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Premarket Analysis for 8/20 - Upgrades/Downgrades, Gappers, Actionable Calls

August 20, 2008 – 5:15 am

Posted By optiondragon for myhappytrading.com, the ultimate site made by traders for traders!

From Briefing.com

Periodicals Wrap-Up for Wednesday, August 20
WALL STREET JOURNAL: A venture led by residential land company LandCap Partners is buying $40M of land and construction loans from Wachovia (WB). FINANCIAL TIMES: Barclays (BCS) would consider buying a U.S. wealth management company, Barclays President Bob Diamond said. However, it is “highly unlikely” that the British bank will bid for a U.S. investment bank, Diamond added. WALL STREET JOURNAL: eBay (EBAY) said it would reduce its fees for products on its web site with fixed prices. The online auction company is making the move in order to become more competitive with rival web sites. BLOOMBERG: Fannie Mae (FNM) and Freddie Mac’s (FRE) ability to repay a combined $223B of their bonds due by the end of Q3 may determine whether they will need to be bailed out by the federal government.

Q3 debt payments may determine Fannie and Freddie’s fate-Bloomberg
Fannie Mae (FNM) and Freddie Mac’s (FRE) ability to repay $223B of their bonds due by the end of Q3 could determine whether the companies will need to be bailed out by the U.S. government. Fannie has about $120B of debt maturing this quarter, and Freddie has $103B of debt maturing in the same period.

Asian Markets Wrap-Up for Wednesday, August 20
Asian stocks advanced as most markets gained. The Chinese government is said to be considering moves to jump-start growth for its economy..JAPAN: The Nikkei 225 Stock Average fell 13.36, or 0.1%, to 12,851.69, while the broader Topix index lost 2.17, or 0.2%, to 1,233.37. Shipping lines lead the losers as Nippon Yusen, dropped 2.7% to Y852. Mitsui O.S.K. Lines slid 2.5% to Y1,262. Sony (SNE) tumbled 2.8% to Y4,130. Matsushita Electric Industrial Co. (MC) sank 2.4% to Y2,255. Toyota (TM) was down 3.6% to Y4,830. Inpex was up 2.5% to Y1,134,000. Sumitomo Metal Mining Co. jumped 4.3% to Y1,426…CHINA: The Chinese government may spend up to 400B yuan, or about $58B, to help stimulate the economy and may ease monetary policy this year, according to a research note from J.P. Morgan. The CSI 300 Index advanced 184.47, or 7.9%, to 2,532.94. China Vanke Co. rose 8.4% to 7.46 yuan. Gemdale Corp. jumped 8.2% to 7.40 yuan. Ping An Insurance Co. was up 9.5% to 44.96 yuan…AUSTRALIA: The S&P/ASX 200 Index advanced 63.10, or 1.30%, to 4,929.50. BHP Billiton (BHP) added 4.7% to A$38.73. Rio Tinto Group (RTP) climbed 4.8% to A$116.70. James Hardie (JHX) lost 1.6% to A$4.43…AROUND ASIA: The Hang Seng Index gained 446.89, or 2.18%, to 20,931.26. Cnooc (CEO) added 5.4% to HK$10.64. PetroChina Co.(PTR) increased 3% to HK$9.89.

Lehman came close to raising $5B from South Korean funds, institutions-NY Post
Lehman Brothers (LEH) CEO Dick Fuld almost made a deal to raise almost $5B from South Korean wealth funds and institutions, but the deal fell through earlier this month, inside sources said.

Treasury’s next move: Doing something about high mortgage rates-WSJ
The Wall Street Journal’s “Heard on the Street” says that with everything that has been done to help the housing market, the rate on a 30 year mortgage now is 6.52%, unchanged from a year ago. If cheaper borrowing costs are key to the housing turnaround mortgage rates with have to go lower. Enter Fannie Mae (FNM) and Freddie Mac (FRE): If the government pumps large sums of money into them, or takes them over, that could ease the pressure. Risks abound but investors also want to know that the burden will not fall on them alone.

Goldman reiterates year end WTI crude forecast of $149 a barrel-CNBC
Oil fundamentals, not USD to drive oil prices@GSCO
Goldman said they expect declining trend oil supply growth and emerging market demand to drive rising oil prices. The firm reiterated their year end WTI oil price forecast of $149/bbl.

U.S. equity futures continue to point to a higher open
U.S. equity futures continue to point to a slightly higher open this morning as crude oil prices start to move higher. Goldman Sachs (GS) earlier today reiterated their year end price target for crude at $149 a barrel; the price is now above $116. That could change after the release of today’s Department of Energy Inventory report at 10:35 am. Analysts are predicting a build-up of 1.0M barrels of crude and a draw-down of 3.0M barrels of gasoline. Any major variation from those numbers could cause volatile price swings in both commodities.

U.S. cellphone sales fall 13%-WSJ
Second quarter sales of cellphones in the U.S. were down 13% as about 28M were sold when compared to the same quarter in 2007, according to NPD Group, a research firm, the lowest quarterly total since they began tracking in 2005. The phones that were sold generally were more expensive, meaning the total value of the market was off 2% to $2.4B, reports the Wall Street Journal. Motorola (MOT) products were the most popular.

Intel focuses on performance over power usage-WSJ
Intel Corp. (INTC) is focused on boosting computing performance without using more power, and it has a new “turbo” technology on future chips which basically speeds up chips that may have four or more, reports the Wall Street Journal.

Intel-INTC: Concerned investors will price in a weaker 1H09@GSCO
Goldman said they expect INTC to report strong a strong Q3 and Q4 guidance but have concerns investors will begin to price in a weaker 1H09 given impact from higher capex.

Hewlett-Packard-HPQ estimates raised on the healthy quarter@PACS
PacCrest says PC end-demand remained healthy for HPQ, the world’s largest IT supplier. They view that as a positive for DELL (DELL) as well, and would be a buyer of the shares ahead of its quarter results. The shares of HPQ remain Sector Perform rated with a fair value of $41 to $48.

F5 Networks-FFIV: Continue to be bullish on L-T prospects; target $41@THNK
In view of new product cycles and market leadership, as well as the secular drivers surrounding the rapid increase of web applications, server consolidation and virtualization, ThinkPanmure thinks guidance appears conservative. The firm maintained their estimates and reiterated their Buy rating.

Myriad Genetics-MYGN target raised to $87 from $75@JMPS
After Myriad reported higher than expected EPS for its Q4, JMP Securities believes Myriad’s PM business is continuing to grow strongly. The firm expects the company’s PM business to become profitable and they reiterated their Outperform rating.

Brokers: Estimates lowered for GS, LEH, and MS@BERN
Bernstein lowered Q3 EPS estimates for GS and MS and Q3, Q4, and 2009 EPS estimates for LEH. The firm expects LEH to report Q3 writedowns of $3B.

Amylin Pharma-AMLN: Believe takeover is unlikely, maintain Sell@SBSH
Citigroup believes Lilly’s (LLY) advance of its own once weekly GLP-1 analog, LY2189265, makes AMLN a less appealing M&A target since the drug is a viable competitor to LAR. The firm maintains a Sell rating and $21 target.

Eli Lilly-LLY: See downside risk to Byetta/LAR estimates@SBSH
Citigroup sees downside risk due flattening prescription trends, safety concerns and rising competition. The firm maintains a Hold rating on the stock.

