Wang’s Happy Trading

Posted By Optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Wednesday, November 5th
WALL STREET JOURNAL: According to the Wall Street Journal’s “Heard on the Street,” Yahoo’s (YHOO) new plan to outsource just 25% of its search-advertising revenue to Google (GOOG) for two years will not give it the huge sales boost it needs and will have less incentive in improving its own search technology. The WSJ said that a deal with Time Warner’s (TWX) AOL could possibly sink the two properties together and, given economic weakness, a Yahoo recovery could be far away…FINANCIAL TIMES: The Financial Times reported that Carlyle Group, a private equity firm, told its investors this week that they should not expect to see substantial returns on their money in the near future…ECONOMIC TIMES: The Economic Times reported that Jaguar Land Rover, a unit of Tata Motors (TTM), announced plans to cut 400 more jobs by the end of January due to the current global economic downturn…THE HERALD: Royal Bank of Scotland’s (RBS) incoming CEO, Stephen Hester, is holding out hope the bank will ultimately prevail as an independent. The Herald reported that Hester believes it is “unlikely” the bank will be sold to a third party when the UK government’s stake is eventually unwound…

Asian Markets Wrap-Up for Wednesday, November 5
Stocks in Asian advanced as most markets gained on speculation that the new American president will take further steps to spur the economy…JAPAN: The Nikkei 225 Stock Average was up 406.64, or 4.5%, to 9,521.24, while the broader Topix index increased 56.21, or 6.2%, to 966.91. Honda (HMC) jumped 13% to Y2,745. Komatsu (KMTUY) increased 14% to Y1,312. Nintendo Co. (NTDOY) added 11% to Y36,300. Inpex surged 16% to Y674,000. Japan Petroleum increased by its daily limit of Y500 to 4,450. Mitsui & Co. (MITSY) was up 11% to Y1,025. Mizuho (MFG) jumped 16% to Y288,400. Mitsubishi UFJ Financial Group (MTU) leapt 11% to Y698. Sumitomo Heavy climbed 23% to Y376. Sanyo Electric Co. (SANYY) soared 18% to Y230…CHINA: The CSI 300 Index advanced 63.66, or 3.9%, to 1,691.42. Merchants Bank was up 9.6% to 12.71 yuan. Shenzhen Development Bank Co. added 6% to 8.85 yuan. China Construction Bank Corp. increased 3.5% to 4.09 yuan. Ping An Insurance (Group) Co. rose 6.4% to 25.30 yuan. Jiangxi Copper was up 5.4% to 8.93 yuan. Tongling Nonferrous Metals Group Co. climbed 4.3% to 6.08 yuan. Datong Coal Industry Co. added 3.3% to 11.70 yuan…AUSTRALIA: The S&P/ASX 200 Index advanced 121.50, or 2.9%, to 4,336.60. BHP Billiton (BHP) gained A$2.48, or 8.5%, to A$31.60. Rio Tinto Group (RTP) jumped A$6.89, or 8.6%, to A$86.60. Woodside Petroleum (WOPEY) added A$1.03, or 2.3%, to A$45. Santos (STOSY) was up 76 cents, or 5.4%, to A$14.89. Westfield Group, increased 72 cents, or 4.6%, to A$16.50. James Hardie Industries (JHX) rose 23 cents, or 4.6%, to A$5.22…AROUND ASIA: In Hong Kong, the Hang Seng Index advanced 455.82, or 3.17%, to 14,840.16.

The dollar: Sign of strength or weakness?-WSJ
Will the dollar’s comeback be stunted? It’s now 19% above its low in April but has fallen recently. With the markets making somewhat of a comeback will its need fade? asks the Wall Street Journal’s “Ahead of the Tape”. Some say the dollar is fairly valued; others say the government’s financial mess threatens it. But what are the alternatives?

U.S. equity futures continue to point to a lower open
U.S. equity futures continue to point to a lower open as the markets try to shake off its post-election hangover. As the excitement of the election starts to wane the reality of a weak economy will begin to take back center stage. The housing market and the financial industry are two of the bigger challenges facing the new administration, as well as an economy in recession. Global markets are also suffering, and with the U.S. looking to pull itself out of its doldrums, the eyes of the world will wait to see what promises the new president can deliver on.

