout preventer, drilling will re-commence. The next section of the well to be drilled will reach just over 5,000 feet subsea.

Follow-up: RIMM upgraded to Outperform from Market Perform@MOKE
Morgan Keegan upgraded RIMM based on improved risk/reward ahead of new product launches following recent decline in shares.

Research in Motion-RIMM: Reiterate Buy ahead of earnings report on 9/25@BOFA
Banc of America expects RIMM to report EPS and sales above theirs and consensus estimates on better units and controlled opex. The firm thinks guidance could see upside and views the recent pullback as a buying opportunity.

Google-GOOG: View shares as attractive at current levels@WBLR
William Blair does not expect Chrome to impact Street estimates but feels the roll-out is an important step in the migration toward cloud computing and possibly eliminating the reliance on desktop operating systems. The firm maintains an Outperform rating on the stock.

Financials: GSE takeover likely to lift the prices of bank stocks@LTCO
Ladenburg believes the government takeover of Fannie Mae (FNM) and Freddie Mac (FRE) will likely destroy the value of those companies, but lift the prices of bank stocks in general by stabilizing values in the secondary mortgage markets. Ladenburg thinks Bank of America (BAC) is the largest beneficiary given its acquisition of Countrywide Financial, and that Citigroup (C), J.P. Morgan Chase (JPM), Wachovia (WB), Goldman Sachs (GS), and Morgan Stanley (MS) will also benefit.

Goldman Sachs-GS upgraded to Buy from Underperform@MLCO

(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.)

Fast Money position recap- First Moves- Jeff says to take off POT trade, Guy likes HD, Pete likes IMCL on a higher bid possibly, Karen likes IRF.
Macke Owns (MSFT), (WMT), (DIS), (ATVI); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL), (AAPL) Collar; Najarian Owns (RIMM) Call Spread; Najarian Owns (VMED) Puts; Najarian Owns (XLF), (XLF) Collar; Najarian Owns (ZMH) Calls; Najarian Owns (XLE) Call Spread; Najarian Owns (FTO) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Finerman Owns (GS); Finerman’s Firm Owns (MO), (MSFT), (NOK), (SUN), (TSO), (VLO); Finerman’s Firm Owns (AAPL) Calls; Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Owns (IRF) Calls; Finerman’s Firm Is Short (BBT), (COF), (IYR), (IJR), (MDY), (SPY), (IWM); Finerman’s Firm Is Short The British Pound.

HUGE market news this is what the market needed. I called this out last Thursday and they listened. Look for some big up days ahead with the financials, tech, homebuilders and retailers to lead. Hawking all of em and looking to buy on dips. No doubt about it, we were headed for a market crash. Pick plays with high probability of success, have focus and patience, run technicals through supply and demand. Great Luck and Happytrading!

Nature and markets are run on formulas…think fractally!

A rainbow graces skies above the Mombo region of Botswana’s Okavango Delta, home to the Moremi Game Reserve, elusive leopards, and lurking hyenas. Baobab trees such as this one can provide some relief from the sweltering heat.