Amgen-AMGN coverage assumed with an Outperform@LEER
Leerink expects AMGN’s denosumab fracture data to be presented at ASBMR to be superior to expectations and that denosumab will be a major earnings driver starting in 2010.

Brokers: Estimates reduced on higher write-downs on mortgage assets@GSCO
Goldman lowered estimates for LEH, MS, MER, JPM and C citing higher write-downs for mortgage assets. The firm expects LEH’s Q3 write-down to be in the range of $2.5B-$3.5B and still sees any recovery in the group a few quarters away. They continue to recommend being long MS vs. short C.

Semis: Channel checks positive for iPhone chip suppliers@FBRC
Friedman Billings’ checks indicated iPhone calendar Q3 build volumes increased by 5% versus their prior checks and Q4 build volumes increased by 2%. The firm views these data points as positive for iPhone chip suppliers BRCM, MRVL, LLTC, NSM, IFX, SWKS.

Suntech Power-STP reports Q2 EPS 41c vs. consensus of 32c
STP reports Q2 revenue $480.2M vs. consensus of $439.33M.
Suntech Power-STP says PV cell production capacity was 660MW at end of Q2
STP says on track to reach 1GW PV cell capacity by end of 2008
STP raises 2008 sales guidance to $2.05B-$2.15B
Previous guidance was $1.9B-$2.1B and consensus estimate is $2.06B.
STP increases full year PV product shipment target
Suntech increases full year 2008 PV product shipment target from 530MW to approximately 550MW.

(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 sell COST, Guy likes RTN long, Pete likes MER puts.
Adami Owns (C), (AGU), (BTU), (GS), (INTC), (MSFT), (NUE); Macke Is Short (TM); Macke Owns (MSFT), (WMT), (DIS), (CY); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (CSCO) Call Spread; Finerman Owns (GS); Finerman’s Firm And Finerman Own (C) Leap; Finerman’s Firm Owns (MSFT), (SUN), (TSO), (VLO); Finerman’s Firm Is Short (SPG), (COF), (IYR), (IWM), (IJR), (SPY), (MDY), (BBT).

Goldman came out with a note today saying oil prices are not dollar drive and maintain $150 oil by the end of the year. Market on shaky ground here with the financials and are now taking a cue from FNM. The market is moving in lock step to XLF and the brokers. Oil inventories will have an effect on the market and oil prices released at 7:30 am PT. Energy could find a boost here with Goldman’s call and favorable oil inventories. Brokers were downgraded and estimates were slashed by Bernstein and Goldman. The XLF, brokers and FNM
should be under pressure throughout the day, let’s see if that occurs. Pick plays with a high probability of success, have focus and patience and run technicals through supply and demand. Great luck and Happytrading!

Think Fractally, patterns are present in the market and in nature, both are run by formulas. Question is, what is the formula?

A fisheye lens captures arcs of light crowning the Canadian wilderness. Water refracts, or bends, the light, separating it into red, orange, yellow, green, blue, and violet.

By optiondragon | Posted in Uncategorized | Comments (0)

Commodities Bounce; Financials Still Weak: SPX, Nasdaq, MEE, CNX, BTU, RIG, SLB, NOV, AEM, HPQ

August 19, 2008 – 5:59 pm

from My Happy Trading.com

Financials and techs were weak for the 2nd straight day. On the other hand, commodity-related sectors bounced. Metals and mining groups were strong. Coals showed a lot of strength: MEE +7.58%; CNX +6.53%; BTU +7.64%. Oil services also recorded solid gains: RIG +2.46%; SLB +3.93%; NOV +4.37%. Crude oil closed above $115/barrel. Gold also went higher, above $815/ounce. AEM, a gold miner, jumped almost +5% today.

After the market, HPQ reported good earnings and gave a solid guidance going forward. HPQ shares traded higher by +2.88% in AH trading. PAY also provided a strong outlook and sent its stock soaring up more than $5, or +34%!! PAY shares have slumped from $50 late last year to today’s close of $14.73. It is trading nearly $20 in after-hours.

The Dow was down 130.84 points; SPX lost 11.91 points; Nasdaq fell 32.62 points:

SOX (semiconductors) dropped 2.26%. XLF (financials) was down 2.92%, while HGX (housing) slipped 3.5%. Commodities were strong: USO (oil) +1.62%; UNG (natural gas) +1.97%; GLD (gold) +2.07%; XME (metals and mining) +2.51%; OIH (oil services) +3.36%; XLE (energy) +3.59%. FXI (Chinese ADRs) slid 1.42%. Foreign currencies also bounced.

SPX

SPX lost 11.91 points to close at 1266.69. It closed just above its 30-day MA. The MACD was lower.

Nasdaq

Nasdaq fell 32.62 points to close at 2384.36. It closed below its 10-day MA. The MACD dropped.

The market is in a dangerous place right now. SPX is testing its 30-day MA. The financials continue to look weak, with XLF closing below $20. GS has fallen from above $180 to now below $160 in a little more than a week. $160 was the support level that GS has held since March. Commodity-related sectors are bouncing and starting to establish bottoms. The market’s recovery is in jeopardy. Any further push can send SPX back to 1240. Money could be looking to swing back to commodities again. However, the major market indices are still showing bullish formations in their daily charts. Asian markets have also been weak, especialy the Hong Kong Market (HSI, Hang Seng Index), which is now at a new year low. So, be very careful.

Good night and HappyTrading! ™

By HappyTrading | Posted in Nasdaq, SPX, HPQ, NOV, RIG, SLB, AEM, BTU, CNX, MEE | Comments (0)

The 52 Week Highs/Lows Revisited With A Graphic Depiction (SPY, QQQQ, DIA)

August 19, 2008 – 10:30 am

Written By Optiondragon and Bluetick

Many investors know about the internals of the market. It is data metric that many traders watch and read about but for some particular reason, it is not very often you see a chart where they are overlayed on its respective index. I think this is a real shame because they are able to convey a lot of information in a very intuitive manner.

On the chart below I overlayed the NYSE New 52 Weeks Lows in green and the New 52 Week Highs in blue. Looking at the green dots, you will notice how the peaks match very well with important moves of the SPX. Most of the time the green and blue curves are fairly subdued, but each important bottom of the SPY are matched with corresponding numbers on the New 52 Week Lows. You can also notice the divergences between the blue and green clustered dots over time. The most notable divergence is occuring right now with the market trailing up the past month but the internals show more new sustained 52 week lows over 52 week highs, clearly showing a sickly internal bearish divergence.

A strong point of this indicator is the abrupt way the upward spikes in the New Lows end yet the moves toward the 52 week peaks are progressive. The spikes and drops stand very clear on the chart. The larger spikes in the 52 Week Lows correspond to short term bottoms.

This indicator is not normalized, meaning it doesn’t oscillate in a set range of values (+/-1, +/-100….); This has advantages and disadvantages. It doesn’t saturate like the stochastics banging its nose against the ceiling; on the other hand like the VIX you never know in advance how high it will go. But as an early indicator and a confirmation of temporary tops and bottoms, it can give some clues. Notice it will always be limited on the upside by the number of stocks listed on the exchange. It seems it will be a long time (maybe a year) before the 52 week highs will consistantly overtake the 52 week lows on a sustained basis.

