OptionDragon

Market Comments and Economic Recap from Optiondragon for 1/21/2008.

OptionDragon — Wed, 21 Jan 2009 21:18:00 GMT

By Optiondragon

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"Believe" - Lenny Kravitz- play this song while reading the article, join us on myhappytrading.com trade room, where hedge fund managers, ex-fund managers and high level option traders talk about the markets all day!

Market comments of the day from optiondragon in sequence as well as market data:

With courage you will dare to take risks, have the strength to be compassionate, and the wisdom to be humble. Courage is the foundation of integrity. --K. Nair

I've made about 3 trades this month....hmmmm

Larry, AAPL not sure about the ER tonight but it will be a doozy one way or the other...

WOW NTRS blew out earnings here!!!!!

Happy read email from me...got you on Seeking Alpha...they love your stuff bro!

Stocks remain higher
Stocks are higher after the first hour of trading. The markets advanced at the open and looked as if they would give up their gains until moving higher about 30 minutes into the session. Stocks are down more than -10.0% since the beginning of the year and looked as if they would test the market lows from November. At least for now it looks like the oversold condition, along with good earnings from IBM (IBM), will keep that from happening. But with many earnings surprises and economic reports still to come it may just be a matter of time

S&P Sector Watch: Mirror Day
After the first hour of trading the S&P sectors are a mirror of yesterday's action. Financials (XLF) up +5.5% are the upside leaders while the "safety" names, notably the Consumer Staples (XLP) up +0.05%, are drastically under performing. The shedding of safety and preference for risk is evident in Energy (XLE) up +2.6%, Technology (XLK) up +2.51% and Consumer Discretionary (XLY) up +1.08%. How long the tape can stay this way given the cross-currents is an open question, especially where the Financials are concerned

Review of U.S. Economic Data for Wednesday, January 21
ICSC-Goldman's same-store sales total for the week of January 17 increased 1.1% week-over-week, but the total decreased -1.8% year-over-year. OTHER DATA: Redbook reported that same-store sales during the week of January 17 dropped -2.3% year-over-year

Northern Trust-NTRS: Major Resistance at $55 Area
The shares jumped this morning after better than expected earnings results. The first major hurdle for the shares is the $55 area. This area was previously important support and has been resistance now for the past month. It would bullish if the shares could clear this area to the upside. In that event the following resistance levels could become additional upside objectives: $55.75, $56.60, $57.58, $58.50, $59.50. Support is currently at $53.64, $52.75, $51.94

doing scans right now......seeking a kill.....

Bullish on urea prices near-term, says Scotia Capital
Scotia Capital said urea prices should move higher near-term given the Russia/Ukraine natural gas settlement, the closure of 17 urea plants in India, and an additional 100% China urea export tariff planned for February 1. The firm said higher urea prices are positive for Agrium, (AGU), Terra (TRA) and CF Industries (CF)

Markets advance at the open
Stock futures rose in the hour before the market's opening allowing the averages to open higher. The Johnson Redbook, which measures retail sales, showed sales for the first two weeks of January fell 2.55% versus the first two weeks of December. The number was not bad given that December is during the holiday shopping season. There was good earnings from Northern Trust (NTRS), Bank of New York (BK) and U.S. Bancorp (USB) which is helping the financial sector, and good earnings from IBM (IBM), helping the tech sector

Tim Geitner taking full responsibility of his wrong tax return...excellent, thats what you want to hear...this guy is sharp and smart and exceptionallly fit for the job....we need this guy....we need him.

You see his eyes and you listen to his words....the guy is focused....the guy knows what we need to do and at the very least Tim Geitner is experienced with the recent turmoil AND as my brother has pointed out he has made his fair share of mistakes...such as letting LEH fail...which is blood on his hands....should not have done that....we learn ...we all make mistakes...who is perfect here?

AmTech announces list of favorite tech names
American Technology's list of favorite technology stocks includes eight names: Cypress Semi (CY), Hewlett-Packard (HPQ), Monolithic Power (MPWR), Maxim (MXIM), NetApp (NTAP), Qualcomm (QCOM), Research in Motion (RIMM), and Verisign (VRSN). The firm believes each company enjoys a solid competitive position, balance sheet security, and attractive valuation

7:54 AM: DJT going lower.....not good....we need rails to stabilize....again it is a current economic activity indicator and future indicator of economic activity....

S&P testing previous close....Bagger doesn't see much either....either you short the rallies or hold for 3 hour trades

General Electric-GE put volume and volatility indicating AAA and dividend risk
GE is recently down 46c to $12.47. GE is scheduled to announce Q4 EPS on January 23. GE has been frequently subject to reports of AAA rating and dividend reduction risk. GE call option volume of 42,850 contracts compares to put volume of 52,250 contracts. GE February call option implied volatility is at 91, puts are at 105; above its 26-week average of 41, according to Track Data, suggesting downside price trends

GOOG great looking chart for a spike up on a big surprise..limited on the downside IMO

Buyer's strike....no demand right now.....institutions?

everything is decimated so the % moves are kinda misleading

Markets struggling to maintain their gains
The averages are barely higher after giving up all their gains, falling into negative territory and then crossing back into the green. Although there is a lack of economic news the major story of the day is the Capitol Hill confirmation hearings of Treasury Secretary designate Tim Geithner. Investors hope his approval can be swift as he has said President Obama’s plan for the economy will be unveiled over the next few weeks. The stumbling block to Geithner’s confirmation is his failure to pay $34,000 in taxes for which he has apologized and claimed was a mistake

bluetick thanks for the reminder on FXY haven't looked in awhile....

Bagger says FXY skying like that bcuz FXE is tanking.....

Stocks move higher again
Stocks are higher once again. They have been mostly higher today but moved into negative territory a couple of times only to then move higher. The airline sector is lower today as both AMR Corp. (AMR) and UAL Corp. (UAUA) reported large losses. Each said that economic conditions and fuel costs were the reasons for the losses despite oil prices coming down since the summer. The shares of AMR are down more than -22.0% and UAL is down more than -9.50%. The shares of UAL had been lower but received positive comments from J.P. Morgan and Morgan Stanley, and the shares moved higher

Obama to ask generals for 16-month Iraq withdrawal plan-AFP
According to aides, President Barack Obama will meet with Secretary of Defense Robert Gates, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen and the top US commander in southwest Asia, General David Petraeus today in a bid to follow through with his campaign pledge to bring U.S. troops home from Iraq within 16 months

U.S. Market Mid-Day Wrap-Up for Wednesday, January 21
The markets opened higher today on word that President Obama's economic plan will help to rescue banks. Citibank (C) and Bank of America (BAC) were among the firms that reacted positively to that speculation. IBM (IBM) surged when its 2009 profit forecast beat analysts' estimates. The Senate Finance Committee is holding confirmation hearings of Treasury Secretary designate Tim Geithner. At mid-day the Dow was up 55.91 to 8,005.00, the S&P was up 6.55 to 811.77, and the Nasdaq was up 14.92 to 1,455.78...MARKET NEWS: General Electric (GE) fell on concerns that it will cut its dividend and that its debt rating is at risk. General Motors (GM) was down and slipped to second place as Toyota last year became the largest car maker in the world. Apple (AAPL) is due to report quarterly earnings after today's close and its shares moved higher. BlackRock (BLK) was down after saying its fourth quarter earnings were lower by 84%...MARKET MOVERS: Among this morning's most active stocks were Bank of America, Citigroup, Well Fargo & Co. (WFC), General Electric, Microsoft (MSFT) and Oracle (ORCL).

European Markets Wrap-Up for Wednesday, January 21
Led by pharmaceutical companies and utilities, most European stocks declined...In the UK, the FTSE closed down -1.14% to 4,044.91. Elsewhere, the German DAX rose 0.19% to 4,247.78 and France's CAC decreased -1.17% to 2,891.17...MARKET NEWS: Bank of England Governor Mervyn King said officials may start buying assets within weeks in order to loosen credit markets... GlaxoSmithKline (GSK), Europe's largest drugmaker dropped 4%, while GDF Suez SA, the world's second largest utility, dropped 2.4%... Barclays (BCS) fell as much as 35% on speculation it may be forced to take more writedowns and be nationalized... Society Generale (SCGLY) rose as much as 9.6% after it said it will receive $2.2B in a second round of government aid to bolster capital... Ericsson (ERIC) rose 12% after it reported Q4 results. The company said it will cut 5,000 jobs, of which about 1,000 will be let go in Sweden... Fiat SpA dropped as much as 4.8% on concern that an alliance with Chrysler will jeopardize its turnaround... National benchmark indexes fell in 14 of the 18 western European markets

President Obama to institute pay freeze on senior staff members

Markets continue to be positive and are trading in a narrow range
The averages are higher and have been in a fairly narrow range for the past hour. The NAHB Housing Market Index hit another all-time low with a reading of eight versus an expected reading of nine. Each of the major indices is higher by at least 1.30%. Advancing stocks are ahead of declining stocks by a 5:4 margin, and the up volume is ahead of down volume by almost 2:1. Crude oil prices are higher by almost 2.0%, while gold is down almost -1.0%

11:15am: Market running after the swear in of the white house staff....

bluetick yeah that could be the case, yesterday the reason we went down now that ive had time to think about it was because of Noreil roubini's new financial update which was gloomy and expected more downside and bank problems.

http://optionarmageddon.ml-implode.com/2009/01/20/roubini-banking-system-effectively-insolvent/

Roubini- yup he was dead on his call on the finanicial disaster early 2 years ago....

Companies reporting Before Market Open on Thursday, January 22
The more notable companies reporting tomorrow before the market open include AmeriSourceBergen (ABC), Baxter International (BAX), BB&T Corporation (BBT), CIT Group (CIT), Comerica (CMA), Consolidated Edison (ED), Exelon Corporation (EXC), Fifth Third Bancorp (FITB), Huntington Bancshares (HBAN), International Game Technology (IGT), Janus Capital Group (JNS), KeyCorp (KEY), Lockheed Martin Corp. (LMT), Southwest Airlines (LUV), M&T Bank Corporation (MTB), Meredith Corporation (MDP), Sherwin-Williams (SHW), SunTrust (STI), UnitedHealth Group (UNH) and Union Pacific Corporation (UNP

Companies reporting After Market Close on Wednesday, January 21
The more notable companies reporting today after the market close include Apple (AAPL), Burlington Northern Santa Fe Corporation (BNI), eBay (EBAY), Noble Corporation (NE) and SLM Corporation (SLM)

Stocks move higher
Stocks are now near their highs of the day. Each move lower was met with buying and the fact the sellers could not win the battle may have caused them to throw in the towel. Then the averages moved higher. Most of the sectors are higher as well with the exception of the utilities sector and the defensive minded consumer staples sector. The tech sector is enjoying a rally following a positive report from IBM (IBM). The sector will get a chance to improve on that when Apple (AAPL) and Ebay (EBAY) report their earnings today after the close.

Ladenburg: Nationalization of banks will never happen
Ladenburg analyst Bove believes the nationalization of banks will never happen and that it makes no sense to speculate it will. Bove believes that some entity on behalf of shareholders must demand accounting reflects the true cash flows of the banks as he believes a lack of creditability is "killing" the banking system, not loan losses

Hawking WFC, financials, GS, MS

bought WFC 17.50 feb calls at 1.90

SKF complete collapse....floortraders cheering on cnbc.....

At the market close: True, Steve Liseman of CNBC says that the market likes Tim Geitner and he knows where the "bodies" are buried......he is in the know about this whole mess as Paulson and the gang leave....

Recap of Market and Economic Comments from Optiondragon for 1/20/2008.

OptionDragon — Tue, 20 Jan 2009 21:09:00 GMT

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Journey - Don't Stop Believing

A new Dawn has arrived for the US as the Beauty of the American Process was shown today with the peaceful transfer of power between two US presidents. Obama being sworn in and the largest crowd ever assembled for a new US president, gave hope to hundreds of millions if not billions of people worldwide. In the markets it was all about the financials today as PNC, STT, XLF, WFC all took huge hits. The thought that Cramer put out there is that it is from the SKF buying which in turn is depressing the financials since it is an Short Leveraged ETF. By buying the SKF, it pushed a basket of stocks within the SKF which didn't have any correlation to each other other than they were all compnents of this ETF the SKF. The STT news of the day really started the day off the wrong foot and the day's ending was not too pretty as some rails made new lows and the XLF (financials ETF) touched its 52 week low. Remember that the new market table is comprised of the financials (XLF), basic materials (XLB), tech (QQQQ), and energy (XLE). Without leadership to the upside in these components of this market the table will be slanted and will falter. ^QGRI (QGRI) which is the ETF for the TARP companies who have taken at least $1 billion from the TARP is making new lows and is one of the components to my leading indicator for the economy and market. If this ETF fails the market should weaken further.

Here are my day's market comments with time stamps and here is my LIB (Leading Indicator Basket) formula to get a grip of where the market could go in the short term.

Optiondragon Leading Indicator Basket (LIB): LIB= QGRI + SKF (inverse related; financials) + VIX (inverse related) + USO + (.25) XLE + (.50) XLB + (.50) QQQQ

January 20, 2009 7:20 AM

-->State Street dives 50% after announcing unrealized losses
State Street (STT) announced in an 8-K filing late Friday that it had $5.5B of unrealized losses as of December 31, 2008. The company said that the losses are "associated with our portfolio of investment securities available for sale and held to maturity." State Street explained that the market values for the securities in its portfolio dropped significantly last year due to disruptions in the capital markets. Furthermore, State Street said it had $3.6B in unrealized losses from issuing asset-backed commercial paper. Meanwhile, the company reported Q4 EPS of $1.18, versus analysts' consensus estimate of $1.14. The company's revenue was also higher than expected. However, Ladenburg analyst Bove believes that State Street's 8K form reinforces the risk associated with the shares. The analyst thinks that State Street may see the need to consolidate its off-balance sheet conduits. Such a move could cause State Street to sell 140M new shares, and a share sale of that magnitude may not be possible in this market, Bove adds. State Street's stock sank $18.77, or 51.64%, to $17.52 in early trading. State Street competitors Bank of New York Mellon (BK) and Northern Trust (NTRS) declined 28.75% and 9.96%, respectively.

7:20 AM
Yeah financials just getting pounded, Luck thinks we touch Nov. lows on this momo....we will see....

7:23 AM

-->Big day for America as I am proud of the beauty of the American Democratic Process....the peaceful transition of power and the peaceful process of Change in governement....our breathern around the world get to see the true power of America today.....peaceful change with no blood...

7:24 AM

-->Success is NOT the key to happiness... Happiness is the key to success... If you enjoy what you're doing you will be successful. --Albert S

7:25 AM
JPM: November Low in View
The November low appears certain to be tested today. That low, at $19.69, needs to hold to avoid a potentially more severe downside reaction. What we have on the chart is in essence an "h" pattern. This pattern is also evident on a long-term weekly chart. When the second descender of the "h" is broken, the downside can accelerate rapidly. In that event, support levels to watch as potential downside objectives are at $19.50, $18.91, $18.58, $18.22, $17.86, $16.96, $16.50, $16.13

7:25 AM

-->Goldman Sachs-GS: Small Bearish Head and Shoulders in Progress
There is a small bearish head and shoulders in progress on the 5-minute chart. The neckline was at $71. It would take a move back above that level to void the pattern. Downside potential for the pattern is to the $63.50 area
7:26 AM

-->Gappers Report: Bullish Gaps for January 20 2009
This is a list of stocks making unusual moves on the open versus the prior day close. Gapping stocks often have excessive movements during the day and in the days thereafter. We use 5% for filter criteria and scanned for stocks that traded above $10 the prior day. GAPPING UP: KED +5.42%, HMC +5.66%, MCI +5.84%, CCT +6.52%, NTRI +6.60%, PJI +7.13%, PYK +7.20%, NBL +7.80%, FISI +8.72%, LBTYB +12.07%, EMITF +12.46%, ISRL +12.94%, MCEM +13.13%
7:26 AM

Weakness in the global financial system drives stocks lower at the open
As expected the averages opened sharply lower. The weakness in the global financial system is being attributed to the weakness. European banks are sharply lower as the Royal Bank of Scotland (RBS) said they would have additional multi-billion dollar losses. The announcement came on the heels of last week’s multi-billion dollar losses from Citigroup (C) and the Bank of America (BAC). The markets may have a chance to rebound given the optimism surrounding the presidential inauguration of Barack Obama

Gappers Report: Bearish Gaps for January 20 2009
This is a list of stocks making unusual moves on the open versus the prior day close. Gapping stocks often have excessive movements during the day and in the days thereafter. We use 5% for filter criteria and scanned for stocks that traded above $10 the prior day. GAPPING DOWN: STT (-45.28%), PUK (-21.52%), MSZ (-15.97%), HBC (-15.12%), HOFD (-13.89%), NTRS (-12.86%), LOGI (-12.26%), FWRD (-11.93%), CGV (-10.94%), SSL (-10.60%), WFC (-10.22%), STI (-9.73%), VSEC (-9.56%), FMBI (-9.15%), CRH (-8.47%), AXA (-8.42%), JEF (-8.29%), MTA (-8.02%), JPM (-7.98%), AAUK (-7.62%), CNX (-7.40%), PVSA (-7.36%), IIF (-7.09%), CHU (-6.95%), BBL (-6.66%), ELP (-6.61%), RRGB (-6.54%), BHP (-6.08%), IWOV (-5.96%), AKZOY (-5.94%), USAK (-5.93%), SAP (-5.84%), WDR (-5.79%), NXY (-5.67%), MSJ (-5.57%), MKTAY (-5.50%), SHG (-5.42%), MICC (-5.41%), CNA (-5.40%), ORLY (-5.40%), ADRU (-5.37%), RYAAY (-5.26%), IVZ (-5.18%), HYL (-5.15%), ENL (-5.01%).

7:26 AM
Weakness in the global financial system drives stocks lower at the open
As expected the averages opened sharply lower. The weakness in the global financial system is being attributed to the weakness. European banks are sharply lower as the Royal Bank of Scotland (RBS) said they would have additional multi-billion dollar losses. The announcement came on the heels of last week’s multi-billion dollar losses from Citigroup (C) and the Bank of America (BAC). The markets may have a chance to rebound given the optimism surrounding the presidential inauguration of Barack Obama

7:29 AM

-->The market cannot find its footing with this type of weakness in financials and energy....