Investments in Chinese banks look risky for now-WSJ
Goldman Sachs Group (GS) and Bank of America (BAC) hold significant stakes in Chinese banks Industrial & Commercial Bank of China and China Construction Bank, respectively. Both Chinese banks’ shares are significantly down. But, according to the Wall Street Journal’s “Heard on the Street”, in the long run they should prove to be solid investments. For now though, the size of the investments, $7.14B for Goldman and its affiliates as of August, and $14.5B for Bank of America as of September, are tough to swallow.

Markets a winner on election day-WSJ
No matter what the election results the U.S. economy is still in the tank. Yesterday’s market rally crossed most lines. But the government’s deficits will continue to grow, points out the Wall Street Journal’s “Heard on the Street”. A key measure to watch: The CBOE volatility index, known as the VIX, dropped 11%. Relief? Maybe, but at at 47.7, it remains more than double the 10-year average.

Analysts Upgrade Summary for Wednesday, November 5th
MOST NOTEWORTHY: Thor Industries (THO), Spss (SPSS) and Entergy (ETR) were today’s noteworthy upgrades: Baird expects Thor Industries to benefit from industry consolidation and the eventual recovery. Shares were upgraded to Neutral from Underperform. Jefferies upgraded Spss to Buy from Hold on valuation and believes the company’s cost cuts will be positive for EPS. The company’s target was lowered to $28 from $29. Banc of America upgraded shares of Entergy to Buy from Neutral on valuation and believes the company is unlikely to spin-off Enexus by year-end. They believe a spin-off in 2009 or no spin at all suggests a higher share price from current levels. The company’s target was raised to $104 from $101.50…OTHER UPGRADES: AMN Healthcare (AMN) was upgraded to hold from Sell at Citigroup. Argus upgraded Choice Hotels (CHH) to Hold from Sell. Transdigm Group (TDG) was lifted to Buy from Neutral at UBS.

Analysts Downgrade Summary for Wednesday, November 5th
MOST NOTEWORTHY: Emcore (EMKR), Dean Foods (DF) and Replidyne (RDYN) were today’s noteworthy downgrades: Merriman downgraded shares of Emcore to Neutral from Buy on expectations reduced spending on network infrastructure and analog/cable components over the next two quarters could keep shares range bound. The firm believes Street estimates for the company’s fiber optics business unit are too aggressive. Stephens cut Dean Foods to Equal Weight from Overweight following the company’s Q3 earnings miss and lowered their target to $20 from $26. Argus downgraded Replidyne to Hold from Buy following the company’s agreement to be acquired by Cardiovascular Systems…OTHER DOWNGRADES: Blue Nile (NILE) and Fossil (FOSL) were downgraded to Underweight from Neutral at JP Morgan. Citigroup cut Health Net (HNT) to Sell from Hold. iPCS inc (IPCS) was lowered to Hold from Buy at Jefferies.

Analysts Initiation Summary for Wednesday, November 5th
MOST NOTEWORTHY: Nestle (NSRGY), Knight Transportation (KNX) and Cytec Industries (CYT) were today’s noteworthy initiations: Jefferies expects Nestle to navigate the consumer slowdown through its “dominant brands” and easing input costs. Shares were initiated with a Buy rating. KeyBanc initiated Knight Transportation with a Buy rating and $19 target. The firm is positive on the regional truckload market, Knight’s strong financial position, and above average growth, among other reasons. Cytec Industries was assumed with a Hold rating and $34 target at Citigroup. The firm prefers to stay on the sidelines given the near-term headwinds in the aerospace space…OTHER INITIATIONS: HSN Inc (HSNI) was started at JP Morgan with an Underweight rating and $6 target. Credit Suisse assumed Equitable Resources (EQT) with an Outperform rating. Brink’s Home Security (CFL) was initiated with an Overweight rating at Morgan Stanley.

Standard and Poor’s Depository Receipts-SPY: Pivot Points
The following are the pivot points for SPY. Pivot High: $102.753, Pivot Low: $98.607. 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.