Dr. Steenbarger is an ardent promoter of analyzing the internals, and uses them in a compounded form: the difference between the highs and the lows. This gives similar results but since it is compounded you lose some information too. I didn’t talk about the blue dots (highs) as much. It is clear that their performance is abysmal, this gives confirmation and some clues on the health of the markets so far this year.

Now the 2007 chart:

Compare 2008 to 2007. Here the blue (Highs) points dominate the picture. But you can also see an exhaustion moves and divergences: the blue clouds are each time less strong, shorter. Let’s look at the Mar-Aug rally. Started mid-April, the new highs of the SPX are not matched by corresponding increases in the new 52-week highs. Compare the blue peak in mid-July to the blue peak in mid-April, the level is diverging when the SPX is 80 higher. This divergence is a sign that the rally was on shaky ground. Fewer and fewer stocks are driving the market up. A recipe for disaster but also a good opportunity for day trading in selected stocks due to volatility. Same story in October-November.

As you can see when the blue dot line and cluster goes under the green line, the move is sharp and the transition was very brutal. That is what we want from an indicator, confirmation and possible leading indicator due to the green/blue transition.

This graphic depiction of internal indicators can help you understand the Big Picture through confirmation and analysis. The charts I presented here show two completely different trading environments. In 2007, it was possible to go long for some length of time in the indexes. This year seems to be the year of the day trader or short term trader.

I hope this article will make you appreciate the Internals more and please look to my updated posts on this index graph as well as other market indexes and sectors which I plan to include in the future!!

Subscribe for free to myhappytrading.com or wangshappytrading.com to get these updates.

By optiondragon | Posted in Uncategorized | Comments (0)

Premarket Analysis for 8/19 - Upgrades/Downgrades, Gappers, Actionable Calls

August 19, 2008 – 5:20 am

Posted By Optiondragon for myhappytrading, a website made by traders for traders.

From Briefing.com

Periodicals Wrap-Up for Tuesday, August 19
FINANCIAL TIMES: Lehman Brothers (LEH) is holding talks about selling all or part of Neuberger Berman, its asset management unit, sources said. The division is believed to be worth up to $10B. WALL STREET JOURNAL: General Dynamics (GD) has agreed to buy Jet Aviation for about $2.25B in cash. NEW YORK POST: Bill Ackman is not pleased with CVS Caremark’s (CVS) $71.50 per share bid for Longs Drug Stores (LDG), the Post reports. Ackman has hired Blackstone Group (BX) in an attempt to coax a higher bid from CVS, inside sources say. WALL STREET JOURNAL: Chrysler has sued Johnson Controls (JCI) for allegedly inflating the price of its batteries. The $15M lawsuit contends that Johnson Controls charged Chrysler for more lead than the batteries actually contained.

CME Group to buy the New York Mercantile Exchange for $8.4B-The Chicago Tribune
The CME Group (CME) recieved approval to buy the New York Mercantile Exchange for $8.4B, thus creating the world’s largest derivatives market. The Chicago Tribune reports, over 75% of Nymex members voted for the merger, ensuring that the deal supported by shareholders at both companies will go forward

A major U.S. bank could fail soon, former IMF official warns-UK Times
A large U.S. bank may fail within the next several months, according to Professor Kenneth Rogoff, a former International Monetary Fund chief economist. The credit crisis will get worse before it gets better, Rogoff added.

Russia to pull out of Georgia’s city of Gori from just after 1100 GMT-Reuters

EA, Take-Two may be trying to make a deal-NY Post
Electronic Arts (ERTS) is hoping that its announcement that it will not continue trying to buy Take-Two Interactive (TTWO) will lower Take-Two’s share price, making Electronic Arts’ $25.74 per share bid look attractive to Take-Two investors, sources say. Meanwhile, Take-Two hopes its offer to allow Electronic Arts to conduct more due diligence will result in a higher bid from Electronic Arts, the sources add. On the other hand, a source with ties to Electronic Arts said the company does not want to negotiate with Take Two’s current management team.

Lehman’s moves: Bold or weakness?-WSJ
The thought of Lehman Brothers Holdings (LEH) selling a part of Neuberger Berman was recently viewed by outsiders as unnecessary. Not now. The firm is also said to more intensely be looking to move parts of its asset management business and of its commercial mortgage-related assets.The Wall Street Journal’s “Heard on the Street” doesn’t think all this will result in a happy ending. Are these moves intended to shore up the balance sheet? Or are they hunkering down for third quarter results which aren’t expected to be pretty? An overriding concern is that Lehman will be seen as desperately wanted to sell parts of itself, and that may keep buyers pressing for bargain prices.

U.S. equity futures now point to a lower open
Equity futures are pointing to a much lower open. There was news on inflation on the wholesale level, and home construction. The producer price index showed an increase of 1.2% for the month of July versus an expected increase of 0.6%. That brings the annualized rate to 9.8%. The housing starts came in at 965,000 versus an expected 960,000, and the building permits came in at 937,000 versus the expected 970,000. The futures dropped immediately after the numbers were released and are now pointing to a much lower open.

Musharraf is gone and Pakistani stocks surge-WSJ
Pakistan’s President Pervez Musharraf resigned and the country’s benchmark KSE-100 index jumped 4.5% to 10719.62, and its rupees moved up against the dollar, reports the Wall Street Journal. Analysts, however, say the poor economy will likely limit market gains.

Bristol-Myers-BMY: Think IMCL deal will close nearer to ~$70/share than $60@LEER
While LEER believes a BMY/IMCL deal will happen, especially since BMY has a reported 17% ownership of IMCL stock, they do not think it will close before year-end 2008 at ~$70/share. LEER raised their 2008-2012 EPS estimates given the strong growth in Nutritionals and solid international growth prospects in the L-T. Market Perform rating.

First Solar-FSLR: View Ohio expansion as favorable, reiterate Buy@AMTR
Am Tech believes the expansion in Ohio is a signal of FSLR’s view on end market demand. The firm reiterates a Buy rating and $450 target.

Amylin Pharma-AMLN: No change in Outperform rating@BARD
Baird said the six cases of severe pancreatitis were available to the FDA by the 6/8 pre-NDA meeting for LAR and that AMLN commented on 5/1 in an NEJM article that cases with fatal outcome involving pancreatitis have been reported at a similar rates expected in the general population. The firm believes this supports a rebound in shares. AMLN is Outperform rated.

Gilead Sciences-GILD: U.S. HIV prescription trends are negative for Gilead@BERN
Bernstein’s prescription checks indicate that Gilead’s U.S. HIV RTI share gains have not accelerated, while market growth has not increased and the company’s compound volume growth seems to be slowing. The firm expects the slowing growth to continue and they maintained their Market Perform rating.

Softlines: Expect guidance will not be raised when 2Q EPS are reported@FBRC
FBRC anticipates EPS will be in-line or exceed estimates when ARO, ANN, BEBE, GPS and GYMB report their earnings this week, while HOTT and PSUN earnings may be reported at the higher end of guidance. FBRC also anticipates ARO, ANN, GPS, GYMB and HOTT to reiterate their guidance while it is expected BEBE and PSUN will reduce guidance.