7:31 AM
Biggest losers on optiondragon's list is
stt pnc bac hbc wfc su jpm pva fst ubs lvs sti gs cnq

7:31 AM OMG look at the crowd in DC holy moley! Now thats how you mobilize and army.......

7:32 AM Biggest gainers on optiondragon's list is
fxp nbl rti vrtx gld aem genz coco

8:04 AM S&P Sector Watch: Safety gets a fractional bid
The only two sectors still on the plus side this morning after the first hour of trading are Consumer Staples (XLP) and Utilities (XLU). Both are fractional gainers. The trouble spot of the day remains Financials (XLF) off (-8.47%), Materials (XLB) down (-2.7%), Consumer Discretionary (XLY) off (-2.5%) and Industrials (XLI) shedding (-2.2%).
8:21 AM Bank of America sinks almost 20% after firms release negative notes
Several analysts issued pessimistic notes about Bank of America (BAC), after the bank on Friday reported weaker than expected results and announced that it was receiving more government aid. Friedman Billings lowered their target for Bank of America to $5 and maintains an Underperform rating on the stock. In a best-case scenario, Friedman Billings does not believe that the bank can be profitable before the second half of 2009. The firm contends that the bank's pro-forma tangible common equity of 2.6% is too low, and they reduced their 2009 operating EPS estimate for Bank of America to (40c) from $2.00. Meanwhile, noting that Bank of America interfaces with 50% of American consumers, Oppenheimer's Meredith Whitney wrote that Bank of America is as vulnerable to the drop in home prices and employment as any bank covered by the firm. Whitney also slashed her fiscal 2009 EPS estimate for the bank to 70c, reflecting deteriorating credit, the worsening economy, and additional preferred dividend payments. Whitney maintains her Perform rating on the shares. Stifel Nicolas downgraded the shares to Hold from Buy, citing uncertainty regarding government intervention, possible political pressures, and shareholder dilution, among other reasons. Bank of America's stock declined $1.40, or 19.50%, to $5.78 in mid-morning trading
8:34 AM Markets weaken but oil rises
The market averages have weakened during the past hour as concerns of a global banking crisis continue to weigh down the market. Each of the economic sectors in the S&P is in negative territory but the financial sector is down almost -10.0%. Crude oil prices, which had been lower in the early going, have reversed and are now higher by almost a dollar to $37.42 a barrel. The inaugural ceremonies are getting set to begin as the volume on the exchanges slows.
9:02 AM

-->European Markets Wrap-Up for Tuesday, January 20
European stocks declined on concern earnings will deteriorate due to the deepening economic slump...In the UK, the FTSE closed down -0.98% to 4,068.02. Elsewhere, the German DAX fell -1.77% to 4,239.85 and France's CAC decreased -2.15% to 2,925.28...MARKET NEWS: SAP (SAP) fell 2.3% after Capital magazine said the company will push back the timetable for hitting margin targets and will not give a 2009 sales forecast next week at its earnings press conference... BNP Paribas (BNPQY) fell 13% after Societe Generale said the bank may need to raise up to $10.4B... Lloyds (LYG) dropped 32% on concern the lender has too little capital. A spokesperson said the company has a "robust capital position" and that business is "satisfactory"... Metro AG, Germany's largest retailer, rose as much as 9.8% on news it will cut 15,000 jobs as part of a plan to increase profit by $2B over four years... Royal Bank of Scotland (RBS) promised to make available $8.7B to UK borrowers. If the bank cannot work out its problems and they're pushed onto taxpayers, the government may take full ownership, according to the Wall Street Journal's "Heard on the Street"... National benchmark indexes decreased in all 18 western European markets.

9:03 AM U.S. Mid-Day Markets Wrap-Up for Tuesday, January 20
The markets retreated at the open today, and were lead lower by the financial sector, on the day that Barack Obama was inaugurated as the 44th U.S. president, inheriting the worst economic crisis in three-quarters of a century. At mid-day, the Dow was down 165.03 to 8,116.19, the S&P was down 23.27 to 826.85, and the Nasdaq was down 48.48 to 1,480.85...MARKET NEWS: Royal Bank of Scotland (RBS) yesterday warned that it may post a $41.3B loss which would be the largest in U.K. history. Today, State Street Corp. (SST) plunged after unrealized bond losses nearly doubled. Wells Fargo & Co. (WFC) slid on an analyst’s view that it will cut its dividend. Polo Ralph Lauren Corp.(RL) was down after Goldman Sachs advised to sell the stock. Alcoa (AA) tumbled as aluminum prices continued to sink...MAJOR MOVERS: Among the most active stocks were Bank of America (BAC), Citigroup (C), J.P. Morgan Chase & Co. (JPM), Cisco Systems (CSCO) and Microsoft (MSFT).
9:05 AM

-->The true beauty of the American Process.........no bombs, no bloodshed...

9:33 AM Stocks lower as President Obama takes office
Stocks are lower after President Obama was sworn in as the 44th President of the United States. The volume and news flow have been light for the past hour as all eyes have been on the inauguration. The new president spoke about the many challenges in the country and said the economic crisis calls for "action, bold and swift." He also urged unity and a "new era of responsibility" in the U.S.

10:21 AM News flow has been quiet as has been all year.....very strange

10:25 AM QGRI gonna be down 50% here since its start about 2 flippin weeks....ughhhh not good......

10:27 AM rails weak...BNI near 52 week lows

10:52 AM Volume is light as stocks slump
Stocks remain lower and volume remains light. Each of the major indices is lower by more than -2.25%, with the Nasdaq down more than -3.80%. The weakness in the financials is the culprit. Declining stocks are ahead of advancing stocks by a 4:1 margin, and down volume is ahead of up volume by the same margin. Crude oil prices are higher by 3.30% after being lower earlier in the day. Gold prices are also higher and are up more than 2.75%.
11:20 AM
QGRI keeps going down about to break into the 500s....sheeesh....

11:27 AM

-->What concerns me is the ripple effect of all this i mean yeah the market's dropping some parts dropping to new lows but it means Main street has further to go or will feel a longer effect....alot of my friends have been laid off or looking for a job...im just tired of it.....sad but today there was change and with change...hope.

11:42 AM

-->Markets fall to the lows of the day
The averages are at their lows of the session with the markets not showing any signs of buy interest. The first day of the Obama presidency is proving to be disappointing as many felt a patriotic rally could end up lifting the averages to a higher close. That may have to wait until tomorrow when the new president gets to work. There are no economic numbers to be reported tomorrow of any consequence but the earnings season will kick into full gear which will help to dictate the market moves.

11:43 AM

-->S&P 500-SPX: Breaking Support: November Low Ahead
There is support at the 814 area based on low areas from November and December of last year. Should this zone get taken out to the downside, there is only really the first November low at the 750 area as major support. A retest of those lows at this stage, especially given the weakness in financials, seems inevitable. Unless a major new positive fundamental or technical catalyst enters the picture we could be down to those lows any time in the next few days
11:49 AM Goldman: State Street issue more severe than Northern Trust, Bank of New York
Goldman believes State Street's (STT) issue of tangible common falling to 1% is more severe than Northern Trust (NTRS) and Bank of New York (BK). The firm has Buy ratings on all three banks, but prefers NTRS over the other two

State Street-STT volatility spikes to 165 on financial uncertainty
STT is recently down $18.35 to $18. STT reported Q4 EPS of 15c and lowered its financial outlook on capital deterioration. Goldman Sachs has a 12-month price target of $25 on STT. STT call option volume of 60,164 contracts compares to put volume of 29,016 contracts. February option implied volatility of 165 is above a level of 88 from last week and above its 26-week average of 73, according to Track Data, suggesting larger price movement
12:05 PM Buyer's strike no support...SKF is what you want to watch as well at QGRI.

12:26 PM
PNC, STT and SKF flying...Cramer could be right....SKF pushing all down in unison!
For COP I know alot about. I like it but right now you don't want to buy anything and wait for the dust to settle here. You want to make sure you pair COP with XLE and make sure XLE bottoms before buying COP. Right now the financials are taking a huge beating and this is not good for energy since XLF is making new lows and gauges the financial ... Read Morestrength of the economy. Energy will follow lower since economic activity is the lynch pin for oil prices, and energy demand. Lower economic activity and lower equity exposure means lower prices for all equities....thats what im seeing right now....this is not good as a leading economic indicator and could spell further trouble for the economy and the markets BUT on the opposite hand the energy sector or the XLE should be one of the first spots to buy in when this market turns and finds a bottom. Oil prices is a leading economic indicator right now and I want to see oil prices go UP and go towards and above $50.

I want to see Oil prices higher and stabilize for showing of possible resurrection in oil demand and thus a resurrection in economic activity...until we see oil prices stabilize (USO) and finaicials stabilize I would say to saty out of equities for now.....
12:28 PM
VIX implied volatility at 200 that is astronomically high ....not good.

12:34 PM Frosty, you feel me.....yes the Great American Process of change when leadership falters.....our fellow friends from other countries know about it (France, England, so on and so forth) but our brethern from other parts don't and should one day...China, Russia, N. Korea, Burma, Iran...it is a dream but a dream that is destined to be as nothing lasts forever...

1:05 PM

-->State Street-STT ratings lowered by Standard & Poor's
Standard & Poor's lowered its ratings on State Street and subsidiaries one notch, including lowering the counterparty credit rating on State Street Corp. to 'A+/A-1' from 'AA-/A-1+'. The outlook is negative.

1:05 PM

-->Companies reporting Before Market Open on Wednesday, January 21
The more notable companies reporting tomorrow before the market open include Abbott (ABT), Air Products and Chemicals (ADP), Allegheny Technologies (ATI), Coach (COH), Hudson City Bancorp (HCBK), Northern Trust (NTRS), The Progressive Corporation (PGR), U.S. Bancorp (USB) and United Technologies (UTX)

1:05 PM

-->Nasdaq 100 Index-NDX: Taking out 1142 on the Downside
The 1142 area was the very short-term double bottom level last Thursday. This support has now been broken to the downside. The index is at a new 20-session low. Next support is at the 1132 area. This was the high area on December 2nd 2008
1:06 PM WSJ: Google to stop offering print ads-Dow Jones
Google's (GOOG) print ads program was launched in 2006, the company said the print ads program did not create the desired impact.

To "Feel" the Game, to find your trade and style. To get out of the way. To be in the Zone.

OptionDragon — Mon, 19 Jan 2009 21:30:00 GMT

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Once you have achieved the higher levels. You are the biggest obstacle in the way of success to finding the right trade, follow your rules and to seek the zone. At the highest levels of trading, sports or any other performance : fear, greed, and anger is your greatest enemies. Let it not be in your way, if it is, then you must deal with it on a personal level. Don't over think it. Ultimately, trading is an individual journey of accomplishments and failures. Try to seek your authentic swing, my friend. I am planning to post most of my market comments and economic data reviews of the market day as a recap article at the end of the day when I can. My day job is taking up a great majorty of my time now so please be patient as it will be intermittent sometimes. This post is for Bagger Vance one of our Guru Traders as the movie reminds me of his advice and help over the past year for others. I will also post other articles with different subject matter as I feel the artistic need and find newsworthy items to write about. Take it easy!

Ode To One of the Greatest of the Greatest Generation.

OptionDragon — Sat, 06 Dec 2008 00:26:00 GMT

Posted By optiondragon

Bernard Baruch- Considered one of the greatest traders of all time, was one of the greatest of the Greatest Generation. Was on the Nazi hit list and was instrumental in turning America into an economic powerhouse in WWII. Known as the Architech, he was instrumental in winning both World Wars. Here he sits on his park bench in DC near his office, he was known to discuss world matters and everyday life with passerbys and hold his meetings here. This bench is now a national momument. Baruch was one of the top advisors to two presidents and during both World Wars.
One of his best stories:
Baruch’s faith helped him make his fortune. During his Wall Street days, Baruch sold short, to the limit of his resources, a stock he believed to be overvalued. He expected a quick profit on the next business day, believing the directors would not declare the regular dividend since the company could not afford it. He knew, however, that if the directors bluffed and declared a dividend, the stock could rise, and he would have to cover instantly or lose everything. The day before the dividend declaration day, his mother reminded him that the next day was the Jewish high holiday Yom Kippur, and he had promised to maintain the solemnity of the annual occasion and “keep” the holiday holy. Keeping his promise, Baruch ignored the multiple phone calls and telegrams from his friends who urged him to take his profit and cover. After Yom Kippur had passed, he read the telegrams and learned that, indeed, the dividend had passed. Rather than rising on the news, however, the stock had fallen precipitiously. In the hours he had chatted with his mother, keeping his promise, he had become a millionaire.

You can read more about him on wikipedia and about his trading skills in, “Lessons from the Greatest Stock Traders of All Time” By John Boik.

Premarket Analysis for 11/21 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Fri, 21 Nov 2008 14:11:00 GMT

Posted By Optiondragon for myhappytrading.com

From Breifing.com

Periodicals Wrap-Up for Friday, November 21st
WALL STREET JOURNAL: The Wall Street Journal reported that as Citigroup’s (C) stock price continues to decline top executive at the bank are at an early stage of considering selling off its parts or selling the company outright. Its board will meet today to review their options…NEW YORK TIMES: While the Wall Street Journal reported that Citigroup is considering selling itself, two inside sources told the New York Times that executives are not actively seeking to sell or split the company. Meanwhile. Citigroup’s management team believes that the conglomerate has managed to reduce the size of the company and control its costs under CEO Vikram Pandit, even as investors’ doubts about Citigroup mount…BUSINESSWEEK: BusinessWeek reported that the huge sell-off in the DJIA is causing some strategists to figure that the market has already priced in a recession. While volatility is likely to continue, history suggests additional significant downside is unlikely. William Rutherford, president of Rutherford Investment Management says, stocks in the infrastructure group will benefit not only from signs of an economic upturn but also from an “infrastructure buildup” that President-elect Barack Obama is expected to pursue. Rutherford favors Caterpillar (CAT), Terex (TEX) and Manitowoc (MTW)…BLOOMBERG: Funding for biotech companies has been cut to the lowest level in ten years as a result of the global economic slowdown, Bloomberg reported. The funding reductions have curtailed the funding of new drugs and caused biotech companies to go bankrupt…

Asian Markets Wrap-Up for Friday, November 21
For the first time this week Asian stocks were up as speculation increased that governments will take more action to help slumping economies…JAPAN: The Nikkei 225 rose 207.75, or 2.7%, to 7,910.79, while the broader Topix index added 20.41, or 2.6%, to 802.69. Mitsui Fudosan jumped 11% to Y1,191. Sumitomo Realty & Development Co. was also up 11% to Y1,154. Seiko Epson Corp. increased 7.8% to Y1,323. Sumitomo Mitsui climbed 8.4% to Y305,000. Mizuho Financial Group (MFG) surged 14% to Y277,000…CHINA: The benchmark CSI 300 slipped 11.69, or 0.6%, to 1,920.73. China Vanke Co. was up 4.4% to 6.92 yuan. Poly Real Estate Group Co. rose 6.5% to 17.97.Jiangxi Copper (JIXAY) lost 2.5% to 11.11 yuan. Yunnan Copper Industry Co. fell 3.9% to 8.94 yuan. Haitong tumbled 10% to 11.98 yuan. China Cosco Holdings Co. lost 0.33 yuan, or 3.7%, to 8.66…AUSTRALIA: The S&P/ASX 200 index advanced 1.9% to 3,416.50. BHP Billiton (BHP) increased 3.8%. Commonwealth Bank of Australia increased 5.6%. Woodside Petroleum (WOPEY) retreated 5.4% to A$29. Fortescue Metals Group soared 40% to A$1.80. Newcrest Mining (NCMGY) jumped 13% to A$21.46. Babcock & Brown Infrastructure Group dropped 0.6 cent, or 18%, to 2.8 cents. Sims Group (SMS) fell 70 cents, or 5.7%, to A$11.50…AROUND ASIA: In Hong Kong, the Hang Seng index advanced 360.64, or 2.93%, to 12,659.20. Bank of East Asia (BKEAY) was up 4.9% to HK$14.58. HSBC Holdings (HBC) added 1.9% to HK$77.05. China Construction Bank Corp. gained 6.1% to HK$3.81.

U.S. equities continue to point to a higher open
Stocks continue to point to a higher open. The averages are taking their lead from the overseas markets which are trading higher. The strength is being attributed to a report that Citigroup (C) may put itself up for sale. The company has been unable to post a profit in recent quarters unlike rivals J.P. Morgan Chase (JPM) and Bank of America (BAC). The price of Citigroup shares has been pummeled and investors remain concerned about he debt that continues to swamp the bank.

Analysts Initiation Summary for Friday, November 21st
MOST NOTEWORTHY: Google (GOOG), Cadence Pharmaceuticals (CADX) and Cisco (CSCO) were today’s noteworthy initiations: Google was initiated at Merriman with Sell rating. Merriman’s checks indicate the decline in consumer and business purchasing is having a dampening effect on search engine marketing. The firm sees downside risk to consensus estimates and recommends waiting for a better entry point. The firm thinks shares could reach $200 to $240 in the near-term. Oppenheimer believes Cadence Pharmaceuticals is sufficiently capitalized to reach FDA approval of Acetavance and Omigard. Shares were initiated with an Outperform rating and $10 target. William Blair believes Cisco must evolve from selling pure infrastructure hardware to providing platforms with higher value and intelligence. The firm started shares with a Market Perform rating…OTHER INITIATIONS: Wilmington Trust (WL) and Boston Private (BPFH) were initiated with Equal Weight ratings at Morgan Stanley. EMC Corp (EMC) was assumed at ThinkPanmure with an Accumulate rating and $12 target. John Bean Technologies (JBT) was started with a Buy rating at Janney Montgomery.