Amazon.com-AMZN Q4 margins are at risk, says Piper Jaffray
Piper sees “significant risk” to Amazon’s margins and earnings in the December quarter given the decelerating e-commerce environment and the company’s ramp-up to the holiday season. Shares remain Neutral rated.

S&P 500-SPX: Pivot Points
The following are the pivot points for the SPX. Pivot High: 1024.730, Pivot Low: 988.530. 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.

Dow Jones Industrials Index-DJX: Pivot Points
The following are the pivot points for the DJX. Pivot High: 9804.645, Pivot Low: 9474.585. 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.

SunPower-SPWR volatility Elevated into impact of foreign exchange
SPWRA is recently down $5.85 to $44.65 in pre-open trading. SPWRA announced substantial appreciation of the U.S. dollar relative to the Euro during the quarter would impact Q4 and 2009 results. Thomas Weisel has a $50.50 price target on SPWRA. SPWR over all option implied volatility of 100 is above its 26-week average of 75 according to Track Data, suggesting larger price movement.

SPWRA downgraded to Neutral from Outperform at Credit Suisse
Credit Suisse downgraded SPWR citing valuation and the negative pre-announcement. Target to $47 from $85.

Research in Motion-RIMM checks show strong initial Bold demand, says Citigroup
Citigroup’s checks at AT&T (T) stores show strong initial demand of the Blackberry Bold, but the firm thinks sales thus far have been pent-up demand due to launch delays and replacements rather than new subscriptions. Citigroup believes the launch is a positive for RIMM but remains concerned with Orange’s apparent withdrawal of Bold in Europe and continues to feel Storm is critical for November quarter results. Shares remain Hold rated.

Apple-AAPL checks show iPhone prodction softness, says UBS
UBS’s checks and recent data points indicate unit volumes are weaker than their current estimate of 5M. The firm has made no changes to estimates and notes that it is still early in the quarter. Shares are Neutral rated

Agrium-AGU reports Q3 EPS $2.31 vs. consensus of $1.89
Reports Q3 revenue $3.1B vs. consensus of $2.24B
Agrium’s-AGU CEO believes commodity prices hit with disregard for fundamentals

Jim Cramer’s “Mad Money”
Cramer said Tuesday’s market action was so bullish, “it’s time to sell”. After rallying hard from last month’s lows, the market is so over-bought that it’s time to ring the register and take some profits. Although the possibility of another Great Depression is off the table, the possibility of a severe recession still exists, and it won’t be long before investors return to a fearful stance, he said. Cramer advised taking profits and trimming positions in the areas he’s been touting such as high-yielding dividend stocks, recession resistant names, and companies that were trading at or near their cash values. He said investors will need cash to take advantage of the next round of selling. Next, Cramer said when it comes to office supplies, he’s choosing Staples (SPLS) over its smaller rivals Office Depot (ODP) and OfficeMax (OMX). Cramer said Office Depot and OfficeMAx are not cheap. Cramer said you want the “best of breed”, Staples, which he called the only investable option, with the greatest ability to expand. Then, Cramer that the time is right to buy Caterpillar (CAT), despite lower earnings estimates and a stock price that’s been cut in half. With a 4% dividend yield, Cramer said he’s a buyer. Cramer also called Caterpillar an excellent play on an Obama presidency. OUTRAGE OF THE DAY: Cramer took aim at the U.S. Treasury Department, who earlier today leaked that CIT Group (CIT) may be next on the short list of firms to receive federal bailout money. Cramer said CIT was grossly undeserving of the government’s assistance. LIGHTNING ROUND: (Bullish) GVA; CSCO; JPM; BMY; MS. (Bearish) ALU; ATHN.

Fast Money position recap- Macke Owns (BNI), (MSFT), (CY), (UUP); Macke Is Short (TM); Adami Owns (AGU), (BTU), (C), (GS), (MSFT), (INTC), (NUE); Pete Najarian Owns (MSFT) And Is Short (MSFT) Calls; Pete Najarian Owns (SBUX) Puts; Pete Najaria Owns (YHOO) And Is Short (YHOO) Calls; Seymour Owns (AAPL), (BAC), (MER), (SBUX), (BAC), (EEM); Seygem Asset Management Owns (EEV)

New president, new America, new market. See you in the trading room where I talk all day about the market.