WellCare Health-WCG: Small fine bodes well for company@OPCO
After WellCare agreed to pay a $35M fine to the U.S. government due to its failure to meet MLR requirements associated with its Florida contract, Oppenheimer believes the relatively small fine indicates that the company will not be crippled or put out of business. The firm maintained their Outperform rating.

Follow-up: Sun Healthcare-SUNH initiated with an Outperform@LEER
Leerink believes expansion of post-acute care rehabilitation services offers growth and margin improvement opportunities and has a $20-$21 12-month valuation range on the stock.

Coal: China Power Tariff increase just announce@LYON
Calyon said China’s National Development and Reform Commission announced an increase in China power tariffs. THe firm expects the tariff to lead to greater demand for coal in China and tighten an already tight global coal market. The firm reiterates Buy ratings on ACI, BTU, and FCL.

Apple-AAPL: See potential upside to estimates from share browser gains@PACS
PacCrest believes AAPL’s browser share is up 100% in August to .31 % following the launch of its 3G iPhone. PacCrest says share gains correlate to unit gains, where they think AAPL could post upside to their 3.5M unit estimate for Q3. The shares remain Outperform rated.

Suntech Power-STP: Expect Q2 to be aboev Street estimates@COWN
Cowen expects STP to report Q2 results above the Street by 10% or more given higher MW shipments and ASP and may raise 2008 guidance. The firm rates shares Outperform.

Google’s Android gets FCC approval and potential release date-Engadget
The FCC has approved Google’s (GOOG) Android phone and is expected to be released in September or October. The handset is to called “Dream” with a model of “DREA100″.

Rigel Pharma-RIGL is in late-stage partnership negotiations@OPCO
Oppenheimer believes that Rigel is in late-stage negotiations about partnering on its R788 treatment with several companies. The firm expects Rigel to achieve favorable terms on the deal.

Macau Gaming: China may enact further visa limits to Macau@LEHM
According to Lusa News Agency reports, the Chinese government may restrict visas to Macau in order to reduce visits from Mainland China to once every six months from once every two months. Lehman said the government wants to moderate visitation growth and gaming revenues, which could impact estimates.

Oil Services & Equipment: Recommend increasing exposure to the group@BOFA
Banc of America finds the group’s risk/reward favorable. Their top picks are Halliburton (HAL) and National Oilwell Varco (NOV).

Caterpillar-CAT: Channel checks suggest China is on plan@SBSH
Citigroup’s checks suggest that CAT’s largest dealer in China is still on plan for August despite the slowdown in that country. The firm remains comfortable with their above consensus estimates and maintains a Buy rating.

Forest Oil-FST: Reiterate Buy following Buffalo Wallow acquisition@BOFA
Banc of America believes the deal will add to FST’s proven reserves. :

Apple-AAPL: See two potential catalysts for second half of 2008@PIPR
Piper believes AAPL’s back-to-School promotion running through 9/15 and a likely special event in early September to announce new iPods and redesigned Mac portables could provide positive catalysts for the stock. The firm reiterates a Buy rating on AAPL shares.

Broker estimates lowered given the challenging market environment@WBLR
William Blair lowered Goldman Sachs’ (GS) Q3 estimate to $2.80 from $5.00 and FY09 estimate to $18 from $20 to reflect the challenging market environment over the past few months. The firm also lowered Morgan Stanley’s (MS) Q3 estimate to 86c from $1.27 and FY09 estimate to $5.25 from $6.10.

Amylin Pharma-AMLN: Believe Street overreacted to pancreatitis update@PIPR
Piper points out AMLN maintains that the rate of pancreatitis, the rate of necrotizing pancreatitis and the rate of mortality associated with pancreatitis in Byetta-treated patients is less than the rate seen for Type 2 diabetics, suggesting that Byetta is not increasing pancreatitis or worsening outcomes with pancreatitis. Piper continues to believe exenatide once weekly (QW) will be approved without significant delays related to pancreatitis.

MA coverage transferred with a Buy from Neutral@GSCO
Target to $275 from $300.

Myriad Genetics-MYGN will review and consider strategic alternatives
In determining the future course for Myriad, management will do a comprehensive review and consider a variety of strategic alternatives, including but not limited to a possible corporate restructuring which would separate the molecular diagnostic business from the pharmaceutical business as independent operating entities. To assist the Board in considering and evaluating these alternatives, the Company has engaged the investment banking firm of JP Morgan. JP Morgan and the Company’s management will be reporting their analyses to the Board of Directors at the fall Board meetings and, of course, the Board will be responsible for determining the most appropriate strategy to move the Company forward in this new era of profitability.

Memc Electronic Mat-WFR initiated with a Buy, target $70@LYON

Fast money position recap: Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (CSCO) Call Spread, (SNDK) Call Spread, (ZMH) Call Spread; Macke Owns (MSFT), (UUP), (WMT), (COST), (DIS), (ATVID); Finerman Owns (GS); Finerman’s Firm And Finerman Own (GLNG); Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Owns (MSFT), (SUN), (TSO), (VLO), (VCLK); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY), (BBT), (COF).

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Thank you for your understanding.

Think Fractally, formulas are hidden in the market and nature.

By optiondragon | Posted in Uncategorized | Comments (0)

Market Falls On Financials: SPX, Nasdaq, FNM, FRE, WM, MER, UB, FMCN

August 18, 2008 – 9:31 pm

from My Happy Trading.com

The market was under pressure right from the beginning as a Barron’s article this weekend renewed concerns over FNM and FRE. Both FNM and FRE tumbled more than 20% today! Here are some other losers in the sector: LEH fell more than 7%; MER lost 5.9%; WM dropped 7.47%. The pressure from the financials was heavy on the market. Gold managed a small bounce, but, is once again going lower this evening. Agriculture sector saw some scattered strength.

Among the financials, however, there was one shinning star today. Japan’s largest bank, Mitsubishi UFJ Financial Group, raised it bid for UB to $3.5 billion! UB jumped +11.74% today. FMCN raised its outlook for 3Q and saw its shares fly up +8.76%.

The Dow was down 180.51 points; SPX lost 19.60 points; Nasdaq fell 35.54 points:

VIX jumped more than +7%, but, closed below 21. Techs were weak as BTK (biotechs), SOX (semiconductors), INX2 (Internet), and SWH (software) all closed lower. USO (oil) and UNG (natural gas) continued to fall. XLE (energy) lost 1.27% while OIH (oil services) fell 1.66%. DBA (agricultural commodities) gained +5.26%. MOO (agriculture) managed to add +1.63%. FXI (Chinese ADRs) slipped another 2.44%.

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By HappyTrading | Posted in Uncategorized | Comments (0)

Premarket Analysis for 8/17 Upgrades/Downgrades, Gappers, Actionable Calls

August 18, 2008 – 5:21 am

Posted by Optiondragon for myhappytrading, a social network made by traders for traders.

From Briefing.com

Periodicals Wrap-Up for Monday, August 18
WALL STREET JOURNAL: Lehman Brothers Holdings (LEH) will probably post a fiscal Q3 loss of $1.8B or more. The firm previously expected to report a fiscal Q3 profit. INDEPENDENT.ie: Bain Capital has submitted a EUR900M bid for Elan’s (ELN) drug delivery business. NEW YORK TIMES: Barclays (BCS) may have to write down an additional GBP1.5B over the next 18 months, a Goldman Sachs analyst said. BLOOMBERG: The California Public Employees’ Retirement System, or Calpers, is reducing its stock holdings and investing as much as $2.3B in distressed-debt funds run by Leon Black’s Apollo Global Management.

Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of August 15: Enersys (ENS), Whiting Petroleum (WLL), Life Partners Holdings (LPHI), Brucker Corporatiom (BRKR), Sonosite Inc (SONO), Buckle Inc (BKE), Southwestern Energy (SWN), Skilled Healthcare Group (SKH), Apple Inc (AAPL), Microsemi Corp (MSCC), Kenexa Corporation (KNXA), Teledyne Tech (TDY ), Forrester Research (FORR), Itron (ITRI).

Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of August 15 : CAI International (CAP), Intuitive Surgical (ISRG), Dorchester Minerals (DMLP), Empresa Nacional de Electricidad (EOC), Baytrex Energy Trust (BTE), Cummins (CMI), Sadia (SDA), Flowers Foods (FLO), Newmarket Corporation (NEU), Gentiva Health Services (GTIV), Lufkin Industries (LUFK), SPX Corporation (SPW), Valmont Industries (VMI), Adobe Systems (ADBE)

Lehman likely to post Q3 loss, not expected profit-WSJ
Lehman Brothers Holdings (LEH) was anticipating a fiscal third quarter profit, but now it’s most likely to have a loss of $1.8B or more, reports the Wall Street Journal. If that’s correct the firm’s losses since March will be no less than $4.5B, or more than the firm’s fiscal 2007 profit. The question now is if the firm will need to raise new capital in addition to the $6B they received in June.

Asian Markets Wrap-Up for Monday, August 18
Asian stock advanced but most markets there fell. Indonesia and the Philippines were closed for holidays…JAPAN: The Nikkei 225 Stock Average rose 146.04, or 1.1%, to 13,165.45, while the broader Topix index gained 16.44, or 1.3%, to 1,263.75. Japan General jumped 13% to Y385. Mitsui Fudosan Co. was up 2.2% to Y2,325. Mitsubishi UFJ Financial Group (MTU) added 3.3% to Y845. Komatsu (KMTUY) rose 3.8% Y2,445. Sumitomo Metal Industries Co. leapt 7.4% to Y481. Nippon Steel Corp. was up 2.9% to Y538. Nippon Telegraph & Telephone Corp. (NTT) gained 5% to Y549,000…AUSTRALIA: The S&P/ASX 200 Index advanced 3.30, or 0.07%, to 4,985.00…AROUND ASIA: In Hong Kong, the Hang Seng Index retreated 229.91, or 1.1%, to 20,930.67. Sino Land (SNLAY) fell 4.9% to HK$13.20. Foxconn dropped 24% to HK$5.84. Cnooc (CEO) lost 1.9% to HK$10.52. PetroChina Co. (PTR) slid 1.2% to HK$9.83. Aluminum Corp. of China (ACH) was down 18 cents, or 2.7%, to HK$6.42.

JP Morgan will start emerging market fund for Indian investors-Economic Times
The Indian fund unit of JP Morgan (JPM) plans to launch a fund that will invest in Middle East, Africa and emerging Europe. The new fund will allow Indians to invest in those regions.

NBC expects to record a healthy profit on the Olympics-NY Times
The television ratings of the Olympics have easily surpassed the expectations of General Electric’s (GE) NBC. An average of 30M people have watched the Olympics on the NBC network each night, and network executives believe that NBC’s profits on the Olympics will exceed $100M.

U.S. equity futures point to a higher open
U.S. equity futures are pointing to a slightly higher open. Crude oil prices are relatively calm given the recent geopolitical concerns and reports of a tropical storm in the Gulf of Mexico. Any time a storm brews in the Gulf there are concerns of supply disruption related to the shutdown of oil operations. The current storm is moving erratically and forecasters expect it to eventually strengthen to hurricane force. Elsewhere, Russia has said it would begin to pull out of Georgia. Earlier, the president of Pakistan announced his resignation. Musharraf has been a U.S. ally even though he seized power though a military coup in 1999.

IBM product launch suspiciously low key-Globes Online
IBM (IBM) announced the first product of XIV following the acquisition eight months ago. The company issued no press release on the launch but merely mentioned it on its web page about system launches.

Retail: June quarter preview@WEDB
Wedbush expects to see upside to results and or guidance from: Ann Taylor (ANN), Aeropostale (ARO), Gymboree (GYMB) and Children’s Place (PLCE). They expect to see downside to results from: Casual Male (CMRG), Pacific Sunwear (PSUN) and Zumiez (ZUMZ).

American Express-AXP: difficult macro environ to result in high credit cost@FBRC
The time frame for higher-than-anticipated credit costs will be over the next 6-9 months when FBRC expects the stock to decrease from its current levels. Also boding negatively for card issuers are the two consecutive quarters of negative GDP growth, 4Q08 and 1Q09, that is anticipated by FBRC’s Chief Economist. Reiterate $32 price target and Underperform rating.

Research in Motion-RIMM: Checks suggest in-line August quarter@PACS
Based on PacCrest’s checks, August sell-thru for RIMM is not as strong as expected, and the direct to business sales are weaker. However, PacCrest still expects a strong November quarter on new product launches. The shares remain Outperform rated.

Dolby Laboratories-DLB: See slight upside to Sept. Qtr@PIPR
Piper said June quarter CEA data suggests Dolby licensing revenues will be flat to up 5% vs. the firm’s down 4.5% estimate. Shares are Buy rated.

Energy sector downgraded to Neutral from Overweight@JPMS
JP Morgan believes energy fundamentals are solid but expects capital flows to shift toward other sectors like Financials.

SanDisk-SNDK: Recommend selling shares on recent strength@SBSH
Citigroup believes contract pricing is tracking to a 22% drop in Q3 and sees risk to margins and 2009 consensus estimates. The firm maintains a Sell rating.

Focus Media-FMCN: Believe company’s guidance is conservative@OPCO
After Focus Media reported better than expected Q2 results, Oppenheimer thinks the company’s guidance for its fiscal year is conservative, and the firm would buy the stock at its current levels.

Potash-POT added to Top Picks Live List@SBSH
Citigroup believes the recent sell-off is overdone and maintains a Buy rating with a $264 target.

Vertex Pharma-VRTX volatility Flat at 60
VRTX closed at $28.46. Barron’s “VRTX, another company that some investors view as an eventual takeover candidate, is developing Telaprevir, a substance that promises to reduce the time needed to treat hepatitis-C, a potentially fatal liver ailment. Telparevir is currently in stage three testing.” VRTX over all option implied volatility of 60 is near its 26-week average of according to Track Data, suggesting non-directional price fluctuations.

Broker Q3 estimates cut given weak environment@UBSW
UBS cut estimates for C, JPM, GS and MS citing weakness across the board.

Japan’s economic comeback likely to be a long one-WSJ
Japan’s economic downturn isn’t too steep but the recovery time may be long, economists say. Last week the Japanese reported its worst GDP quarter in seven years, according to the Wall Street Journal, contracting at an annualized rate of 2.4%, but there wasn’t one overshadowing issued that caused it.