Analysts Downgrade Summary for Friday, November 21st
MOST NOTEWORTHY: Autodesk (ADSK), Goodrich (GR) and VMware (VMW) were today’s noteworthy downgrades: Baird downgraded Autodesk to Neutral from Outperform and lowered its target to $20 from $31 following the company’s weak Q4 guidance. Shares were also downgraded to Underperofrm from Buy at Merrill Lynch. Friedman Billings downgraded shares of Goodrich to Market Perform from Outperform as they do not expect a turnaround in the commercial aerospace stocks in the near term. The firm lowered their target to $46 from $83. UBS cut VMware to Sell from Neutral and lowered its target to $15 from $21 following checks that indicate that consensus license growth expectations are too aggressive for Q4 and FY09…OTHER DOWNGRADES: Sunpower (SPWRA) was lowered to Underperform from Neutral at Merrill Lynch. Gen-Probe (GPRO) was downgraded at Morgan Stanley to Equal Weight from Overweight. Goldman removed Emulex (ELX) from its Conviction Buy List.

Analysts Upgrade Summary for Friday, November 21st
MOST NOTEWORTHY: Microsoft (MSFT), Gap (GPS) and Healthcare Services (HCSG) were today’s noteworthy upgrades: Oppenheimer upgraded shares of Microsoft to Outperform from Perform on valuation as they see a trading opportunity following the recent sell-off. The firm established a $22 target on shares. Citigroup upgraded Gap to Buy from Hold on its “solid” Q3 results and greater visibility. The firm lowered their target to $12 from $14. William Blair upgraded shares of Healthcare Services to Outperform from Market Perform to reflect the company’s strong financial position and stable business outlook…OTHER UPGRADES: ARM Holdings (ARMHY) was upgraded to Buy from Neutral and added to the Conviction Buy List. Hewlett-Packard (HPQ) was also added to the Conviction Buy List. Intuit (INTU) was raised to Buy from Sell at UBS. Cyberonics (CYBX) was lifted to Buy from Neutral at Piper Jaffray.

Jim Cramer’s “Mad Money”
Cramer said that the systemic risks to the market have once again put the possibility of another Great Depression back on the table. “We are not done going down,” he said. Cramer unveiled his “tough love” plan for taking the risk out of the markets and restoring confidence in the U.S. economy. He called on President-elect Barack Obama not to wait until January to take action. Here’s his eight-point plan: (1) Obama needs to announce that the federal government will not allow any more big financial institutions to fail; (2) we need to ensure the the safety of all life insurance and annuities; (3) the government must stem house price depreciation by issuing tax credits for home purchases and by reinstalling the TARP plan with changes that don’t penalize the banks for taking aid; (4) the government must insure the bonds of both Fannie Mae (FNM) and Freddie Mac (FRE); (5) government must step in to buy up and stabilize some of the collateralized debt obligations, or CDOs, to stabilize that market; (6) the government must provide financing for any auto company that files for bankruptcy and provide no relief for those that don’t; (7) a trillion-dollar infrastructure program in the U.S. is needed to rebuild the country and create thousands of new jobs; and (8) the U.S. must get China and Europe to cut interest rates to 2% to head off a worldwide slowdown. Next, Cramer welcomed Andrew Littlefair, pres/CEO of Clean Energy Fuels (CLNE), to discuss the state of natural gas as an alternative fuel in a world with $50-a-barrel oil. Littlefair said the natural gas model works long term and said oil will be heading higher again. Littlefair told Cramer that CLNE does not burn any cash for operations, and only uses its reserves for capital expenditures associated with building new fueling stations. Cramer is still a backer of Clean Energy and that when oil starts to rise again, CLNE should well positioned to prosper. SELL BLOCK: while Cramer’s a fan of high yielding, energy-oriented master limited partnerships (MLPs), he sees declines in many of them as opportunities and warned of pitfalls to watch out for. At risk MLPs as oil prices plummet are: Williams Pipeline (WMZ), Atlas Pipeline (APL) and DCP Midstream (DPM). These three, need oil around $75 a barrel to make money. With oil at $49 a barrel, he fears the companies’ dividends are at risk. Cramer cited Crosstex Energy (XTEX) as an example of what can happen when an MLP cuts its dividend. Cramer said he made a mistake recommending Atlas Energy Resources (ATN), but stands behind his other favorite energy play, Kinder Morgan (KMP). LIGHTNING ROUND: (Bullish) TEVA; AA; FLO; FDO. (Bearish) FAST; FMC; FCX; ATVI.

Fast Money position recap- Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Karabell Owns (AAPL), (C), (CSCO), (GOOG), (JPM), (UYG); Najarian Owns (AXP) Put Spread; Najarian Owns (C) Puts; Najarian Owns (CVX) Put Spread; Najarian Owns (IYR) Puts; Najarian Owns (IYR) Puts; Najarian Owns (SCHW) And Is Short (SCHW) Calls; Macke Owns (SDS), (MSFT), (WMT), (UUP); Macke Is Short (YHOO)

Premarket Analysis for 11/20 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Thu, 20 Nov 2008 14:26:00 GMT

Posted By optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Thursday, November 20th
WALL STREET JOURNAL: General Growth Properties (GGP), weighed down by $27B of debt, hired law firm Sidley Austin to be its bankruptcy counsel,the Wall Street Journal reported. While a Chapter 11 filing is not imminent the move is seen as defensive…BARRON’S: Barron’s Online conducted a screen of over 1,000 companies with more than $250 million in cash and equivalents, and came up with a list of five trading at less than two times the net cash on their balance sheets. Cash-rich stocks for tough times: Ashland (ASH), Chico’s FAS (CHS), Exar (EXAR), Form Factor (FORM), Sycamore Networks (SCMR). In selecting these five stocks, Barron’s Online measured the market cap of the companies against their net cash position. All of the stocks they picked had the virtue of keeping costs under control and maintaining little or no debt, both virtues in times of slowing growth and tight capital markets. And all the stocks are down between 30% and 90% in the last 12 months, meaning they’ve already taken a hit for the declining state of their business…NEW YORK TIMES: The New York Times reported that, according to nuclear experts, Iran has now produced nearly enough nuclear material to make a single atom bomb. The experts cautioned that Iran would have to take additional steps to make a bomb, however, including breaching its international agreements and additional purification to put it into a warhead design, which experts are unsure Iran has achieved…The New York Times also reported that Rick Wagoner, Alan Mulally and Robert Nardelli, the CEOs of General Motors (GM), Ford (F) and Chrysler, respectively, left Washington empty-handed after public hearings and negotiations for a financial lifeline appeared to come to naught…

Asian Markets Wrap-Up for Thursday, November 20
Asian stocks declined, after Japan reported that its exports fell sharply. JAPAN: The Nikkei 225 sank 6.89%, to 7,703.04, with insurers and exporters leading the decline. Insurer Tokio Marine (TKOMY) tumbled 15% after it reduced its earnings forecast. T & D Holdings, a life insurance company, also slashed its earnings outlook and the shares dove 14%. Isuzu (ISUZY) retreated 17% and Mazda (MZDAF) decreased 10%. Nintendo (NTDOY) lost 7.9% and Nippon Electric Glass Co., which makes glass for flat panel TVs, dropped 14%. CHINA: The CSI 300 Index declined 1.1% to 1,932.43, led by energy companies. Coal mining company Shenhua Energy (CSUAY) lost 3.9% and China Coal Energy (CCOZF) dropped 3.2%. PetroChina (PTR), an oil company, fell 2.7%. Developers rallied, on a report that Disney’s (DIS) plan to build a theme park in Shanghai would stimulate the city’s economy. Lujiazui (SLUJF) and Waigaoqiao, two property developers in the area, both jumped by the daily limit of 10%. AROUND ASIA: South Korea’s KRX 100 dipped 6.52%, while Taiwan’s Taiex slumped 4.53% and Indonesia’s Jakarta Composite slipped 2.15%…Japan’s exports dropped 7.7% in October, compared with October 2007.

Iran has enough nuclear fuel for one atomic bomb, experts say-NY Times
Iran has enough nuclear fuel to manufacture a single atom bomb, according to experts who analyzed a recent report about Iran’s energy program by the International Atomic Energy Agency. However, the experts added that Iran would have to purify the fuel further and put it into a warhead before creating a nuclear weapon. Western officials are unsure if the Islamic Republic has those capabilities.

U.S. consumers batten down the hatches-WSJ
Momentum for a fiscal stimulus program is gaining, according to the Wall Street Journal’s “Heard on the Street”. As the CPI falls a key component is the core index, affecting shopping for clothes, leisure expenses, and vehicles. And, the U.S. consumer, 70% of the domestic economy, is holding spending to their regular income, as borrowing falls at a pace last seen in the early 1990s. What will bring back shoppers? It may be fiscal stimulus programs.

U.S. equity futures again point to a lower opening
Stock futures are pointing to a lower open after another late day sell off yesterday. Fears of recession and the Big Three auto executives testifying on Capitol Hill for a bailout package unnerved investors. Global markets, following the U.S. lead, were lower overnight. Crude oil is now below $53 on the slowing global economy. One bright spot is the vote of confidence of Saudi Prince Alwaleed who announced he would increase his stake in Citigroup to 5% from just below 4%.

RIM’s BlackBerry Storm competes with Apple, Google-WSJ
The Wall Street Journal’s Walter S. Mossberg reviews Rim’s (RIMM) new BlackBerry Storm and concludes that it’s “a very capable handheld computer that will appeal to BlackBerry users who have been pining for a touch-controlled device with a larger screen. And it offers yet another good option for anyone who is looking to buy one of the new, more powerful, pocket computers.”

U.S. equity futures still point to a lower open
Stock futures turned slightly higher after the announcement that Prince Alwaleed of Saudi Arabia would increase his stake in Citigroup (C) to 5%, but then fell back again. There also was news from Europe that the Swiss central bank cut its interest rates by a full point. That erased most of the declines in the European indices and helped shore up the U.S. futures market. Investors received jobless data which showed that initial jobless claims were 542,000 versus an expected report of 505,000 claims.

Analysts Upgrade Summary for Thursday, November 20th
MOST NOTEWORTHY: BASF AG (BASFY), Hot Topic (HOTT) and L-1 Identity (ID) were today’s noteworthy upgrades: Societe General upgraded BASF AG to Buy from Hold. The firm believes the bad news is out and that BASF has a strong market position. Pali Capital upgraded Hot Topic to Buy from Neutral based on the ongoing merchandise catalyst, the opportunity to reclaim the mainstream kid and closing underperforming stores, which create the most favorable conditions in the last 5+ years. Stanford upgraded L-1 Identity to Buy from Hold on valuation, and the firm sees little risk to the company from the Obama Administration…OTHER UPGRADES: Gymboree (GYMB) and Windstream (WIN) were raised to Overweight from Neutral at JP Morgan. Doral Financial (DRL) was upgraded at B. Riley to Buy from Neutral. Alumina (AWC) was upgraded to Buy from Neutral at UBS.

Analysts Downgrade Summary for Thursday, November 20th
MOST NOTEWORTHY: Targanta (TARG), BASF AG (BASFY) and Amedisys (AMED) were today’s noteworthy downgrades: Credit Suisse downgraded Targanta to Underperform from Outperform following the FDA Panel’s rejection of Oritavancin. Citigroup downgraded BASF AG to Sell from Hold and sees no reason to own the stock following the company’s profit warning. Shares were also downgraded at WestLB to Hold from Add. Deutsche Bank downgraded shares of Amedisys to Hold from Buy and lowered its target to $53 from $75 on concerns over the company’s deteriorating A/R aging trends…OTHER DOWNGRADES: VeriFone Holdings (PAY) and Navios Maritime (NMM) were lowered to Neutral from Overweight at JP Morgan. NTT DoCoMo (DCM) was downgraded at Citigroup to Hold from Buy.

Analysts Initiation Summary for Thursday, November 20th
MOST NOTEWORTHY: Cepheid (CPHD), Gen-Probe (GPRO) and Harbin Electric (HRBN) were today’s noteworthy initiations: Needham expects shares of Cepheid to be driven by continued market penetration in the hospital acquired infection market, new test introductions, GeneXpert Infinity sales, and molecular diagnostics growth from sales outside of traditional molecular testing areas. Shares were initiated with a Buy rating and $21 target. Needham also initiated Gen-Probe with a Hold rating and expects market share gains for the company when PANTHER is approved in 2010/2011. William Blair believes Harbin Electric is an “interesting” opportunity for exposure to rapid growth in infrastructure within the People’s Republic of China. The firm started shares with a Market Perform rating…OTHER INITIATIONS: Boston Scientific (BSX) was initiated with a Buy rating and $11 target at UBS. NutriSystem (NTRI) was initiated with a Neutral rating at Janney Montgomery. Ener1 (HEV) was assumed at JMP Securities with an Outperform rating and $9 target.

Jim Cramer’s “Mad Money”
Cramer told “Mad Money” viewers Wednesday night that every day the possibility of the next Great Depression is on the line and investors need to start taking notice. Cramer said, “This market is in critical condition,” he said, “and the solution is to save as many patients as you can.” Cramer said the two main “patients” in this market are the banks and the automakers, and both need help right away. Cramer said, that while the Treasury and Federal Reserve, are willing to save the banks, they are much more reluctant to save the automakers. Cramer said, that if the government lets the automakers fail, it will signal a death blow to the markets and the economy. Then, Cramer said there’s only one tech stock investors should trust, and it’s Hewlett-Packard (HPQ). With companies like Cisco (CSCO), Corning (GLW) and Nokia (NOK) all reporting disappointing numbers and offering slowing sales forecasts, Cramer said there must be a reason HP is bucking buck the trend, and he’s found three of them. First, HP has great management, and is aggressively cutting costs and taking market share. Second, it is reaping the synergies from its acquisition of EDS. Thirdly, HP’s competitors are falling apart at the seams - with Dell (DELL) continuing to struggle under a poor long-term growth plan and other issues. Cramer called HP one of the safest and most defensive names in tech today. OUTRAGE OF THE DAY: Cramer again took aim at AIG (AIG). He said it’s time for a big investigation to find out where the billions of dollars invested in the company actually went. MAD MAIL: Shaw Group (SGR) Cramer said he’s not concerned with the debt obligations and still recommends the company. Cramer is still recommending Terra Nitrogen (TNH) and Archer Daniels Midland (ADM) over fertilizer company Potash (POT). LIGHTNING ROUND: (Bullish) SLW; BP; CVX; MRO; KMP; ETP; NUE. (Bearish) CLR; VLO; SPH; KDN; LTD; AKS.

Fast Money position recap- Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (SDS), (UUP), (DIS), (MCD), (WMT), (MSFT); Macke Is Short (YHOO), (TM); Najarian Owns (IYR) Puts; Najarian Owns (MER) Put Spread; Najarian Owns (CVX) Put Spread; Finerman’s Firm Owns (OIH) Puts; Finerman’s Firm Owns (MSFT), (SUN); Finerman’s Firm Is Short (USO), (IYR), (IJR), (MDY), (SPY), (IWM), (RTH), (BBT), (VNO), (COF).

Premarket Analysis for 11/19 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Wed, 19 Nov 2008 14:32:00 GMT

Posted By optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Wednesday, November 19th
WALL STREET JOURNAL: According to people familiar with the matter, the Wall Street Journal reported that Boeing (BA) is in the process of recovering from a strike by its machinists and will delay by as much as 10 weeks the original delivery date for all 3,734 jetliners in its order backlog…The Wall Street Journal reported that the Department of Justice, in combination with a government safety warning, is probing the off-label use of a Medtronic (MDT) implant for promoting bone growth. Medtronic CEO William A. Hawkins called the probe a “perfect storm” that suppressed sales of Infuse Bone Graft…FINANCIAL TIMES: After losing 53% of its value last month, the Financial Times reported that Citigroup (C) will liquidate its Corporate Special Opportunities hedge fund…DETROIT NEWS: According to an advance copy of his remarks, the Detroit News reported that Chrysler LLC CEO Robert Nardelli will tell U.S. lawmakers that without assistance, it could run short of operating cash. He added that if pushed into bankruptcy, “we cannot be confident that we will be able to successfully emerge from bankruptcy.”…

Asian Markets Wrap-Up for Wednesday, November 19
Asian stocks continued their decline this week, led down by the financial sector and commodity companies…JAPAN: The Nikkei 225 Stock Average was down 55.19, or 0.7%, to 8,273.22, while the broader Topix index fell 8.01, or 1%, to 827.43. Mitsubishi UFJ (MTU) slid 6.4% to Y511. Mizuho Financial Group (MFG) sank 7.5% to Y212,500. Sumitomo Mitsui Financial Group tumbled 7.9% to Y314,000. Aiful slumped 10% to Y290. Takefuji Corp. dived 9.9% to Y664. Mitsubishi fell 9.2% to Y1,118. Mitsui & Co. (MITSY) dropped 6.5% to Y773. Kansai Electric Power Co. gained 3.6% to Y2,560. Central Japan Railway Co. was up 2.9% to Y865,000…CHINA: The CSI 300 advanced 113.34, or 6.2%, to 1,953.16. Tianjin FAW Xiali Automobile Co. jumped 9.9% to 3.33 yuan. China Cosco Holdings added 5.2% to 9.37 yuan. Shanghai Zhenhua Port Machinery Co. was up 2.7% to 8.33 yuan. SAIC Motor Co. gained 7% to 6.13 yuan. Dongfeng Automobile Co. advanced 7.4% to 3.05 yuan. China Petroleum (SNP) rose 10% to 8.37 yuan. PetroChina Co. (PTR) climbed 7.5% to 11.91 yuan. Sinopec Shanghai Petrochemical Co. (SHI) was up 5% to 4.42 yuan. Citic Securities gained 6.4% to 20.17 yuan. Haitong Securities Co. increased 3.8% to 13.99 yuan…AUSTRALIA: The S&P/ASX 200 Index retreated 23.60, or 0.67%, to 3,499.60. Babcock plummeted 19% to 25 Australian cents. BHP Billiton (BHP) fell 4.1% to A$23.20. OZ Minerals dropped 14% to 63 Australian cents…AROUND ASIA: In Hong Kong, the Hang Seng Index lost 100.09, or 0.8%, to 12,815.80. Henderson Land (HLDCY) slid 5.4% to HK$23.85. Sun Hung Kai Properties (SUHJY) was down 3% to HK$53.35. Cnooc (CEO) lost 2.8% to HK$5.54. Li & Fung declined 5.1% to HK$13.10. China Unicom (CHU) gained 2% to HK$9.08…In South Korea, the Kospi Index sank 1.9% and has fallen 12% over the past seven days. KB Financial Group (KB) dived 4.2% to 28,850 won. Samsung C&T Corp. was down 4.4% to 37,000 won. DC Chemical Co. slumped 14% to 184,000 won.

Nardelli says Chrysler may not emerge from possible bankruptcy-Detroit News
According to an advance copy of his remarks, Chrysler LLC CEO Robert Nardelli will tell U.S. lawmakers that without assistance, it could run short of operating cash. He added that if pushed into bankruptcy, “we cannot be confident that we will be able to successfully emerge from bankruptcy.”

Emergency talks to deal with the crisis in the shipping industry planned-FT
The Financial Times reports that emergency talks will be held today to consider possible steps to address the shipping industry crisis, a crisis that has been triggered by a collapse in dry bulk freight rates. Potential proposals may include plans to simplify payments, similar to a move implemented to settle freight futures contracts. Many believe forced sales of vessels could push values down, while bankruptcies among shipowners that are unable to service debts assumed will also worsen conditions.

U.S. equity futures are continuing to point to a lower open
U.S. equity futures continue to point to a lower open. Investors received data on consumer prices and housing with the release of the consumer price index and the housing starts report. The CPI showed a decrease of -1.0% versus an expected decrease of -0.8%. If the volatile components of food and energy are removed from the equation the report showed a decrease of -.1% versus analysts expectations of an increase of 2.4%. The housing starts came in at 791,000 versus expectations of 780,000, and building permits were 708,000 versus expectations of 774,000.

Analysts Upgrade Summary for Wednesday, November 19th
MOST NOTEWORTHY: Pacific Sunwear (PSUN), Reliant Energy (RRI) and Cogent (COGT) were today’s noteworthy upgrades: UBS upgraded Pacific Sunwear to Neutral from Sell and said liquidity is no longer a near-term concern. The firm lowered PSUN’s target to $1.50 from $3. Citigroup upgraded shares to Hold from Sell on valuation following the recent weakness and believes Pacific Sunwear has sufficient liquidity to remain a going concern. Calyon believes Reliant Energy will be successful in unwinding the Merrill Lynch Retail credit sleeve and obtaining alternative collateral. The firm upgraded shares to Buy from Add. JP Morgan said Cogent’s position in homeland security and the defense markets make it less sensitive to an economic downturn, making valuation attractive. JP Morgan upgraded shares to Overweight from Neutral and raised its target to $13 from $10.50…OTHER UPGRADES: Goldman added Research in Motion (RIMM) to its Conviction Buy List and removed Riverbed (RVBD) from the Conviction Sell List. J.M. Smucker (SJM) was raised to Buy from Underperform at Merrill Lynch.

Analysts Downgrade Summary for Wednesday, November 19th
MOST NOTEWORTHY: Ace Ltd (ACE), HSBC Holdings (HBC) and Century Aluminum (CENX) were today’s noteworthy downgrades: Citigroup believes Ace Ltd’s Net Amount at Risk increase over the past nine months will limit near-term upside. The firm cut shares to Hold from Buy and lowered their target to $54 from $68. WestLB downgraded shares of HSBC Holdings to Sell from Reduce to reflect the deteriorating global economic outlook and the bank’s lower than average Tier 1 Capital ratio. JP Morgan downgraded Century Aluminum to Neutral from Overweight citing lower aluminum prices and high costs…OTHER DOWNGRADES: Goldman removed Cisco (CSCO) from the Conviction Buy List. Sunoco (SUN) was downgraded to Sell from Hold at Deutsche Bank. Arbitron (ARB) was lowered to Neutral from Overweight at JP Morgan.

Analysts Initiation Summary for Wednesday, November 19th
MOST NOTEWORTHY: Resmed (RMD), St. Jude Medical (STJ) and Tibco (TIBX) were today’s noteworthy initiations: Jefferies initiated Resmed with a Buy rating and $41 target and expects the company’s “strong” sales growth to continue. The firm feels Resmed is an attractive acquisition candidate. Jefferies believes St. Jude Medical’s growth expectations are ambitious and finds the stock fairly valued at current levels. Shares were initiated with a Hold rating and $34 target. Banc of America assumed coverage of Tibco with a Neutral rating and $6 target. The firm sees risk to the company’s Q4 results but believes it has a solid recurring revenue model…OTHER INITIATIONS: Ticketmaster (TKTM) was started at Thomas Weisel with a Market Weight rating and $9.25 target. Chemical Financial (CHFC) was initiated with a Market Perform rating and $25 target at Keefe Bruyette. Usec (USU) was reinitiated with a Neutral rating at Goldman.

Jim Cramer’s “Mad Money”
Tuesday’s 6pm pre-empted show aired later at 11 pm. — Cramer thinks a Yahoo! (YHOO) deal with Microsoft (MSFT) could actually happen now that Jerry Yang is not at the helm. Cramer removes Jerry Yang from his CEO “Wall of Shame” and adds Citigroup’s (C) Vikram Pandit in the slot due to his underperformance and destroying value at Citigroup. Shares of Citigroup went from $33.23 when he took the CEO position in December of 2007, and it now trades at $8.36, down 74.8%. Cramer says Pandit is in way over his head. He says, Pandit tells everyone that Citigroup is well capitalized, but the WSJ and others know it is highly leveraged, and investors remain worried about capital. Under Pandit, Citigroup slashed its dividend twice. Cramer says, “let’s hope Pandit pulls a Yang and quits.” When asked by a caller if Cramer would buy YHOO shares now that Yang has stepped down, he said he doesn’t believe in buying a company with declining fundamentals, even when they may be a buyout coming. Cramer talked about his “green plays” again and highlighted and infrastructure play, Quanta Services (PWR). Cramer said this a great play on wind power, and an Obama administration play. The shares have been annihilated in the last few weeks, despite reporting an upside surprise. Cramer said Quanta is a perfect example of a good company that was killed by hedge fund redemptions. He says Quanta’s stock is broken, but the company isn’t and it should prosper with Obama in the White House. Then, Cramer said that Exxon (XOM) has shown that oil has bottomed. Next, Cramer talked with Shaw Group’s (SGR) CEO Jim Bernhard. Cramer says Shaw is an infrastructure “green play”. Shaw is down 57% since Cramer last talked about the stock on April 16, 2007. Cramer says Shaw has 30 projects for 48 nuclear units and 1800 MW added to the U.S. Grid. Bernhard talked about Shaw’s order backlog for nuclear plants for next year: 6 units in the U.S. are booked, 4 in China, and India, Brazil, U.K. and So. Africa projects are all well underway. Bernhard said its non-nuclear business’ are doing well. Trading at $2 above cash value, Bernhard essentially said the shares are cheap. MAD MAIL: FWLT continues to like the stock as it is trading at/near cash value. LIGHTNING ROUND: CMI owned by hedge funds, great company but not the time to buy; PEG Cramer likes it, but prefers DUK with greater growth prospects; PHG a 6% yield, beneficiary of a strong dollar, its a Buy; BAC Cramer is puzzled, a he didn’t want to see the investment in China, one of his “fortress banks” and he is not backing away just yet; CREE too risky, likes HPQ instead; ISRG wrong stock for this environment, its a bull market stock, it doesn’t work here as not recession resistant; SYY problematic on the short-term, challenged business in this economy, great company but stock can’t move due to the poor restaurant environment.

Fast Money position recap- Macke Owns (DIS), (WMT), (MSFT), (UUP); Macke Is Short (YHOO), (TM); Najarian Owns (IYR) Put Spread; Najarian Owns (TSO) Call Spread; Seymour Owns (AAPL), (BAC), (F), (TSO); Finerman’s Firm Owns (MSFT), (VLO); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (RTH), (USO)

Premarket Analysis for 11/18 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Tue, 18 Nov 2008 14:30:00 GMT

Posted by Optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Tuesday, November 18th
WALL STREET JOURNAL: Insurers bludgeoned by losses in their investment portfolios are maneuvering to remake themselves as savings and loan holding companies thereby qualifying for bailout loans from the government’s TARP program, the Wall Street Journal reported. Some deals in the works include Lincoln National Corp.’s (LNC) agreeing to buy a small savings-and-loan in Goodland, IN; Genworth Financial (GNW) buying a thrift in Maple Grove, MN; and Hartford Financial Services (HIG) purchasing Federal Trust Corp. of Sanford, FL…According to the Wall Street Journal, investors are still worried about Citigroup’s (C) capital, even after the bank announced plans to cut 50K employees. CEO Vikram Pandit told employees that the bank’s capital base is strong, and while job cuts will reduce Citigroup’s cost base, the bank’s balance sheet is still highly leveraged…BLOOMBERG: Bloomberg reported that BlackRock (BLK) will cut jobs for the first time in its 20-year history. The largest publicly-traded asset manager in the U.S. is feeling the effects from the slumping financial markets…Bloomberg also reported that Goldman Sachs (GS), Morgan Stanley (MS) and European investment banks are pushing exchange fees lower using the early success of new trading platforms they have backed…

Asian Markets Wrap-up for Tuesday, November 18
Stocks fell in a majority of Asian countries, with financial and technology companies spearheading the declines. JAPAN: The Nikkei 225 Stock Average sank 2.28%, to 8,328.41. Real estate companies led stocks downward, with developer Mitsubishi Estate dropping 8.3% and Mitsui Fudosan (MTSFF), another developer, losing 5.9%. Insurance companies also fell, after Sony Financial Holdings reported that its 1H08 earnings dropped more than 25%. Sony Financial declined 9.2%, while Sompo Japan Insurance (SJIIF) slid 8.9% and another insurer, Tokio Marine Holdings (TKOMY), slumped 8.8%. Companies that utilize oil to make their products advanced, with Oji Paper Co. (OJIPY) jumping 6.9% and Sumitomo Rubber Industries (SMTUF) advancing 4.2%. CHINA: The CSI 300 Index plummeted 7.42% to 1,839.82 on concerns about economic growth. Commodities companies led the decline. Baoshan Iron & Steel Co., Aluminum Corp. of China (ACH), Jiangxi Copper Co., and Zijin Mining (ZIJMF) all sank by the daily limit of 10%. Pudong Bank, Ping An Insurance (PNGAY), and China Shipping (CITAY) also dropped 10%. China Eastern Airlines (CEA) surged 10% after saying that it was completing an application for government aid. AROUND ASIA: South Korea’s KRX 100 declined 4.08%, while Indonesia’s Jakarta Composite lost 3.81% and Taiwan’s Taiex fell 3.03%… Hong Kong’s unemployment rate rose to 3.5% as of the end of October, versus 3.4% at the end of September.

Fed official says economy deteriorating faster than expected-PBS
In an exclusive interview with The Nightly Business Report, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City said that the recession is more severe than anticipated and the U.S. economy is deteriorating faster than expected. However, he says that it isn’t yet the worst recession in the postwar period and “it doesn’t have to be”. Hoenig comments that the Fed “had done about as much as it can do,” and that the government’s financial rescue plan is still evolving, which causes confusion. He believes there is still a “struggle” ahead with the housing markets.

Baidu dealing with major setbacks-WSJ
The Wall Street Journal reports that Baidu.com (BIDU) has had a run-in with the CCTV since the company allowed unlicensed medical companies win keyword auctions while sidelining government licensed drug sellers. Furthermore, users of the site are having a hard time determining if links are paid-for ads or genuinely result based. Baidu.com could lose millions in revenue and a big blow to its credibility.

U.S. equity futures continue to point to a lower open
Stock futures continue to point to a lower open but they’re off their worst levels of the morning, and ahead of the automakers testimony before the Senate Banking Committee. The big three automakers and representatives of the UAW will request funds for an industry bailout. Investors received positive news from Hewlett-Packard (HPQ) which said earnings will be better than forecast. Investors also received data on producer prices which showed that prices fell -2.8% versus an expected drop of -1.9%. If the volatile components of food and energy are removed from the number it came in at an increase of 0.4% versus an expected increase of 0.1%.

Analysts Upgrade Summary for Tuesday, November 18th
MOST NOTEWORTHY: Aaron Rents (RNT), MedCath (MDTH) and AeroVironment (AVAV) were today’s noteworthy upgrades: Cowen upgraded Aaron Rents to Outperform from Neutral and believes the company’s business model is gaining momentum despite the difficult environment. The firm views valuation as attractive. Citigroup upgraded shares of MedCath to Hold from Sell on valuation following the recent sell-off. The company’s target was lowered to $9 from $19. Stanford upgraded AeroVironment to Buy from Hold based on valuation and because they believe its visibility over the next year has improved…OTHER UPGRADES: Chiquita Brands (CQB) was lifted to Buy from Hold at BB&T. Chico’s FAS (CHS) was upgraded to Neutral from Sell at UBS. FCStone (FCSX) was raised to Strong Buy from Outperform at Raymond James.

Analysts Downgrade Summary for Tuesday, November 18th
MOST NOTEWORTHY: Southern Peru (PCU), Albermarle (ALB) and Clearwire (CLWR) were today’s noteworthy downgrades: Morgan Stanley downgraded Southern Peru to Underweight from Equal Weight citing lower molybdenum prices and higher operating costs. Oppenheimer believes Albermarle’s end markets could remain under pressure into 2009. Shares were downgraded to Underperform from Perform. RBC Capital downgraded Clearwire to Sector Perform from Outperform based on reduced valuation parameters and lack of catalysts. The company’s target was lowered to $9 from $15…OTHER DOWNGRADES: Kellogg (K) and Coca-Cola (KO) were cut to Neutral from Buy at UBS. Evergreen Solar (ESLR) was downgraded at JP Morgan to Underweight from Neutral. Deutsche Telekom (DT) was downgraded to Neutral from Buy at Goldman and to Hold from Buy at Deutsche Bank.

Analysts Initiation Summary for Tuesday, November 18th
MOST NOTEWORTHY: New Oriental Education (EDU), China Green (CGAG) and Nabors Industries (NBR) were today’s noteworthy initiations: Baird initiated New Oriental Education with a Neutral rating and $64 target citing concerns of high 2Q09 expectations and the economic slowdown. Roth Capital believes China Green is well positioned for strong top and bottom line growth given expansion of manufacturing capacity and R&D facility, market share gains, new product development, and increased demand for organic fertilizer. Shares were started with a Buy rating and $5 target Jesup & Lamont assumed coverage of Nabors Industries with a Hold rating. The firm cited near-term uncertainty in the commodity market and demand destruction…OTHER INITIATIONS: First Solar (FSLR) was initiated at JP Morgan with an Overweight rating. Schnitzer Steel (SCHN) and Commercial Metals (CMC) were initiated with Equal Weight ratings at Morgan Stanley.

The case for a bankruptcy reorganization for automakers-BusinessWeek
Writing in BusinessWeek, Jack Welch, former GE (GE) CEO and his wife Suzy, argue that the automakers, specifically GM (GM) and Chrysler, go into bankruptcy to better reorganize themselves and then merge. It is, they say, the most “viable future for the industry.” A government bailout, or life support solution, won’t help to keep the industry alive.

Pre-Market Top 5 Losers for November 18 2008
The following stocks were the top percentage losers before the open on solid volume of at least 50K shares, trading at over $10. MDT (-6.04%). Only one stock met the criteria this morning

Pre-Market Top 5 Gainers for November 18 2008
The following stocks were the top percentage gainers before the open on solid volume of at least 50K shares, trading at over $10. HPQ +13.81%, YHOO +12.6%, DELL +4.56%, HD +3.5%, BIDU +2.9%

Freeport McMoRan-FCX estimates lowered at Morgan Stanley
Morgan Stanley lowered FCX estimates due to lower molybdenum prices and new production guidance. Shares are Overweight rated

S&P 500-SPX: Pivot Points
The following are the pivot points for the SPX. Pivot High: 866.520, Pivot Low: 833.210. 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.

Tinder Dry Conditions for a Reversal Day?
The surprise pre-announcement to the upside by Hewlett-Packard (HPQ) has turned the futures around completely. Tuesdays already have a reputation for being strong reversal days. As we were heading down to the lows of last week it seemed there was no good news to be had; HPQ has changed all that. We can expect a strong rally in technology at least at the front of the day. Whether that holds is going to tell us a lot about conditions. If this gets sold, we have non-fundamental issues still driving the tape. Levels to watch now in the QQQQ are as follows. Resistance levels to watch as potential upside objectives are at $28.79, $29.26, $29.93, $30.61, $31.47. Support is at $27.52.

Baidu.com-BIDU weakness provides good entry point, says JP Morgan
JP Morgan believes concerns regarding Baidu’s inappropriate practices are overdone and remains positive on the stock. The firm maintains an Overweight rating.

Capital One-COF sells $3.56B in preferred stock to Treasury

Jim Cramer’s “Mad Money”
Cramer said every time the DJIA bounces off its lows of 8,200, he really wants to be a bull. But then, reality returns and he realizes the bad news is still getting worse, not better. Cramer said the federal bailouts still haven’t addressed the real problem of home price deflation, nor have they created a single new job. He said the dismal retail sales numbers prove that the consumer is still not spending. And the fate of General Motors (GM) still lingers over the economy like a huge black cloud. Cramer said the only things that would change his mind on the markets are interest rate cuts in China and Europe, or a resolution to the GM crisis. With the collapse in crude oil prices, Cramer took a hard look at his basket of green stocks: First Solar (FSLR), Foster Wheeler (FWLT), Shaw Group (SGR), MEMC Technologies (WFR), BorgWarner (BWA), TetraTech (TTEK), OM Group (OMG) and Fuel-Tech (FTEK). Since Cramer first highlighted the green stocks on April 16, 2007, the stocks have enjoyed a 65% gain on average between then and Nov. 6, 2008. However, as oil and natural gas prices have plummeted of late, so have their green alternatives. The green basket is now down 37% from April 2007 to today. Cramer blamed Monday’s fall in green stocks on lower oil prices, as well as forced selling by ailing hedge fund investors. Cramer said that with President-elect Barrack Obama clearly in the ethanol camp, he sees little chance for a resurgence for the natural gas alternative or in any of the wind or solar plays anytime soon. Next, Cramer talked with Jim Hackett, chairman and CEO of Anadarko Petroleum (APC). Hackett said he still sees natural gas as the fuel for the future and one that’s right for the economy and for the environment. Hackett said Anadarko has largely protected itself from the downturn by hedging 95% of its production for 2008 and 2009 and 70% of its production for 2010. He said the acquisitions made by the company in 2007 are still economically viable. Hackett said he sees the natural gas market as now being oversold. He predicted the stocks will trade ahead of the coming recovery and represent a great value to shareholders. Anadarko remains committed to its stock repurchase program. Cramer said, Anadarko’s stock does represent a lot of value, but he fell short of offering his full endorsement. LIGHTNING ROUND: (Bullish) WY; NAT; DUK; TAP; CPB; GIS. (Bearish) AET; MER; FRO; CBI; AEE; CAG.