Google-GOOG: View recent weakness as a buying opportunity@WBLR
William Blair believes shares are attractive at current levels and maintains an Outperform rating

Google-GOOG: Expect benefit from Yahoo deal to be disproportionate@JEFF
Jefferies expects GOOG to benefit disproportionately from its deal with Yahoo (YHOO) given the increased network inventory and its ability to look into Yahoo’s display business.

Omrix $25 a share buyout offer would take them private-Globes
Omrix Biopharmaceuticals (OMRI) is considering a $25 a share buyout offer from a U.S. hedge fund that would take the company private.

Abercrombie & Fitch-ANF: building inventory a concern; valuation cheap@FBRC
Primarily due to overall weak macro retail, FBRC anticipates trading to be generally range-bound; however any positive impact from management’s flagship and international efforts, the firm would be more constructive on the stock. The firm reduced their 3Q08 and FY08/FY09 EPS estimates while maintaining their $55 target price and Market Perform rating.

Monsanto-MON estimates and target raised@MLCO
Merrill raised MON estimates based on higher indications by the company for 2009 biotech trait price increases. Target to $165 from $155. Shares are Buy rated.

Solar: JASO, FSLR, & SPWR mentioned positively@LEHM
Lehman said JASO, FSLR, and SPWR have relatively low sensitivity to exchange rate fluctuations while CSIQ and TSL have relatively high exposure. The firm said recent dollar strength may be a near-term headwind but said downside is limited given valuations.

Dow Jones Industrials Index-DJX: Pivot Points
The following are the pivot points for the Dow Jones Industrials Index (DJX). Pivot High: 11739.975, Pivot Low: 11629.815. 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: 1305.365, Pivot Low: 1294.485. 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: 1965.610, Pivot Low: 1942.160. 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.

Fast Money position recap- First Moves: Joe likes NOV, Pete likes STZ, Karen likes GLNG.
Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (CSCO) Calls, (NVDA) Calls: Najarian Owns (HCBK) Puts; Finerman Owns (GS); Finerman’s Firm Owns (JCP), (MO), (NOK), (SUN), (TSO), (VLO); Finerman’s Firm And Finerman Own (GLNG); Finerman’s Firm And Finerman Own (C) Leaps
Finerman’s Firm Is Short British Pounds; Finerman’s Firm Is Short (XLF), (BBT), (COF), (SPG), (IYR), (IJR), (MDY), (SPY), (IWM).
Terranova Owns (RIMM), (AAPL), (IYT), (XLF), (KOL), (VLO), (SA), (GS), (POT), (FCX), (NOV), (X), (EOG), (INTC), (GOOG), (CME), (BNI), (SA), (YHOO), (SU); Terranova Is Short Crude Oil Time Spread (Short Dec. 2008, Long Dec. 2012); Terranova is Long Crude Oil (Dec. 2012).

Art Cashin saw a disconnect between oil prices moving up and the market moving up. He wants us to watch the market and how it responds to economic data or oil and commodity prices. The economic numbers to watch this week are the housing numbers and the market’s subsequent reaction to them. Europe is quiet for the week and trading could be thin and quiet for us this week as well. Optiondragon Leading Indicator Basket - LIB= UUP (dollar) + USO (inverse price related) + XLF (has been moving in lock step with this one) + IWM (small caps have been outerforming and leading lately , let’s see if this correlation holds) + (GOOG+ AAPL + RIMM) (tech leadership).
Pick plays with a high probability of success, have focus and patience, run technicals through supply and demand.
Great luck and Happytrading! Come visit us myhappytrading.com, our new home for traders and investors.

More fractals and patterns in nature just like patterns in the market, both are run on formulas.

Turbines at the Barrage de la Rance electric power generating station in France create a whirlpool in the Rance River.

By optiondragon | Posted in Uncategorized | Comments (0)

Market Forecast + Sector Watch 8/18/2008: SPX, Nasdaq, USO, UUP, GLD, XME, HGX, PBW, XLE

August 17, 2008 – 9:16 pm

from My Happy Trading.com

The market eked out a small gain with SPX adding only +1.88 points for the week. However, the techs were stronger. Nasdaq gained +38.42 points. The general sentiment on the market was better as the dollar bounced strongly and oil prices fell lower. Commodities continued to be on the weak side. Gold closed below $800/ounce. Other commodity-related areas, such as mining and agriculture, tried to bounce, but, still ended lower.

Let’s see where the market stands:
SPX

On Friday, SPX added +5.27 points to close at 1298.2, just below the 1300 level. Its daily MAs curved up and the MACD went higher.

Nasdaq

Nasdaq slide 1.15 points to close at 2452.52, above the 2450 level. Its daily MAs and MAcd continued to go higher.

For the new week, the market still looks strong and has room to go higher. Going above 1300, SPX’s next resistance is at 1340. Nasdaq closed above 2450 and could go to 2550 before finding solid resistance. We will continue to watch the financial sector carefully. Also, we’ll have to see if the dollar can keep on climbing…

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By HappyTrading | Posted in Nasdaq, SPX, GLD, XME, USO, HGX, PBW, XLE, UUP | Comments (0)

Weekend Research, News Flow and Linkfest.

August 17, 2008 – 7:01 pm

Posted By Optiondragon for myhappytrading.com, a social network made by traders for traders.

A weekend linkfest area for traders and investors to post market moving news.

This is what the Optiondragon is reading and filtering….

Please go to the new website www.myhappytrading.com to read all links and subjects.

Some good listening and thinking from NPR….

Christopher Alexander-
His groundbreaking book A Pattern Language urged architects consider emotional and spiritual ideas when designing. It was the beginning of an elaborate, nuts-and-bolts philosophical system. Alexander failed to revolutionize the practice of architecture, but he inspired a movement in computer programming that affects how all of us use the Web. Studio 360’s Lu Olkowski talked to the architect and some of his disciples, including “wiki” inventor Ward Cunningham.

By optiondragon | Posted in Uncategorized | Comments (0)

Weekly Wrap!

August 16, 2008 – 6:24 pm

from MyHappyTrading.com

Last weekend, in my Market Forecast, I said,
“For the new week, the market seems to be in a very good position to continue higher. Nasdaq has already formed a new bullish formation and caught up with its daily upper BB. Nasdaq could test 2450 soon. SPX is about to catch its daily upper BB and the 10-day MA has risen above the 30-day MA. Above 1300, the next resistance for SPX is 1340. Both oil and gold prices dropped off sharply last week, as the dollar jumped to its 6-month high range. The financials took a big step back last Thursday on AIG’s earnings, but, was able to regain its footings on Friday. The techs are showing a lot of strength with the biotechs leading the way and semiconductors recovering well.”

Nasdaq closed above 2450 and SPX closed just under 1300. We indeed saw oil and gold fall fruther, and, techs continued to lead the market. Financials were weak. But, the overall market managed to make gains.