Fast Money position recap- Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (ETFC); Pete Najarian Owns (MOS) And Is Short (MOS) Calls; Pete Najarian Owns (SCHW) And Is Short (SCHW) Calls; Pete Najarian Owns (CVX) Put Spread; Pete Najarian Owns (ADM) Call Spread; Finerman’s Firm Owns (MSFT); Finerman’s Firm Owns (OIH) Puts; Finerman’s Firm Owns (ROH) Calls; Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (RTH), (USO), (BBT), (COF), (VNO); Seymour Owns (AAPL), (BAC), (ETFC), (F), (INTC), (MER); Seymour Is Short (TM)

Premarket Analysis for 11/17 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Mon, 17 Nov 2008 14:26:00 GMT

Posted By Optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Monday, November 17th
WALL STREET JOURNAL: The Wall Street Journal reported that the seven top executives at Goldman Sachs (GS), including CEO Lloyd Blankfein, decided to forgo their 2008 bonuses. The executives will only be eligible for their $600K base salaries…FINANCIAL TIMES: After suffering a $25.3B quarterly loss on credit related writedowns, Freddie Mac (FRE) asked the U.S. government for a $13.8B “lifeline,” the Financial Times reported…TELEGRAPH: The Telegraph revealed that, according to people familiar with the matter, JP Morgan (JPM) has begun plans to cut jobs in a similar fashion to its peers. This move may result in the loss of thousands of jobs worldwide…CNBC: Citigroup (C) CEO Vikram Pandit is expected to announce large new reductions in the bank’s workforce this morning, inside sources said, and will likely say that the company will dismiss more employees than the 23K it said it would cut at the end of Q3. CNBC reported that Pandit is expected to announce that nearly 40K Citi employees could eventually lose their jobs, depending on the extent of the bank’s asset sales, according to the sources…ALL THINGS DIGITAL: Yahoo (YHOO) sources informed All Things Digital that the previously announced lay offs of “at least” 10% are set for December 10…

Asian Markets Wrap-Up for Monday, November 17
Stocks across Asia fell as global economies continued to slow, oil prices slid and recession in Japan and Hong Kong deepened…JAPAN: The Nikkei 225 Stock Average gained 60.19, or 0.7%, to 8,522.58, while the broader Topix index climbed 3.58, or 0.4%, to 850.49. Daiichi Sankyo increased 5.4% to Y1,964. Tsumura & Co. added 3.4% to Y3,050. Takeda Pharmaceutical Co. was up 2.8% to Y4,820. West Japan Railway advanced 6% to Y423,000. Central Japan Railway Co. rose 5.9% to Y820,000. Osaka Gas Co. gained 5.4% to Y374. Oji Paper was up 2.4% to Y435. Tokai Rubber Industries added 3.6% to Y905. GS Yuasa jumped 15% to Y390. Mitsubishi Estate dropped 5.4% to Y1,396. Mitsui Fudosan Co. lost 5.2% to Y1,383. Daiwa System Co. tumbled 20% to Y190…CHINA: The CSI 300 Index advanced 14.21, or 0.7%, to 1,957.86. China Southern Airlines (ZNH) jumped 9.9% to 3.67 yuan. China Eastern Airlines Corp. (CEA) climbed the 10% daily limit to 3.85 yuan. Sany Heavy Industry was up 3.6% to 17.60 yuan. China Railway Erju Co. surged 9.4% to 9.93 yuan. PetroChina Co. (PTR) fell 0.4% to 11.47 yuan. Aluminum Corp. of China (ACH) rose 1.7% to 8.05 yuan.Yunnan Aluminium Co. increased 4.7% to 5.08 yuan. China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. climbed 5.5% to 7.05 yuan…HONG KONG: The Hang Seng Index retreated 13.13, or 0.1%, to 13,529.53. Wing Hang Bank sank 4.5% to HK$37.10. Greentown China plunged 14% to HK$2.30. Agile Property Holdings lost 7.6% to HK$2.68. Bank of East Asia (BKEAY) was up 3.2% to HK$15.28. Li & Fung increased 22 cents, or 1.5%, to HK$14.46…AUSTRALIA: The S&P/ASX 200 Index declined 95.10, or 2.54%, to 3,653.00. BHP Billiton (BHP) dropped 4.9% to A$25.10. Babcock fell 15% to 41 Australian cents. GPT dived 8.9% to A$1.02. James Hardie Industries (JHX) lost 7.4% to A$4.40. Coca-Cola Amatil (CCLAY) leapt 13% to A$9.31.

Weekly additions to the Investor’s Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of November 14 : Ralcorp (RAH), Shaw Communications (SJR), Meridian Bioscience (VIVO), Capitol Federated Finl. (CFFN), Edwards Lifesciences (EW), American Science & Engineering (ASEI), Green Mtn Coffee Roasters (GMCR), Sabine Royalty Tr (SBR), Medco Health Solutions (MHS), SAIC Inc (SAI), Perrigo (PRGO), Cass Information System (CASS), Abbott Laboratories (ABT), General Mills (GIS), Family Dollat Stores (FDO), Open Text (OTEX), Fresenius Medical (FMS)

Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of November 14: Southwestern Energy (SWN), Compass Minerals (CMP), Ebix Inc (EBIX), Synaptics (SYNA), Ensign Group (ENSG), Websense (WBSN), Cornell Companies (CRN), Panera Bread(PNRA), Somanetics (SMTS), First Cash Financial (FCFS), Tractor Supply (TSCO), Forrester Research (FORR), Genesee & Wyoming (GWR), Balchem Corp (BCPC), Grainger WW (GWW), Franklin Electric (FELE), BJs Wholesale (BJ)

Technology Trader: Silicon Valley is not expecting a happy new year- Barron’s
Columnist Eric Savitz says, with the last few major earnings announcements now behind us, it seems a reasonable time to do some damage assessment. From the end of September through Thursday’s close, the Nasdaq Composite fell 495 points, or about 24%, and that’s after Thursday’s hefty rally. Savitz says, “What is becoming increasingly clear, however, is that the tectonic shifts that have ripped through the financial sector have led to mammoth collateral damage in Silicon Valley.” It has been apparent for weeks now that companies are slashing spending, and consumers are tapped out. Savitz noted that the real issue heading into Q3 results was not the results for the September quarter; it was what the companies would say about the December quarter and beyond. Most of what they had to say wasn’t good. Not good at all. A vivid example of this was comments and guidance from Best Buy’s (BBY) COO Brian Dunn who said, “rapid, seismic changes in consumer behavior have created the most difficult climate we’ve ever seen.” Add to that Intel (INTC), which made a breathtaking reduction in its outlook. Then there was chip-maker National Semiconductor’s (NSM) reduced outlook, and semiconductor manufacturer Applied Materials (AMAT). Estimate reductions by analysts in theses tech leaders trickled down to the likes of Dell (DELL), Hewlett-Packard (HPQ) and Apple (AAPL). The Intel forecast also raised serious questions about recent forecasts from Microsoft (MSFT).

Hedge funds tried to sell their risky assets before Saturday’s deadline-NY Post
Hedge funds rushed to unload their higher risk stocks and bonds in the weeks before Saturday’s deadline for investors to remove their money from the hedge funds. The withdrawals could force up to 25% of all hedge funds to close their doors, industry sources say.

Mining companies see demand plunge-WSJ
In a rapid reversal, big mining companies worldwide are seeing demand and prices decline as recession halts economic growth. As production is cut, thousands of mining workers are losing their jobs, reports the Wall Street Journal. Unclear if the industry will be able to soon stabilize itself.

U.S. equity futures continue to point to a lower open
Stock futures continue to point to a lower open. Citigroup (C) has made a series of announcements related to the streamlining of their operations and to implement cost reductions. Layoffs at the firm could total as many as 50,000 employees. Citigroup, which employs 352,000, said it felt it was necessary to put these strategies into effect in addition to cutting risky assets to help strengthen its capital position. The Citigroup news, in addition to a lack of action from the G-20 summit over the weekend, has the futures well below fair value.

Commercial property market troubles hit private firms-WSJ
When DBSI, a private real estate firm, last week filed for bankruptcy, it affected 8,500 investors and 240 commercial properties in 30 states valued at $2.4B. Clearly, reports the Wall Street Journal, commercial real estate is in its worst period in almost two decades. And now that is taking its toll on smaller owners out of sight of the public markets. “Whatever a depression is, in the real-estate industry, we are in one,” says Richard Lipton, a partner at law firm Baker & McKenzie.

Analysts Upgrade Summary for Monday, November 17th
MOST NOTEWORTHY: McDonald’s (MCD), Nokia (NOK) and UCBH Holdings (UCBH) were today’s noteworthy upgrades: UBS upgraded McDonald’s to Buy from Neutral based on expectations the it can deliver on 2009 EPS expectations and potential for accelerating share gains. Bernstein upgraded Nokia to Outperform from Underperform on valuation following the company’s profit warning. Merrill upgraded shares to Buy from Neutral to reflect valuation and Nokia’s new product portfolio. Shares were also upgraded to Hold from Sell at WestLB. B. Riley raised UCBH Holdings to Buy from Neutral to reflect the improved valuation and the company’s stronger capital position provided by the US Treasury investment…OTHER UPGRADES: Parexel (PRXL) was upgraded to Buy from Hold at Jefferies. CTS Corp (CTS) was lifted to Neutral from Underweight at JP Morgan. Hospitality Properties (HPT) was upgraded to Equal Weight from Underweight at Morgan Stanley.

Analysts Downgrade Summary for Monday, November 17th
MOST NOTEWORTHY: Disney (DIS), Dell (DELL) and MDS Inc (MDZ) were today’s noteworthy downgrades: Soleil downgraded Disney to Hold from Buy to reflect the weakening macro-economic outlook and their belief consensus estimates may be too high. The firm lowered their target to $23 from $40. Merrill downgraded Dell to Neutral from Buy on expectations PC sales will decline next year amid the slowing economy. The firm lowered Dell’s target price to $13 from $22. Jefferies cut MDS Inc to Hold from Buy to reflect slowing demand and a lack of catalysts to unlock the company’s assets. The firm lowered their target to $10.50 from $15…OTHER DOWNGRADES: Alcoa (AA) was lowered to Neutral from Buy at UBS. Tesco PLC (TSCDY) was downgraded at JP Morgan to Underweight from Neutral. Merrill downgraded SAP AG (SAP) to Neutral from Buy. Goldman added Altera (ALTR) to the Conviction Sell List.

Analysts Initiation Summary for Monday, November 17th
MOST NOTEWORTHY: AutoZone (AZO), Advance Auto Parts (AAP) and Sunway Global (SUWG) were today’s noteworthy initiations: Citigroup thinks AutoZone will benefit from the slowdown in car sales and thinks the recent pullback is overdone. Shares were initiated with a Buy rating and $146 target. Citigroup also believes Advance Auto Parts will benefit from the slowdown in car sales and started shares with a Buy rating and $35 target. After Sunway reported higher than expected revenue, Roth Capital thinks the company is poised for substantial growth, but the firm thinks its remaining warrants may keep the shares trading at a modest valuation for a significant amount of time. The firm started shares with a Hold rating and $3.60 target…OTHER INITIATIONS: Mechel Steel (MTL) was initiated with a Neutral rating at Merrill Lynch. China Life Insurance (LFC) was assumed with a Buy rating at UBS. Gap (GPS) was started at Cowen with a Neutral rating.

Jim Cramer’s “Mad Money”
Cramer’s Friday “Mad Money” show had him pondering what the economy would look like if the government allows General Motors (GM) to fail. The economic consequences of a GM failure would be staggering, and the mass surge in unemployment would be felt immediately by the 2/3 of the U.S. economy that depends on consumer spending. Cramer predicted the impact would translate to another 2,000-point drop in the DJIA. General Motors, he said, would have double the impact of the Lehman Brothers collapse. Until the Federal government acts, Cramer sees only two options: sit on the sidelines and wait, or sell ahead of the news. Cramer said, if GM is left to fail, he’d be a buyer only after his predicted 2,000 point freefall. Cramer talked with Sandy Cutler, chairman and CEO of power management company Eaton (ETN). Cutler said, Eaton began preparing for the downturn last year. He’s pleased with Eaton’s current mix of businesses and expects them to continue to deliver growth, even in the downturn. Cutler said the company’s dividend remains solid. Cramer said Eaton is exactly the kind of stock he wants to buy on the big down days in the market. Cramer surprised viewers with a change of heart and recommended chipmaker Advanced Micro Devices (AMD) as one tech stock that simply can’t go much lower. Cramer said he still doesn’t expect a rally in technology stocks any time soon, but after falling 67% so far this year, AMD may be one speculative stock investors should consider. With the company now trading near it’s cash value of $2.20 a share, Cramer said the news is beginning to look up for AMD, and he’d be a buyer. MAD MAIL: L-1 Identity Systems (ID) fits his model for what to buy in this market, he’s holding judgment on the company until he can talk with its CEO. Cramer told another viewer that if forced to choose, he likes Kinder Morgan (KMP) more than his favorite utility Duke Energy (DUK). LIGHTNING ROUND: (Bullish) KMP; NAT; LPS; DUK. (Bearish) NRGY; STI; TK; MGM; FPL.

Fast Money position recap- Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Is Short (TM); Macke Owns (MSFT), (UUP), (MGM), (WMT), (MCD); Finerman’s Firm Owns (MSFT); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (USO), (BBT), (GNK), (COF); Seymour Owns (AAPL), (BAC), (EEM), (F), (FXI)

Premarket Analysis for 11/13 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Thu, 13 Nov 2008 14:33:00 GMT

Posted by Optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Thursday, November 13th
WALL STREET JOURNAL: The Wall Street Journal reported that Andrew Cuomo, New York state’s attorney general, is said to be seeking data from Bank of America (BAC). According to a person familiar with the matter, Cuomo’s office this week issued a subpoena to the bank looking for information on how it allocates its bonuses…FINANCIAL TIMES: The Financial Times learned that BAE Systems (BAESY) is in negotiations with Oman to sell up to 24 Eurofighter Typhoon fighter aircraft. Sources close to the negotiations said the deal could be worth at least GBP1.4B…REUTERS: Former American International Group (AIG) CEO Maurice “Hank” Greenberg said he would consider buying the Asian life insurance operations if the firm were to put the unit on the market. Reuters reported that Greenberg said he will only bid if the whole of AIA was for sale and would not go into partnership with AIG…BLOOMBERG: According to Bloomberg, rumors swirled that the German economy has entered the worst recession in at least 12 years after the Federal Statistics Office said gross domestic product dropped a seasonally adjusted 0.5% from the second quarter…

Asian Markets Wrap-up for Thursday, November 13
Asian stocks declined, after China’s industrial production rose less than expected last month and investors reacted negatively to the U.S. Treasury’s decision not to buy banks’ mortgage assets. JAPAN: Stocks dropped, led by electronics exporters after Best Buy (BBY) lowered its earnings outlook. The Nikkei 225 slumped 5.25% to 8,238.64. Sony (SNE) fell 8.7%, and Nintendo (NTDOY) declined 6.9%. Canon (CAJ), a digital camera maker, sank 6.3%. Chipmaker Elpida (ELPDF) retreated 13% after Intel (INTC) slashed its sales forecast. Mitsubishi UFJ Financial Group (MTU) dropped 3.7%. HONG KONG: The Hang Seng Index slumped 5.2%, to 13,221.35. HSBC (HBC) dropped 6.3% and Industrial & Commercial Bank of China declined 11%. Oil producer PetroChina (PTR) retreated 6.4% and Cnooc (CEO), another energy company, lost 5.3%. Hong Kong Exchanges sank 7.9% after it reported weaker than expected earnings. AROUND ASIA: China’s CSI 300 Index advanced 4.01%, but South Korea’s KRX 100 fell 3.08% and Taiwan’s Taiex lost 3.85%…China’s industrial production rose 8.2% year-over-year in October, the slowest increase in seven years.

German GDP dropped more than expected in Q3-Bloomberg
Germany’s GDP shrank a seasonably adjusted -0.5% in Q3, its biggest decline in 12 years. Economists predicted that Europe’s largest economy had contracted -0.2% last quarter.

EIA cuts demand forecast-FT
The Financial Times reports that the EIA has cut demand again. In explaining its decision, the IEA said in its latest monthly report, “The International Monetary Fund now sees advanced economies unable to escape recession: collectively, these are bound to contract by at least 0.2 per cent in 2009, for the first time since the second world war, instead of growing by 0.5 per cent as forecast in October. In addition, their GDP growth outlook for 2008 has also been slightly adjusted down to 1.4 per cent for the year, in anticipation of an even sharper contraction in both the third and fourth quarters of 2008.”

Futures turn lower on disappointing employment data
Stock futures are pointing to a lower open after the release of the jobless claims numbers. The initial jobless claims report showed 516k initial claims versus an expected 480k. This comes on the heels of 484k new jobless claims last week. The initial jobless claims report is a snapshot of the number of people filing a jobless claim for the first time. The continuing claims report showed 3.82M versus an expected 3.82M. The futures weakened immediately after the release of the numbers.

Analysts Upgrade Summary for Thursday, November 13th
MOST NOTEWORTHY: Charlotte Russe (CHIC), Las Vegas Sands (LVS) and J. Sainsbury (JSAIY) were today’s noteworthy upgrades: Roth Capital upgraded Charlotte Russe to Hold from Sell. The firm is positive on management’s strategy to drive improved operating performance and is encouraged by the company’s longer-term growth prospects. Banc of America upgraded shares of Las Vegas Sands to Neutral from Sell following the company’s capital raise as they see a more balanced risk/reward at current levels. The firm lowered their target to $5 from $12. J. Sainsbury was upgraded to Buy from Hold at ING and to Neutral from Underweight at JP Morgan after the company topped earnings expectations…OTHER UPGRADES: Constellation Brands (STZ) was raised to Buy from Neutral at UBS. Credit Suisse upgraded Ameriprise (AMP) to Outperform from Neutral. Bob Evans (BOBE) was upgraded to Hold from Underweight at KeyBanc.

Analysts Downgrade Summary for Thursday, November 13th
MOST NOTEWORTHY: Tibco (TIBX), General Motors (GM) and Donaldson (DCI) were today’s noteworthy downgrades: Jefferies downgraded shares of Tibco to Underperform from Hold to reflect Tibco’s exposure to the slowing financial services sector and their belief there is little chance of a company sale in the near-term. The company’s target was lowered to $3 from $5. JP Morgan downgraded General Motors to Neutral from Overweight citing the “ambiguity of government aid structure” and the likely dilution to equity. The analyst said GM needs money now to get past December 2008 and will need at least $15B to get through 2009, with the total bailout potentially reaching $30B. William Blair cut Donaldson to Market Perform from Outperform as they see downward revisions to management guidance given the recent deterioration in the global economic outlook…OTHER DOWNGRADES: Goldman downgraded Dell (DELL) to Sell from Neutral and added shares to the Conviction Sell List. J.C. Penney (JCP) was lowered to Equal Weight from Overweight at Morgan Stanley. Macquarie Infrastructure (MIC) was downgraded at Citigroup to Hold from Buy.

Analysts Initiation Summary for Thursday, November 13th
MOST NOTEWORTHY: Palm (PALM), American Express (AXP) and InterActiveCorp (IACI) were today’s noteworthy initiations: Goldman initiated Palm with a Sell rating and $2.60 target citing weaker revenues and intense smartphone competition. American Express was assumed with an Underperform rating and $17 target at Jefferies. Jefferies sees downside to shares from higher funding costs and deteriorating credit performance. Stanford thinks InterActiveCorp has quality assets but the firm believes the company’s strategy for achieving growth is unclear. Shares were initiated with a Hold rating and $18 target…OTHER INITIATIONS: BMP Sunstone (BJGP) was initiated with a Hold rating at Roth Capital. Atheros (ATHR) was started with a Neutral rating and $14.50 target at JP Morgan.

Fast Money Position recap-
Macke Owns (SDS), (UUP), (WMT), (MSFT); Najarian Owns (AXP) Put Spread; Najarian Owns (CHK) Call Spread; Najarian Owns (PTIE) Calls; Seymour Owns (AAPL), (BAC), (F), (MER); Seygem Assset Management Is Short (RSX); Finerman’s Firm Owns (OIH) Puts; Finerman’s Firm Owns (MSFT); Finerman’s Firm Is Short (USO), (VNO), (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (BBT,), (GNK)

Premarket Analysis for 11/11 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Tue, 11 Nov 2008 14:26:00 GMT

From Briefing.com

Periodicals Wrap-Up for Tuesday, November 11th
WALL STREET JOURNAL: The Federal Reserve will delay its rescue plan for money-market funds until later this month, the Wall Street Journal reported. The WSJ said the delay appears to be caused by the Fed’s preoccupation with other bailouts and disputes over how the program will be set up… BARRON’S: The oil-services leader Schlumberger (SLB) is now being thought of as a relative safe harbor in the oil-services field, thanks to greater foreign diversification and customers that mainly rank among the cash-rich major integrated and national oil companies, Barron’s reported. Also, Schlumberger generates three-fourths of its revenues from overseas. Continued or accelerated share repurchases, with $7B left out of the $8B authorization, could also lift earnings…IBD: Last month F5 Networks (FFIV) beat Wall Street estimates for its fourth quarter and analysts see double digit annual earnings growth through 2010. The software for application delivery networking company overcame its $210M 2007 purchase of Acopia Networks, whose customers are mostly in the financial sector. The deal came just before the subprime crisis hit and before the banking sector’s demise. Now the company is relying on the tried and true product line: application delivery controls that received an update last summer and is a hot seller, according to Investor’s Business Daily’s “The New America”…NEW YORK TIMES: The New York Times reported that this week President-elect Barack Obama urged President Bush to support immediate emergency aid for the struggling auto industry. Sources familiar with the matter said President Bush indicated he could support this, and also an economic stimulus package, if Congressional Democrats agreed to drop opposition to a free-trade agreement with Colombia…

Asian Markets Wrap-up for Tuesday, November 11
Stocks dropped in a majority of Asian countries as investors worried that companies’ earnings would fall further. JAPAN: The Nikkei 225 fell 3% to 8,809.30. Canon (CAJ) declined 8.4%, while Citizen Holdings, which makes watches, slumped 9.5% after slashing its profit outlook. Seiko, another watch maker, also lowered its earnings guidance and its shares tumbled 10%. JTEKT (JTEKF), which manufactures power steering systems, also declined 10%. Agricultural machinery maker Iseki (ISKIF) jumped 11% after reporting higher than expected 1H08 earnings. AUSTRALIA: The S&P/ASX 200 Index declined 3.58% to 3,960.90. Commonwealth Bank sank 6.3% and National Australia Bank (NABZY) fell 9%. Babcock & Brown, an asset manager, tumbled 20% and Rio Tinto (RTP) lost 1.9%. Foster’s Group (FBRWY) dropped 3%, after it reportedly backed out of plans to sell its wine making unit. AROUND ASIA: China’s CSI 300 dipped 1.13%, while South Korea’s KRX 100 fell 2.24% and Taiwan’s Taiex slipped 2.15%…. China’s exports rose 19.2% year-over-year in October.

Obama reportedly presses Bush to help the auto companies-NY Times
President-elect Barack Obama reportedly urged President Bush to immediately aid U.S. automakers, inside sources said. Bush said he would support some government assistance for the automakers if Obama and Congressional Democrats agreed to back a free trade deal with Columbia which they had previously opposed, the sources added.

Tale of woe: DryShips exemplifies shipping industry’s decline-WSJ
DryShips (DRYS) is one of the most actively traded shipping stocks. Its stock has fallen 84% this year, and there are questions about its ability to pay debt. The company says it may sell 25M additional shares, which will dilute current holders. For the shipping sector the Baltic Dry Index recently was 820, off 93% from 11793 in May, and most shippers are down 60% or more, reports the Wall Street Journal. “For shipping, the spot-market rates have plummeted so much that it takes a lot of air out of their balloon,” says Bruce Gulliver of Jefferson Research. China’s $586B stimulus package might help but it might not as shipments are booked a year or two in advance.

U.S. equity futures continue to point to a lower open
Stock futures continue to point to a lower open. The overseas markets are lower on the heels of yesterday’s losses in the U.S., and today is starting off down once again. Because it’s Veterans Day trading may be lighter than normal. Meanwhile, the economy continues to wear on corporate America. The auto makers are running out of cash and have asked the government for bailout funds. The financial sector remains a mess with Citigroup (C) shares hitting a multi-year low yesterday and electronics giant Circuit City (CC) filing for Chapter 11 bankruptcy. The lone economic number due out today is an optimism reading and it will be surprising if the report can match analysts predictions of 42.0, which would be higher than last month’s 41.1

Hedge Fund industry could shrink by 50%-FINalternatives
Peter Carey, Senior Investment Officer at the $153B New York State Common Retirement Fund, said the industry could shrink as much as 50% in front of an audience at the Asset Allocation Forum yesterday. He also predicted that fees will decrease and more blue-chip shops will open their funds to outside capital and partnership opportunities.

Super Bowl ad prices give pause to potential buyers-WSJ
These days is it worth spending up to $3M on advertising during the Super Bowl? FedEx (FDX) is on the fence, waiting for a bargain as are others, reports the Wall Street Journal. “With this much money on the line it can be a negative reflection on a company, especially if they are cutting back staff or getting a government bailout,” says Steve Lanzano, COO of MPG North America, a media buyer.

Goldman lays off 10% bankers in Japan-Reuters
Goldman Sachs (GS) has cut 10% of its bankers in Tokyo, including Naomi Matsuoka, one of the top female bankers in Japan and leader of the equity capital markets team. A spokeswoman for the bank declined to comment.

Goldman bet against bonds it helped sell- LA Times
The Los Angeles Times reports that Goldman Sachs (GS) told clients to invest against California bonds even though the investment bank collected millions in fees to help the state sell some of the bonds. Paul Rosenstiel, head of the public finance division of the treasurer’s office said it could exaggerate worries about California’s credit and raise the interest rate at which the state would have to pay to borrow money. Although Goldman’s actions are not illegal, the conflict of interest may be inappropriate for business.

A stronger dollar affects some defensive stocks-WSJ
Currency swings on international companies is affecting their profits, reports the Wall Street Journal’s “Heard on the Street”, and investors need to refocus their understanding of the impact on these companies when the dollar strengthens against the euro. Now it’s up 25% from July.

Radical changes needed at GE Capital-WSJ
Even with government backing, GE’s (GE) GE Capital needs to make severe changes to show investors that it’s $680B business is on solid footing, according to the Wall Street Journal’s “Heard on the Street”. Specifically, its business model is based more on the use of commercial paper than a more stable funding source such as bank deposits.

Analysts Initiation Summary for Tuesday, November 11th
MOST NOTEWORTHY: VMware (VMW), Infosys (INFY) and United Therapeutics (UTHR) were today’s noteworthy initiations: Oppenheimer initiated VMware with a Perform rating. The firm prefers to wait on the sidelines given the worsening macro environment, difficult near term comps, and increasing competition from Microsoft (MSFT). Infosys was initiated with an Outperform rating at William Blair. The firm believes Infosys has the strongest brand in offshore IT services. Deutsche Bank initiated United Therapeutics with a Buy rating and $105 target. The firm believes oral Remodulin will grow the company’s Remodulin franchise and sees a near-term catalyst from Freedom-C expected mid-November…OTHER INITIATIONS: Cowen resumed coverage of Urban Outfitters (URBN) with a Neutral rating. ’s Sporting Goods (DKS) was started with an Underweight rating at Morgan Stanley. Roth Capital initiated HQ Sustainable Maritime (HQS) with a Buy rating and $12 target. :

Analysts Downgrade Summary for Tuesday, November 11th
MOST NOTEWORTHY: Sangamo BioSciences (SGMO), GLG PArtners (GLG) and KKR Financial (KFN) were today’s noteworthy downgrades: Merriman downgraded shares of Sangamo BioSciences to Neutral from Buy after the company announced Phase II SB-509 results which missed its endpoints on several measures of efficacy. Keefe Bruyette downgraded GLG Partners to Market Perform from Outperform to reflect lower net AUM and the negative market environment quarter-to-date. Citigroup cut KKR Financial to Sell from Hold to reflect the company’s “weak” Q3 results and the continued dislocation in the credit markets. The company’s target was lowered to $2 from $10. Friedman Billings downgraded KKR Financial to Market Perform from Outperform as they believe the company’s CLOs will “trap” cash for an indeterminate period of time…OTHER DOWNGRADES: Avis Budget Group (CAR) was downgraded to Underweight from Equal Weight at Barclays. DISH Network (DISH) was lowered to Equal Weight from Overweight at Morgan Stanley. Tyson Foods (TSN) was downgraded at JP Morgan to Underweight from Overweight.

Analysts Upgrade Summary for Tuesday, November 11th
MOST NOTEWORTHY: Optimer Pharm (OPTR), Quest Diagnostics (DGX) and Jacobs Engineering (JEC) were today’s noteworthy upgrades: Baird upgraded Optimer Pharm to Outperform from Neutral and raised its target to $13 from $8 citing the decidedly positive data from the OPT-80 trial. Banc of America upgraded Quest Diagnostics to Buy from Neutral on valuation and believes management has set expectations well. Credit Suisse views Jacobs Engineering as a high quality name given the quality of management, execution track record, and relationship business model. Shares were upgraded to Outperform from Neutral…OTHER UPGRADES: Horizon Lines (HRZ) was upgraded to Overweight from Equal Weight at Stephens. Bancolombia SA (CIB) was raised to Buy from Neutral. Great Lakes Dredge (GLDD) was upgraded to Buy from Hold at Morgan Joseph.

Jim Cramer’s “Mad Money”
Cramer said that if there is any any hope for a sustainable rally in the stock market, General Motors (GM) “must be saved.” Cramer said the markets cannot rally until the federal government offers a bailout not only to GM but also Ford (F) and Chrysler (DCI). “It’s all one piece,” he said. Cramer said this is a time in the market where traders need stocks with high dividend yields –anything over 4%. More importantly, he noted, it’s key to look for “accidental high-yielders.” These are solid companies that are offering a high yield because of an overdone stock decline. Such a stock is PPG Industries (PPG), which is down 50% from its 52-week high. But Cramer believes the stock, which is now offering a 4.65% yield, has been unfairly punished, as the company has raised its dividend every year since 1972. Cramer reiterated his idea that traders reinvest the dividend in the stock so that they can capture the power of the compounding dividend even if the stock does nothing for a while. Cramer also likes that the company because it has $600M in cash, which could mean a stock buyback program. He also likes the fact that one-third of the company’s business is in Asia, making it a good Chinese infrastructure play. MAD MAIL: Cramer ahead of the Obama presidency, offered Tenet (THC) as a healthcare play, but said any Energy or Solar names just aren’t working right now. LIGHTNING ROUND: (Bullish) none; (Bearish) ZOLT; LCC; FSLR; SNDK.

Premarket Analysis for 11/10 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Mon, 10 Nov 2008 14:32:00 GMT

From Briefing.com

Periodicals Wrap-Up for Monday, November 10th
WALL STREET JOURNAL: According to people familiar with the matter, the Wall Street Journal reported that the U.S. government has reached a deal to replace its original $123B bailout of American International (AIG) with a new $150B package…FINANCIAL TIMES: The Financial Times reported that as Wall Street banks look to cut costs, the financial industry is preparing for a new round of job cuts. Executives and analysts believe the redundancies could be more than 70,000 among U.S. banks alone in addition to the 150,000 jobs already lost worldwide in the financial sector. Investment bankers and traders are expected to be hardest hit by the new round of job cuts…VARIETY: Ahead of its earnings report, Variety reported that Lionsgate (LGF) is slated to cut 41 positions, or 8% of its staff. The cuts are across all divisions but almost all are at the Santa Monica headquarters…THE STANDARD: Sources said that Hongkong and Shanghai Banking Corp, the Asian arm of HSBC Holdings (HBC) may lay off nearly 600 employees to survive the worsening economy. The Standard reported that the private banking and insurance sector will not be affected and the consumer banking and information technology sectors will be the hardest hit…

CME Group faces “futute shock”-Crains
As congress weighs vast reforms in financial, oversight the CME Group (CME) faces a different regulatory landscape “I don’t think that anybody expects that we can maintain the status quo,” says John Damgard, president of the Washington, D.C.-based Futures Industry Assn. “There’s a tsunami out there, and we are going to get swept up in it.”

Solar Stocks: volatility persists - Barron’s
Technology Trader columnist Eric Savitz talks about the volatility of Solar stocks lately. Heading into the election, the stocks staged a multi-day rally that lifted some by 60% or more. But in the post-election period, the stocks have resumed tumbling, giving back a good portion of their recent gains. A stronger dollar is badly hurting revenue and profits at solar companies that source products in the U.S. or China but price them in euros. Meanwhile, the credit crunch has made it almost impossible to finance solar projects. And now there are reports that spot-market prices for polysilicon are collapsing, pressuring prices for both solar cells and modules. In short, the solar industry is at serious risk of experiencing reduced demand at the very moment that supply is expanding. Savitz says that’s not a good combination.

Plugged In: Yahoo’s next move? - Barron’s
Struggling Yahoo! (YHOO) last week company had its two most obvious options taken away. First, Google (GOOG) pulled out of their advertising outsourcing deal, which was almost certain to be blocked by the Justice Department. And secondly, speaking in San Francisco Wednesday, Yhoo!’s Yang said that he’d sell at the right price, whatever that is. But Friday morning, Microsoft (MSFT) CEO Steve Ballmer blew a hole in that theory, saying he’s not interested in making a new bid. Columnist Eric Savitz says, that if he were Ballmer, he’d sit on his hands and wait for Yahoo! to drop even further in the face of an obvious lack of strategic alternatives and crumbling financial performance. He might not bid with the stock at $12, but what about at $8? Savitz speculates that at some point, at a lower stock price, Ballmer could jump in with an offer for Yahoo!. Savitz also puts the idea out there that Yahoo! could still sell its Asian assets and buy back stock, and it could rejuvenate investor interest by tossing out Yang and President Sue Decker in favor of a new management duo.

Technology Trader: Buying Cisco on bad news - Barron’s
Columnist Eric Savitz patted himself on the back for last week’s recommendation that investors listen to the Cisco Systems (CSCO) earnings conference call. Savitz says, the most significant development for tech investors last week was that call. Analysts in the days before the call had trimmed expectations for revenue growth to 3% or so. Still, Cisco came up with a shocker: The company now sees revenue in the January quarter down 5%-10%. More alarming was the 8% drop in enterprise orders and the 11% slide for the U.S. enterprise sector. Chambers said weakness that began in the U.S. a year ago has spread around the globe: to Europe, then to the developing markets and, most recently, to Asia. On Thursday, the day after the forecast, Cisco fell a relatively modest 2.6%, better than the 4.3% drop by the Nasdaq Composite and the 4.9% slide by the DJIA. Savitz said, in an odd turn of events, Cisco’s dismal guidance gave an excuse for investors to sell shares of tech (and everything else), but Cisco stock itself was relatively unaffected. For the short and long run, Savitz questions whether investor would rather own Cisco, or a basket enterprise networking stocks consisting of Alcatel-Lucent (ALU), Nortel (NT) and Ericsson (ERIC)? Cisco has already lost 37% of its value this year; the stock trades for under 11x FY09 EPS, and it has close to $27B in cash, more than a quarter of its current market cap of about $100B. Savitz says, the most amazing thing about that terrible outlook Cisco provided is that many investors decided to step up, buy the stock and stash it away.