We had quite a few nice trades this week. Besides 1 trade, we were 100% GR$$N on closed trades. The UAUA trade would have actually been a profitable trade if we had stuck to our guns, as UAUA closed above $14 on Friday. But, it was good to be careful as oil bounced in the middle of the week:

HappyTrading GENZ ($82.76) Sold to Close GAAIP Sep 80 calls, at $4.60 +64%
HappyTrading GENZ ($82.95) Sold to Close GAAHP Aug 80 calls, at $3.00 +13%
HappyTrading GOOG ($504.50) Sold to Close GOPHO Aug 500 calls, at $7.00 +43%
HappyTrading GOOG ($500.50) Sold to Close GOPHO Aug 500 calls, at $5.00 +9%
HappyTrading RIG ($131.20) Sold to Close RIGIF Sep 130 calls, at $7.20 +6%
HappyTrading UAUA ($12.70) Sold to Close UALHB Aug 10 calls, at $2.75 -26%
HappyTrading CME ($356.50) Sold to Close CMEHG Aug 350 calls, at $11.50 +113%
HappyTrading AMZN ($86.50) Sold to Close ZQNIP Sep 80 calls, at $9.35 +120%
HappyTrading WYNN ($113.00) Sold to Close UWYIB Aug 110 calls, at $9.30 +55%

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Premarket Analysis for 8/15 - Upgrades/Downgrades, Gappers, Actionable Calls

August 15, 2008 – 5:32 am

Posted By Optiondragon for myhappytrading.com, a social network made by traders for traders.

From Briefing.com

Periodicals Wrap-Up for Friday, August 15th
WALL STREET JOURNAL: The Wall Street Journal reported that the Federal Aviation Administration is planning to fine AMR Corp’s (AMR) American Airlines $7.1M for knowingly flying airlines that did not comply with maintenance regulations and reportedly violating drug- and alcohol-testing procedures for employees…The Wall Street Journal also reported that a division of UBS AG (UBS) was accused by New Hampshire securities regulators of urging a non-profit student lender to continue issuing auction-rate securities despite the bank knowing the market was nearing a collapse…NEW YORK TIMES: Deutsche Telekom’s (DT) T-Mobile is expected to become the first company to market a cellular phone utilizing Google’s (GOOG) Android software, inside sources said. HTC will make the phone, which is expected to be launched in the U.S. before Christmas, the New York Times reported…BLOOMBERG: Merrill Lynch (MER) recorded $29B of losses from its British subsidiary’s investments in U.S. subprime mortgages and collateralized debt obligations. As a result, Merrill’s tax obligation in Britain may drop by as much as $8B, according to Bloomberg…Bloomberg also reported that top executives at Star Surgical (STAA) are betting the company’s lens implants will gain on Lasik treatments and have purchased 93,050 non-option related shares so far this year, increasing rumors of a potential takeover. Heartland’s Adam Peck says the company may be an attractive target because of recent cost cutting efforts, little competition and potential sales growth and thinks Bausch & Lomb or Johnson & Johnson (JNJ) could take a second look at Star…

Blackstone may team up with other private equity firms to buy Informa-Telegraph
Private equity firm Blackstone (BX) is holding negotiations with private equity firms Providence and Carlyle about launching a consortium to bid for Informa, which publishes Lloyd’s List.

Asian Markets Wrap-Up for Friday, August 15
Asian stocks retreated ending a third consecutive down week as most Asian markets declined. South Korea and India markets were closed for holidays…JAPAN: The Nikkei 225 Stock Average was up 62.61, or 0.5%, to 13,019.41, while the broader Topix index gained 8.38, or 0.7%, to 1,247.31. Shipper Kawasaki Kisen jumped 4.9% to Y809. Mitsui O.S.K. Lines was up 2.8% to Y1,323. Ulvac surged 13% to Y3,480. Nikon Corp. (NINOY) added 3.8% to Y3,600. Elpida Memory rose 6.3% to Y2,795. Urban Corp. tumbled 82% to Y6…CHINA: The CSI 300 Index advanced 4.10, or 0.2%, to 2,447.61. Ping An gained 1.8% to 41.83 yuan. Merchants Bank increased 1.8% to 21.99 yuan. Shanghai Pudong Development Bank Co. added 0.7% to 21.26 yuan. Panzhihua Steel surged 10% to 7.58 yuan. Maanshan Iron & Steel Co. was up 2.6% to 4.38 yuan. Zijin Mining dropped 1.5% to 5.34 yuan. Haitong Securities Co. lost 3.9% to 16.88 yuan…AUSTRALIA: The S&P/ASX 200 Index was up 0.60, or 0.01%, to 4,981.70. Woodside Petroleum (WOPEY) lost 2.5% to A$54.20. Newcrest Mining (NCMGY) slipped 2.5% to A$24.43. BHP Billiton (BHP) fell 1.9% to A$37.98. Rio Tinto Group (RTP) sank 2.4% to A$115.15…AROUND ASIA: The Hang Seng Index fell 232.13, or 1.1%, to close at 21,160.58. Cnooc (CEO) dropped 4.3% to HK$10.72. PetroChina Co. (PTR) slid 1.1% to HK$9.95. Aluminum Corp. (ACH) was down 2.9% to HK$6.60. :

Dropped calls on the iPhone causing Apple headaches-WSJ
Apple’s (AAPL) new iPhone 3G has a software problem: A number of users are experiencing dropped calls, reports the Wall Street Journal. Apple had no comment. “It’s not about whether you have problems or don’t have them,” says Ken Dulaney with Gartner Inc. “It’s how quickly you address them that matters. If Apple addresses them, people will cut them slack.”

U.S. equity futures point to a higher open
U.S. equity futures are pointing to a higher open as oil prices continue to drop. The price of crude is lower by about $1.75 to about $113. Also falling is the price of gold which is down almost $30 an ounce to about $788 an ounce. Analysts are attributing the drop in commodity prices to slowing economies around the world, but the drop in energy prices has given U.S. investors hope that lower prices means more discretionary income. That has given the equity markets a boost over the past couple of weeks and is continuing to do so this morning

Balance sheet problems raise doubts about Wells Fargo-WSJ
Wells Fargo’s (WFC) premium valuation just lost some of its luster as new disclosures reveal that earnings may not be what they appear to be, according to the Wall Street Journal’s “Heard on the Street”. For one, illiquid assets, or “level three” assets, have grown signaling lower demand and possibly with big write-downs to follow. The company isn’t talking. Also, those level three assets include CDOs which could also portend big losses. Also, short term debt jumped 60% to $86.1B. Cheap money for now but that could change.

Buffalo Wild Wings thrives where others fail-IBD
Double digit sales growth for 12 straight quarters defines Buffalo Wild Wings (BWLD), especially as tough economic times have depressed sales at a number of restaurant chains nationwide. What are they doing right? “”I think it’s really the experience that sets us apart,” says CEO Sally Smith. “We’ve been very focused on meeting the guests’ needs and desires. It’s not about turning tables, it’s about guests staying as long as they want.” With 526 restaurants in 38 states second quarter company-owned same store sales increased 8.3%, and 4.5% at franchised units. Earnings jumped 41% to 31 cents per share, as sales were up 29% to $97.9M. Lynne Collier with KeyBanc Capital Markets looks to the $12 price point. “I think their price value is very attractive. It has good quality food in good quantity for the price”, she says. The ad budget was increased 50% in the second quarter, with more to come. Analysts expect 2008 earnings to climb 28% to $1.41 a share, and then be up 22% in 2009, and another 28% in 2010.

Google’s GPhone: Powerful but not elegant-Silicon Alley Insider
Early insider reviews of Google’s (GOOG) new Android phone say that it’s powerful but nothing like Apple’s (AAPL) iPhone. Reportedly it’s bulky and big, and hardly a design marvel.