A stronger dollar is Europe’s friend - Barron’s
Goldman Sachs estimates that a 10% drop in the euro versus the dollar translates into a profit rise of about 6% for European concerns, although that percentage could be somewhat lower amid a global economic slowdown. The euro has dropped to around $1.28 from a July peak of $1.60, a decline of about 19%. The dollar’s rise against the euro benefits some European companies and hurts others. These large-cap stocks historically have been among the most likely to rally on dollar strength….. Novartis (NVS), GlaxoSmithKline (GSK), AstraZeneca (AZN), Roche Holding (RHHBY), Nestl� (NSRGY), Reckitt Benckiser (RBGPF), Diageo (DEO), KPN (KPN.Netherlands), Union Fenosa (UNF.Spain); — while these stocks have been among the most likely to fall. So far, the dollar has rallied about 24% against the euro since mid-July… Xstrata (XTA.L), Rio Tinto (RTP), BASF (BASFY), BHP billiton (BHP), InBev (INB.VX), Telenor (TELNY), ThyssenKrupp (TKA.Germany), Bouygues (EN.France), Anglo American (AAL.UK). Also, with oil down sharply since July, big energy producers such as BP (BP) and Royal Dutch Shell (RDSA, RDSB) could be contrarian dollar plays. France’s Total (TOT) is another potential beneficiary of a stronger U.S. currency.

Sectors likely to be helped, or hurt — under Obama - Barron’s
Until the market decides if President elect Barack Obama is good or bad for stocks, and to what degree, volatility is apt to be the norm. Stuart Schweitzer, global market strategist for the JPMorgan Private Bank in NY, predicts big swings in both directions, and well into 2009. Now with the election behind us, investors are questioning which stocks/industries will be winners or losers under an Obama administration. [LOSERS] Banks, brokerages and other financial concerns, already pummeled this year, could take even more of a beating under Obama, many pundits say. Even so, financial stocks are getting so cheap that they’ll be hard to resist. Many analysts include the defense sector in their loser’s column because key Hill Democrats have been threatening to whack the defense budget. However, Defense stocks may be oversold, specifically Raytheon (RTN), Lockheed Martin (LMT) and Northrop Grumman (NOC). Because Obama supports a carbon cap-and-trade system to curb greenhouse gases, U.S. utilities could move away from coal to alternatives like natural gas, eventually it could hurt coal producers like Peabody Energy (BTU) and Massey Energy (MEE). Drug companies could take some big hits as Democrats struggle to hammer out a workable universal-health-care scheme. Pfizer (PFE) and GlaxoSmithKline (GSK) both fell 8% the day after the election. Infrastructure stocks are trickier as some warn against buying an industry group like steel, which has been battered by the economy, on the hope that some massive government infrastructure-spending plan would turn it around. Shares of United States Steel (X) are down 72% so far this year. [WINNERS] Alternative Energy: Obama promised to help reduce the nation’s dependence on foreign oil. Jens Peers, a portfolio manager of the alternative-energy funds for KBC Asset Mgmt., likes Vestas Wind Systems (VWDRY) and MEMC Electronic Materials (WFR). Autos: Obama has committed to rescuing the U.S. auto industry. But investors should be wary of assuming the best case and scooping up the bonds of these companies, despite their double-digit yields. There could be some winners in health care. Douglas Cliggott, who co-manages the Dover Long/Short Sector Fund, thinks generic drug maker Teva Pharmaceutical (TEVA) could benefit from any assault on drug pricing. And the CEO of Humana (HUM), has said that his company can benefit by bringing technology systems and other efficiencies to the insurance market. Medco Health Solutions (MHS) and Express Scripts (ESRX) also could benefit, as each offers pharmacy-benefits services.

Are we in the midst of the greatest commodities bull market? - Barron’s
Barron’s interviewed Donald Coxe, the Global Portfolio Strategist at BMO Financial Group. Coxe has helped his followers anticipate some of the biggest shifts in markets, be they in stocks or commodities. He now sees real hope for two sectors that have been taking poundings: banks and commodities. Coxe remains convinced that we are in the midst of the greatest commodities bull market of all time. Coxe says, if you aren’t deeply in the equity market, this is not a time to be committing large amounts of money. Stocks are cheap but they can get cheaper. Some Coxe’s favorite stocks are trading at low P/Es, they are the fertilizer, oil and agricultural companies. He said, the gigantic investment returns are all going to be tied to companies that meet real human needs and do it better than other companies. Coxe said the biggest commodity story is going to be food, bigger than the other ones. It is high-protein food. The way to play that is through the fertilizer stocks, the genetically modified seed stocks and the farm-equipment stocks. Coxe would not recommend specific companies, citing his firms compliance restrictions. Commodity groups that Coxe likes best are: agriculture first, as we will need more fertilizer. He says, CNH Global (CNH) is one of the top three companies in the world in the field. Coxe says, the next group has to be gold stocks. A period of massive reflation always leads to a good move in gold. The third group is energy. Despite Obama’s plan to spend $150B on alternative energy, each year we still lose 4.5M barrels of oil a day, which Coxe says we will have to replace. He says these stocks are selling for pennies on the dollar. Coxe notes BHP Billiton (BHP), which has an unrivaled set of assets, a great balance sheet, top-notch management and no scandals. Coxe says copper is also worth a look. Copper is now at $1.80 per pound, where it was in 2005. But as soon as the economy recovers, copper always doubles in price. It’s levered to growth in China and India.

Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of November 7 : Compass Minerals (CMP), Ebix (EBIX), Knight Capital Group (NITE), World Fuel Services Corp. (INT), Rock Tenn Co (RKT), Somanetics (SMTS), AAON Inc (AAON), Marvel Entertainment (MVL), Quidel Corp (QDEL), South Jersey Industries (SJI), Sunoco Logistics (SXL), Chemed Corp. (CHE), Genesee & Wyoming (GWR), Baxter International (BAX), Argon St. (STST), Balchem Corp (BCPC), Apollo Group (APOL), Myriad Genetics (MYGN), Covanta Holdings (CVA), Chevron Corp (CVX), Capella Education (CPLA), Exponent Inc (EXPO), Signature Bank (SBNY), Immucor (BLUD), Franklin Electric (FELE), BJS Wholesale Club (BJ)

Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of November 7: Syniverse Holdings (SVR), New Orientl Edu & Tech (EDU), NVE Corp (NVEC), Cash America International (CSH), Big Lots (BIG), Standard Parking Corp (STAN), Perrigo (PRGO), Union Pacific (UNP), Cellcom Israel (CEL), Church & Dwight (CHD), Children’s Place Retail (PLCE), Woodward Governor (WGOV), Elbit Systems (ESLT), MWI Veterinary Supply (MWIV), Ross Stores (ROST), Autozone (AZO), Hawaiin Electric Industries (HE), SWS Group (SWS), Cass Information System (CASS), Merit Medical Systems (MMSI), Microsemi Corp (MSCC), El Paso Electric (EE), Heico Corp. (HEI ), Fastenal (FAST), Meridian Bioscience (VIVO), Shanda Interacactive (SNDA)

U.S. gives new bailout deal to AIG-WSJ
AIG’s $123B bailout from the U.S. government has been replaced with a $150B deal, reports the Wall Street Journal. The main thrust of the package is to ease terms, but it also increases the government’s role in the financial markets. The $150B includes a $60B loan, a $40B preferred-stock investment and $50B in capital to mostly buy distressed assets. More information is expected today as AIG reports its third quarter earnings.

Citigroup negotiating purchase of a regional bank-WSJ
Citigroup (C) is in talks to buy a regional bank whose name has not been revealed, reports the Wall Street Journal, and a deal could be concluded this month. It is thought to be a bank that overlaps with Citi’s retail banking unit.

China announces $586B stimulus package-WSJ
China’s two year $586 economic stimulus package equates to about 16% of China’s 2007 economic output. The immediate result was a rally for Asian stocks. The plan will focus on housing and infrastructure, agriculture, health care and social welfare. There’s also a tax deduction for capital spending by companies.

Bin Laden may be planning massive attack against the U.S.-NTARC
The National Terror Alert Response Center is reporting that Osama bin Laden and al-Qaeda may be planning a massive terror attack against the U.S. that will “outdo by far” the 9/11 attacks.The report cites the Arab newspaper Al-Quds Al-Arabi in London.

U.S. equity futures point to a higher open
U.S. stocks continue to point to a higher open. The averages are currently pointing to a more than 2% gain at the open. Although the impetus for the move is the massive stimulus package in China, the strength can also be attributed to the additional U.S. government funds which were promised to insurance giant AIG (AIG). The government said they would provide an additional $40B to the company in return for partial ownership. The shares of AIG are currently higher by 23% in premarket trading.

Analysts Downgrade Summary for Monday, November 10th
MOST NOTEWORTHY: General Motors (GM), LandAmerica (LFG) and solar companies were today’s noteworthy downgrades: Barclays downgraded General Motors to Underweight from Equal Weight on cash concerns and believes any assistance from the government would substantially dilute equity holders. Barclays set a $1 target on GM shares. Stephens cut LandAmerica to Underweight from Equal Weight following the Fidelity National (FNF) takeover as they expect no other bidders to emerge and believe shares could go back to under $5 if Fidelity National walks away. Deutsche Bank downgraded solar companies to reflect deteriorating fundamentals in the sector, an adequate supply of c-Si modules, the strengthening dollar and restricted access to capital. First Solar (FSLR), Canadian Solar (CSIQ), Energy Conversion (ENER) and Sunpower (SPWRA) were downgraded to Hold from Buy…OTHER DOWNGRADES: Urban Outfitters (URBN) and Aeropostale (ARO) were downgraded to Underweight from Equal Weight at Barclays. FMC Technologies (FTI) was lowered to Underweight from Neutral at JP Morgan.

Analysts Initiation Summary for Monday, November 10th
MOST NOTEWORTHY: Freeport McMoRan (FCX), HLS Systems (HOLI) and Kimberly Clark (KMB) were today’s noteworthy initiations: Banc of America expects Freeport McMoRan’s earnings will decline sharply in 2009 and thinks the dividend could be at risk. Shares were initiated with a Neutral rating and $29 target. Roth Capital initiated HLS Systems with a Buy rating and $5 target. The firm is positive on the company’s management team and the company’s outlook for EPS growth. Citigroup thinks Kimberly Clark’s margins have bottomed and that the current valuation is too low. Shares were assumed with a Buy rating and $65 target…OTHER INITIATIONS: Synaptics (SYNA) and Intercontinental Exchange (ICE) were initiated at Merrill Lynch with Neutral ratings. Tim Hortons (THI) was assumed with a Sell rating at Goldman.

Analysts Upgrade Summary for Monday, November 10th
MOST NOTEWORTHY: Smith & Wesson (SWHC), Wells Fargo (WFC) and Coca-Cola Enterprises (CCE) were today’s noteworthy upgrades: Merriman upgraded Smith & Wesson to Buy from Neutral on valuation after channel checks indicated an increase in gun sales in October after an Obama win became apparent. The firm believes shares can trade up into the $4 to $5 range. Credit Suisse upgraded Wells Fargo to Outperform from Neutral citing the company’s improved balance and potential earnings power following its $11B equity offering. JP Morgan upgraded Coca-Cola Enterprises to Overweight from Neutral on valuation and easing commodity and labor costs…OTHER UPGRADES: Manulife (MFC) was raised to Outperform from Sector Perform at RBC Capital. SL Green Realty (SLG) was upgraded at UBS to Buy from Neutral Molina Healthcare (MOH) was upgraded to Equal Weight from Underweight at Barclays.

Jim Cramer’s “Mad Money”
Cramer on Friday’s show interviewed Eric Schmidt, chair/CEO of Google (GOOG) to get his insights on President-elect Barack Obama’s economic advisory board. Schmidt, an advisor, characterized Obama as someone who listens carefully and is prepared to act quickly to address the crisis head on. Schmidt outlined what he called “Google’s energy plan,” which like Obama’s plan, focuses on using wind, solar, and geothermal energy to achieve energy independence. Schmidt took issue with much of the financial bailout packages, noting they did little for taxpayers. He said that he has no intentions to leave his job for the post of chief technology officer in the new administration. Lastly, Schmidt said he expects advertising spending to rebound quickly and sees exciting opportunities ahead for Google. Cramer again urged investors to stick with high yielding dividend stocks like: Analog Devices (ADI) and Intel (INTC), Kimberly-Clark (KMB) and Kraft (KFT). In the utility sector, Cramer reiterated a buy for Duke Energy (DUK), and he likes industrial electronics makers Emerson Electric (EMR) and Ingersoll-Rand (IR). As part of his “Invest in America” series, Cramer said Verizon (VZ), with its 6.1% yield, should be a part of investors’ portfolios. He welcomed Ivan Seidenberg, Verizon’s chair/CEO to the show. Seidenberg said the Alltel deal takes Verizon to more than 80M wireless customers, increases coverage in several under-served areas, and allows the company to better penetrate markets across the country. He said the deal represents $9B in net present value to Verizon. Seidenberg said there are enormous growth opportunities in the company’s burgeoning FiOS Internet and TV network. Seidenberg also cited the company’s talks with Microsoft (MSFT) and Google (GOOG) over the company’s future wireless platforms and text messaging business. Next, Cramer welcomed Herbalife (HLF) chair/CEO Michael Johnson. He said the earnings forecasts were trimmed primarily because of the strong dollar, volatility in the exchange markets that make it harder to forecast profits, and a 3% sales decline in Mexico. Johnson said the fundamentals at Herbalife remain strong, and the company’s 4% dividend yield is not in any jeopardy. Cramer said he’s confident that Herbalife, which has rebounded before, will do so again. LIGHTNING ROUND: (Bullish) CPL; MCD; YUM; WIN; PKG; WFC. (Bearish) MELI; WEN; C.

Fast Money Position recap- Seymour Owns (AAPL), (BAC), (F), (MER); Pete Najarian Owns (MSFT) And Is Short (MSFT) Calls; Pete Najarian Owns (CHK) Call Spread; Pete Najarian Owns (MBI) Put Spread; Pete Najarian Owns (YHOO) And Is Short (YHOO) Calls; Macke Owns (BNI), (DIS), (UUP), (MSFT), (WMT); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (NUE), (MSFT); Finerman’s Firm Owns (DNA) Call Spreads; Finerman’s Firm Owns (MSFT); Finerman’s Firm Is Short (USO), (IYR), (IJR), (MDY), (IWM), (USO), (SPY), (RTH); Finerman’s Firm Is Short (VNO)

Market looks strong from the China stimulus package. I see basic materials and energy outperforming in the short term but watch the fade this morning. FCX, POT, MOS, AGU, MOOs, X, energy, XLB, XLE, ANR, CLF, shippers, ACH, China infrastructure plays, JOYG, BUCY.

Premarket Analysis for 11/7 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Fri, 07 Nov 2008 13:56:00 GMT

Posted By optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Friday, November 7th
WALL STREET JOURNAL: The Wall Street Journal reported that a growing number of analysts believe that because of its exposure to the deteriorating equities market, Goldman Sachs (GS) may post a loss for its fourth quarter. A spokesman for the company did not comment on the projections…FINANCIAL TIMES: Following comments by Yahoo (YHOO) CEO Jerry Yang, the Financial Times reported that Microsoft (MSFT) CEO Steve Ballmer said his company would not bid for the internet company again. While Ballmer said there were still opportunities for future partnerships, he insisted his company has no intention of resuming talks…ASSOCIATED PRESS: An Arkansas state law that enabled payday lenders to obtain high fees for short-term loans violates the state’s constitution, the Arkansas Supreme Court ruled unanimously. The state’s constitution prohibits interest rates above 17%, and the Associated Press reported that the court found the fees charged by the lenders were actually interest rates…BUSINESS WEEK: Despite the economic slowdown, putting casinos and gambling on the ropes, designer and maker of video and slot machines and video lottery terminals, WMS Industries (WMS), is reeling in fat sales and profits. However, Business Week reported that even with those fat sales and profits, the shares have slumped to $24.81, from a $41 high in February. Alan House, an analyst at Value Line says, “The big price drop as earnings rise adds to the stock’s long-term appeal.”…

Asian Markets Wrap-Up for Friday, November 7
Stocks in Asia retreated as commodity prices fell and corporations lowered profit forecasts…JAPAN: The Nikkei 225 Stock Average fell 316.14, or 3.6%, to 8,583.00, while the broader Topix Index lost 30.30, or 3.3%, to 879.00. Toyota (TM) lowered its annual profit target by 56% to Y550B or $5.64B, the lowest in nine years, and its stock dropped 9.2% to Y3,460. Honda Motor (HMC) sank 8.7% to Y2,260. Nissan Motor Co. (NSANY) slid 7.3% to Y422. Denso (DNZOY) plunged 15% to Y1,756. Mazda Motor Corp. tumbled 9.8% to Y194. Olympus (OCPNY) lost 9.3% to Y1,611. Inpex dived 8.9% to Y546,000. Mitsui & Co. (MITSY) lost 8.8% to Y943…CHINA: The CSI 300 Index gained 28.05, or 1.7%, to 1,677.83. Industrial & Commercial Bank of China rose 2.2% to 3.77 yuan. SAIC Motor added 2.7% to 5.03 yuan. FAW Car Co. was up 4.3% to 5.11 yuan. Jiangling Motors Corp. increased 3% to 6.92 yuan. China Petroleum & Chemical Corp. (SNP) climbed 0.18 yuan, or 2.7%, to 6.95. Huaneng Power International (HNP) gained 0.22 yuan, or 3.5%, to 6.54…AUSTRALIA: The S&P/ASX 200 Index fell 98.40, or 2.37%, to 4,051.30. BHP Billiton (BHP) slid 4.4% to A$27.93. Rio Tinto (RTP) tumbled 8.6% to A$72.27. Woodside Petroleum (WOPEY) sank 6.7% to A$39.80…AROUND ASIA: In Hong Kong, the Heng Seng Index advanced 453.39, or .29%, to 14,243.43…In South Korea, the Kospi gained 42.27, or 3.9%, to 1,134.49. KB Financial Group (KB) was up 2.7%. Daewoo Engineering & Construction Co. added 8.5%

Hedge fund selling adding to pressure on markets-WSJ
In two days the stock market fell about 10%. Adding to the pressure was the billions of dollars of securities that hedge funds were selling to meet cash demands. “It’s an overhang for the market,” says Merrill Lynch’s Mary Ann Bartels. Especially acute is the additional collateral requests on the $16B Citadel Investment Group by a number of key banks. The fund is down 40% this year.