AT&T reportedly getting iPhone 3G stock about August 21-Boy Genius Report
Availability is said to be based on existing direct fulfillment orders being filled.

China Yahoo to enter gaming market-Pacific Epoch
China Yahoo (YHOO) is expected to enter the gaming market and has had talks with a Chinese gaming firm.

SunPower-SPWR volatility low; shares rally on PCG electricity deal
SPWR is recently up $8.13 to $86.70 in pre-open trading. PCG announced it will purchase electricity from a facility built by SPWR. SPWR over all option implied volatility of 54 is below its 26-week average of 64 according to Track Data, suggesting decreasing price movement.

Alexion Pharm-ALXN volatility Flat; shares near record high
ALXN, an developer of anti-inflammatory therapeutics primarily for hematological and cardiovascular discords, autoimmune diseases and cancer, is recently up 71c to $95.11 in pre-open trading. Cowen has an Outperform rating on ALXN. ALXN over all option implied volatility of 46 is near its 26-week average according to Track Data, suggesting non-directional price movement.

First Solar-FSLR: Buy shares, a deal may come soon@SBSH
Citigroup said SPWR’s deal with PCG was from last year and FSLR was not in the market. The analyst said they would buy FSLR on the news and not SPWR (do to low margins) as checks suggest FSLR will have a large-scale announcement soon.

Lehman Brothers-LEH: Target estimates lowered, see $3.6B in write-downs@FPKI
Fox-Pitt lowered Lehman’s target to $50 from $62 and its FY08 EPS estimate to $3.99 from $4.50 as they expect the broker to have write-downs of $3.6B.

J.C. Penney-JCP reports Q2 EPS 52c vs. consensus of 50c
Reports Q2 revenue $4.28B vs. consensus of $4.28B. The Company reported that comparable store inventory levels at the end of the second quarter were below last year, and it remains on track for total inventory to be below 2007 levels by the end of the Back-to-School season.
J.C. Penney-JCP sees Q3 EPS 70c-75c vs. cosnensus of 75c
Sees Q3 sales down in the low single digits, sees Q3 SSS down in the mid single digits.
J.C. Penney-JCP reports Q2 SSS down 4.3%

SunPower-SPWR signs substantial agreement with PCG@TWPT
tThomas Weisel said PCG has entered into two large scale contracts for a total of 800MW with SPWR and OptiSolar, SPWR will install 250MW. The firm views the win as a positive for SPWR and for the large scale systems market. The firm notes that this is not a negative for FSLR and would recommend buying shares on any weakness.

Urban Outfitters-URBN: Believe company has strong momentum@FBRC
After Urban Outfitters reported higher than expected EPS, Friedman Billings believes the company has a top management team and has shown that it can perform well during the economic slowdown. The firm reiterated their Outperform rating.

Urban Outfitters-URBN: Stock highlighted as Top Growth-Oriented Pick@FBRC
FBRC advises investors to take advantage of the stock pullback in the low $30s to buy shares, as well as cutting back as it accelerates to the high $30 range. The firm believes the company will be outperforming their peers. FBRC increased their FY08/FY09 with a $39 target price. Valuation is extremely rich and the firm reiterates their Outperform rating.

Ricks Cabaret-RICK: Believe company will take more market share@MERI
After Ricks reported lower than expected EPS for its Q3, Merriman believes the miss was caused by start-up costs, and they think the company’s core club trends are still solid. Merriman maintained their Buy rating. :

Sanderson Farms-SAFM initiated with a Buy, target $58@BBNT

Soros Fund raises stake in Lehman-LEH to 9.47M shares from 10k shares.
Very interesting development here….mental note. Soros was super bearish about the market and economy, this could be the first sign that his view is changing, albeit possibly slowly.

National Oilwell Varco-NOV upgraded to Buy from Add@LYON
Calyon upgraded NOV on valuation. Target to $96 from $108.

SunPower-SPWR upgraded to Buy from Neutral@MLCO

DNA downgraded to Hold from Buy@SBSH
Citigroup would not chase shares at these levels, but does expect Roche to increased their $89 offer. Target to $108 from $91.

Red Robin Gourmet-RRGB: Believe stock has compelling long-term risk/reward@JEFF
After Red Robin reduced its 2008 EPS guidance, Jefferies believes the stock’s “dirt cheap” valuation already accounts for this announcement. The firm maintained their Buy rating.

Priceline.com-PCLN upgraded to Buy from Hold@SBSH
Citigroup upgraded PCLN based on valuation. Target $130.
Nice premarket pop here.

Bill & Melinda Gates raises stake in American International-AIG to 2.5M shares
Bill & Melinda Gates previously reported holding 1M shares of American International.

Bill & Melinda Gates Foundation reports a 1M share stake in Crocs-CROX

Nasdaq Composite-$COMP: Pivot Points
The following are the pivot points for the Nasdaq Composite ($COMP). Pivot High: 2480.780, Pivot Low: 2434.040. 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 Dow Jones Industrials Index (DJX). Pivot High: 11800.800, Pivot Low: 11533.410. 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: 1307.215, Pivot Low: 1285.005. 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.

(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: Guy likes DE long, Karen likes NOK, Pete likes JNPR. Macke Owns (COST), (DIS), (MSFT), (WMT), (UUP); Adami Owns (C), (GS), (INTC), (BTU), (AGU), (MSFT), (NUE); Najarian Owns (AAPL), (NOK), (TSO), (XTO); Najarian Owns (WPI) Calls, (ONXX) Calls, (MRVL) Calls, (CSCO) Calls; Najarian Owns (BGG) Puts; Finerman Owns (GS); Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Owns (JCP), (MSFT), (NOK), (SUN), (TSO), (VLO), (MO); Finerman’s Firm Is Short (IYR), (IWM), (SPY), (IJR), (XLF), (BBT), (COF); Finerman’s Firm Owns (ANF) Call Spreads; Finerman’s Firm Is Short British Pound.

Looks like the market is getting another boost this morning from the drop in oil prices and dollar stabilization. Here we are at 1290 again. Bears are looking for reasons why the market should go lower and finance stocks to plunge lower like they have some sort of knowledge the market doesn’t know about. Cherry picking the data in which your bias resides continues to work for both sides. Where are the regional banks trading at? Where are the big center money banks trading at? Is the market wrong? Why is Soros buying 10 million shares of LEH here? Has age overtaken his common sense? LOL Yeah right. We have a closet full of “dead bodies”, and the bears think there will be more. Clearly they aren’t going against the grain and the market loves to do the opposite of what the majority think. If Greenspan is right and a recovery for housing sits in the first 6 months of 2009, the market should start pricing in a recovery in the next couple months since the market looks 6 months ahead.
Greenspan called the “recession” in january of 2007 and the market reacted violently and in the end Greenspan was right. He foresaw a big economic pullback when Ben’s Fed was still raising rates. Ben’s Fed was waaaay behind the curve and when they were raising they should have been cutting as I suspect Greenspan would have done. Option expiration today and I expect the Optiondragon LIB will tell me where the market will go.
Optiondragon Leading Indicator Basket Formula: LIB= UUP (dollar) + USO (oil price inverse related) + XLF + IWM + (AAPL+GOOG+RIMM).

Patterns in Nature : Think Fractally, patterns emerge in nature as they do in the market both are represnted by formulas.