Automakers plead with Democratic congressional leaders for help-WSJ
The three Detroit automakers and the UAW went to Washington and were open to conditions such as giving stock warrants to the government in return for financial aid, reports the Wall Street Journal. They met with Democratic leaders in Congress. However, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid made no promises to approve additional assistance.

“No sacred cows” says new Royal Bank of Scotland CEO-WSJ
Stephen Hester, the new CEO of the Royal Bank of Scotland (RBS), has set out to turn the bank around and intends to cut the balance sheet and its risk, reports the Wall Street Journal. That strategy is in part to support the bank’s efforts to raise nearly $24B to meet the U.K. government’s bailout requirements.

Is Goldman Sachs headed for a Q4 loss?-WSJ
Since it went public nearly a decade ago Goldman Sachs Group (GS) has never had a down quarter. Now it may, according to the Wall Street Journal, as a number of analysts say the firm’s exposure to the slumping equities market may result in a fourth quarter loss. Analysts have estimated a profit of $1.62 but are beginning to change their views. Goldman’s stock has fallen 35% in the past month and is down 62% year to date.

U.S. equity futures point to a higher open
U.S. equity futures are pointing to a higher open after two days of significant losses. The markets lost 10% of their value, recording one of the biggest two day declines ever. Investors await the much anticipated jobs report which is due out at 8:30 am. Analysts are expecting a loss of 200,000 jobs in the non-farm sector and a 65,000 loss in the manufacturing sector. The figures are released monthly and have the potential to affect the markets.

Big oil waiting to see Obama’s energy plan-WSJ
Expecting a push for environmentally friendly fuels from the Obama administration, the major oil companies are at work on how to deal with the new government, reports the Wall Street Journal. Included is a call for financial assistance for research similar to the coal industry’s aid for clean coal technology. “It’s political judo,” says Kevin Book with Friedman, Billings, Ramsey Group. “If you make a reasoned argument that your enemy can help you to your goals faster than you can get there by yourself, you might actually succeed. It’s using the weight of political opposition to your advantage.”

Analysts Initiation Summary for Friday, November 7th
MOST NOTEWORTHY: Bristol-Myers (BMY), Pfizer (PFE) and Johnson & Johnson (JNJ) were today’s noteworthy initiations: Goldman initiated Bristol-Myers with a Buy rating and $27 target as they believe it is making progress in becoming a mid-sized specialty biopharmaceutical company. The firm expects the company to be active in M&A and to spin-off or divest its slow-growth or fast-growing assets, such as virology and oncology. Goldman believes Pfizer needs a “radical transformation” and restructuring that includes a break up, spin and merger in order to outperform over the next several years. Shares were assumed with a Sell rating and $19 target. Johnson & Johnson was initiated with a Neutral rating and $65 target at Banc of America. The firm prefers to be on the sidelines given uncertainties surrounding 2009 revenue growth and the potential for negative rhetoric out of Washington on pharma costs…OTHER INITIATIONS: Acorda (ACOR) was started at RBC Capital with an Outperform rating and $30 target. Cavium Networks (CAVM) and NetLogic (NETL) were initiated with Neutral ratings at Cowen. Edwards Lifesciences (EW) was assumed with a Buy rating and $61 target at Piper Jaffray.

Analysts Downgrade Summary for Friday, November 7th
MOST NOTEWORTHY: Macquarie Infrastructure (MIC), Sanofi-Aventis (SNY) and Cleveland Cliffs (CLF) were today’s noteworthy downgrades: Jefferies downgraded Macquarie Infrastructure to Hold from Buy to reflect the company’s sensitivity to the economic slowdown and funding risk. The firm lowered their target to $9 from $40 after the company announced a dividend reduction. Sanofi-Aventis was cut to Sell from Neutral at UBS due to the company’s exposure to potential generic competition and a lack of new products. Friedman Billings downgraded Cleveland Cliffs to Market Perform from Outperform and lowered their target to $42 from $50 to reflect the risk of further production cuts…OTHER DOWNGRADES: Credit Suisse lowered Acme Packet (APKT) to Neutral from Outperform. Delta Petroleum (DPTR) was downgraded at Deutsche Bank to Sell from Hold. Siemens (SI) was downgraded to Sell from Buy at UBS.

Analysts Upgrade Summary for Friday, November 7th
MOST NOTEWORTHY: Abercrombie & Fitch (ANF), select E&P companies and Whole Foods (WFMI) were today’s noteworthy upgrades: Jefferies upgraded shares of Abercrombie & Fitch to Hold from Underperform on valuation as they with the stock down 40% since they initiated coverage on September 19. The firm maintains a $29 target. Citigroup upgraded EOG Resources (EOG), Quicksilver (KWK) and Southwestern Energy (SWN) to Buy from Hold on their belief U.S. natural gas focused E&P companies have near-term upside. Barclays upgraded Whole Foods to Equal Weight from Underweight citing the $425M private equity investment, which reduces liquidity risk, and its reduced cost structure…OTHER UPGRADES: Brandywine Realty (BDN) and AvalonBay (AVB) were upgraded to Neutral from Underperform at Merrill Lynch. tw telecom (TWTC) was upgraded to Neutral from Underweight at JP Morgan. AmeriCredit (ACF) was upgraded to Market Perform from Underperform at Friedman Billings.

Priceline.com-PCLN target lowered to $78 from $100 at Stanford
Stanford lowered their target after the company reported higher than expected EPS but significantly lowered its Q4 gross bookings guidance. The firm maintained their Buy rating.

For investors, no easy exit from private equity-WSJ
Blackstone Group (BX) yesterday made clear to its investors that they are legally committed to meet capital calls. The firm had no choice but to comply with its fiduciary duty to its shareholders and investors in its funds. Is that the way it’ll work in the future? asks the Wall Street Journal’s “Heard on the Street”. Changes that could come include shorter lockup periods or an option to take money out if needed. Or, investors could allocate fewer funds to illiquid holdings. Lower fees could follow. But no matter what, buyout firms may be looking at taking a hit in the future.

JP Morgan-JPM says ‘braced’ for increasing loan losses going forward
JP Morgan-JPM says Level 3 assets increased $1.3B in Q3
Level 3 assets increased $1.3 billion in the third quarter of 2008, largely as a result of $15.2 billion of transfers of assets into level 3, principally AAA-rated collateralized loan obligations backed by corporate loans for which liquidity decreased and market activity was limited, and $5.8 billion of purchased mortgage servicing rights related to the Washington Mutual transaction. These increases were largely offset by decreases in level 3 assets due to $12.3 billion of sales and markdowns of residential mortgage exposure and $3.5 billion of sales and markdowns of leveraged loans and transfers of similar leveraged loans to level 2 due to the increased price transparency of such assets.

Goldman Sachs, Morgan Stanley estimates lowered at JP Morgan
JP Morgan believes Goldman Sachs’ (GS) quarter is shaping up to be its worst ever since going public due to the difficult markets and marks on its private equity portfolio. JP Morgan estimates Goldman will take $2.3B of losses for its PE portfolio and lowered their Q4 estimate to (58c) from $2.02. The firm thinks Morgan Stanley (MS) will hold up better in the quarter given its smaller exposure to private but still lowered their Q4 estimate to 28c from 77c. JP Morgan maintains an Overweight rating on Goldman Sachs but thinks shares of Neutral-rated Morgan Stanley could do better in the near-term.

Treasury looks to dramatically widen scope of rescue effort-Washington Post
Government and industry officials are saying that the Treasury is working to widen its rescue effort beyond the $250B set aside for financial firms and may look to take tens of billions of dollar sin ownership stakes in companies outside the sector. The officials say the Treasury’s expanded effort could involve hundreds of billions of the $700B rescue package and details are being finalized. An announcement may not come until the end of next week “at the earliest,” as sources say the Treasury is looking to make sure President-elect Barack Obama “is on board”.

Wells Fargo-WFC target lowered to $20 from $25 at Friedman Billings
FBR believes Wells Fargo will have to raise more capital following its $11B capital raise since the company’s tangible common equity to assets ratio is just 3.3%. The firm maintains an Underperform rating.

Cleveland Cliffs-CLF downgraded to Market Perform from Outperform at Friedman Billings
Friedman Billings downgraded shares to reflect the risk of further production cuts. The firm lowered their target to $42 from $50.

Jim Cramer’s “Mad Money”
Cramer said he can’t find a catalyst to take the markets higher, after another triple-digit slide in the DJIA. He said, consumer spending is withering away, and that is evident in the earnings of company after company. Cramer said the auto industry, also a driver of growth for the economy, has died, too. With Toyota (TM) down almost 13 points Thursday, Cramer again called for a massive federal bailout of all U.S. automakers. Cramer reiterated earlier sentiments that the fate of the U.S. economy really is tied to the economies of Europe, China, Russia, and Latin America, which are also teetering on the brink of collapse. He said the foreign central bankers must slash interest rates significantly to avoid a worldwide recession. The only stocks that work, he said, are high yielding dividend stocks, recession proof names and companies trading at near their cash values. But even these companies, warned Cramer, are not immune to further declines. Cramer again recommended Caterpillar (CAT), AT&T (T) and Verizon (VZ) as some names to consider. Cramer welcomed Rick Goings, chair/CEO of Tupperware (TUP), to the show to find out why his recommendation of the stock has gone so wrong, with the stock now trading at just under $23 a share. Goings said Tupperware’s stock price doesn’t make a lot of sense, as the company beat estimates in its most recent quarter, raised its growth estimates and recently announced a stock repurchase program. He said the price of oil-based resins, which has worried analysts, account for only 17% of the company’s cost of goods sold. Cramer remains bullish on the stock. SELL BLOCK: Cramer said it’s time to put some Wall Street analysts into the block for leading investors astray in Foster Wheeler (FWLT), who recommended the shares from $80 all the way down to $23, and then suggested selling the shares. While Cramer said he doesn’t feel Foster Wheeler has bottomed, he said it’s far too late to sell the company that now trades near its cash value. Wheeler’s engineering and construction business is doing very, very well, he noted, with management citing eight potential mega deals in its pipeline. “Now is not the time to sell,” said Cramer. OUTRAGE OF THE DAY: Cramer talked with CNBC Silicon Valley correspondent Jim Goldman about Yahoo! (YHOO). Both Cramer and Goldman thought it was outrageous for CEO Jerry Yang to now say his company is interested in selling now, when he wasn’t when Microsoft (MSFT) offered to buy it at a much higher price. FINAL NOTE: Cramer said Disney (DIS) shares have finally fallen enough and he’d be a buyer. LIGHTNING ROUND: (Bullish) GS; CB; TRV. (Bearish) ABB; PFG; MFC; HIG; MET; INTC.

Fast Money position recap: Macke Owns (DIS), (BNI), (MSFT), (SDS), (UUP), (WMT); Finerman’s Firm Owns (MSFT); Finerman’s Firm Owns (OIH) Puts; Finerman’s Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY), (USO), (USO); Najarian Owns (MBI) Put Spread; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (YHOO) And Is Short (YHOO) Calls; Seymour Owns (AAPL), (BAC), (EEM), (F), (MER); Seygem Asset Management Owns (EEV).

Premarket Analysis for 11/6 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Thu, 06 Nov 2008 14:09:00 GMT

Posted by optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Thursday, November 6th
WALL STREET JOURNAL: With the Democrats soon to be fully in control of the federal government, health insurers foresee policy changes adding to their business, the Wall Street Journal reported. Included are expected to be more federal programs to cover low income children and adults, as well as growth for individual insurers…When Blackstone Group (BX) reports its third quarter earnings today they will show the effects of mark-to-market accounting which CEO Stephen Schwarzman would like to see abolished. But accounting rules have forced the firm–and others–to mark their holdings to what they would be worth if sold today, according to the Wall Street Journal’s “Ahead of the Tape”…Will it be BP (BP) who emerges as the suitor of Chesapeake Energy (CHK)? Whoever it is, option traders are running full speed to take positions in Chesapeake, the Wall Street Journal reported…

Asian Markets Wrap-up for Thursday, November 6
Stocks in a majority of Asian countries fell, after earnings outlooks by Isuzu Motors (ISUZY) and Toyota (TM) disappointed investors. JAPAN: The Nikkei 225 tumbled 6.53% to 8,899.14. Isuzu sank 21% and Toyota retreated 10% after the company reported that its 1H net income fell almost 50%. Sony (SNE) dove 11% and Canon (CAJ) retreated 13%. Energy company Inpex (IPXHY) dropped 11%. INDIA: The Sensex declined 3.81%, to 9,734.22. State Bank of India dropped 4.4%, while ICICI Bank (IBN) declined 3.9%. Tata Motors (TTM) sank 14% and Reliance Industries lost 7.8%. Housing Development Finance Corp. dropped 5.3%. AROUND ASIA: China’s CSI 300 fell 2.46%, while Taiwan’s Taiex slumped 5.71% and South Korea’s KRX 100 dove 7.28%…Credit Suisse predicted that China’s demand for construction machinery will decline in 2009.

Rumors of a Chesapeake Energy takeover spur activity-WSJ
Will it be BP (BP) who emerges as the suitor of Chesapeake Energy (CHK)? Whoever it is, option traders are running full speed to take positions in Chesapeake, reports the Wall Street Journal. According to Track Data, trading in the company soared to three times the normal level. Investors picked up 179,000 calls that allow them to purchase Chesapeake’s stock, and 43,000 puts that allow them to sell it. Neither company is talking.

FDA facing overhaul-WSJ
Drug makers are on full alert as new leadership will soon take over at the FDA. It is expected to be a lot tougher on drug makers, from approval of drugs to how they are advertised to the public, reports the Wall Street Journal.

Treasury aside, investors want to know who’ll run the SEC-WSJ
In the long run whoever is picked to head the SEC may be just as important as to who runs the Treasury Department, points out the Wall Street Journal’s “Heard on the Street”. That person will be counted on to promote investor’s interests. But a cloud hangs over the agency which could be absorbed under a “super-regulator”. That’s why a strong leader is needed to champion the SEC.

Bank of England reduces bank rate by 1.5 percentage points to 3%
The Bank of England’s Monetary Policy Committee voted to reduce the official Bank Rate paid on commercial bank reserves by 1.5 percentage points to 3%. The Bank said, “The past two months have seen a substantial downward shift in the prospects for inflation in the United Kingdom. There has been a very marked deterioration in the outlook for economic activity at home and abroad. Moreover, commodity prices have fallen sharply.

U.S. equity futures continue to point to a lower open
U.S. equity futures continue to point to a lower open. The futures were lifted off their lows for a brief time when the Bank of England lowered their key interest rate by 150 basis points and the ECB lowered their rate by 50 basis points. Tech bellwether Cisco Systems (CSCO) reported quarterly earnings last night but gave poor guidance going forward. Their statements about business spending over the next year caused the futures to trade lower overnight adding to yesterday’s poor close in the market averages. But the futures rallied after the BOE lowered their rates and hinted there were more rate cuts to come.

Analysts Upgrade Summary for Thursday, November 6th
MOST NOTEWORTHY: Sovereign Bancorp (SOV), Whole Foods (WFMI) and Max Capital (MXGL) were today’s noteworthy upgrades: Citigroup upgraded shares of Sovereign Bancorp to Buy from Hold on their belief Sovereign will merge with Banco Santander (STD) according to the terms on their October 13 agreement. Jefferies upgraded Whole Foods to Hold from Underperform on valuation as they believe the capital infusion from Leonard Green limits downside risk. The company’s target was raised to $11 from $9.50. Banc of America upgraded Max Capital to Buy from Neutral on valuation, the company’s strategic changes to lower earnings volatility and their belief it is well positioned to benefit from an improved P&C marketplace…OTHER UPGRADES: Qimonda (QI) was upgraded to Neutral from Underperform at Cowen. Health Net (HNT) was raised to Neutral from Sell at Goldman. Parkway Properties (PKY) was lifted to Market Perform from Underperform at Wachovia.

Analysts Downgrade Summary for Thursday, November 6th
MOST NOTEWORTHY: News Corp (NWS.A), EnerSys (ENS) and Syniverse (SVR) were today’s noteworthy downgrades: JP Morgan does not expect News Corp to outperform its peers due to its asset mix, which makes it more vulnerable to macroeconomic pressures. Shares were cut to Neutral from Overweight. Jefferies downgraded shares of EnerSys to Hold from Buy as they believe the company’s lower than expected Q3 guidance suggests that rapid demand deterioration could continue near-term. The firm lowered their target to $11 from $35. Baird downgraded Syniverse to Neutral from Outperform citing Sprint (S) and Alltel’s decision to in-source mobile data roaming, which will impact 2009 revenue by $28M, and worse than expected Verizon (VZ) contract renewal pricing. The company’s target was lowered to $16 from $21…OTHER DOWNGRADES: Liberty International (LBYIY) was downgraded to Underweight from Equal Weight at Morgan Stanley. General Growth Properties (GGP) was lowered to Neutral from Buy at UBS. Capital Source (CSE) was downgraded at JMP Securities to Market Perform from Outperform.

Analysts Initiation Summary for Thursday, November 6th
MOST NOTEWORTHY: Gilead Sciences (GILD), Adobe (ADBE) and NuStar Energy (NS) were today’s noteworthy initiations: Gilead Sciences was assumed with an Outperform rating at Wachovia. Adobe was initiated at Thomas Weisel with an Overweight rating and $34 target. Morgan Stanley started NuStar Energy with an Equal Weight rating and $49 target…OTHER INITIATIONS: Optimer Prime (OPTR) was initiated at Rodman & Renshaw with an Outperform rating. Deutsche Bank initiated H&E Equipment (HEES) with a Hold rating and $9 target. Merchant Bancshares (MBVT) was assumed with a Market Perform rating and $23 target at Keefe Bruyette.

China considering major stimulus package-Nikkei
China’s state council has sent a report to the government urging it to boost the country’s economy with a major stimulus package. No figures were available.

S&P 500-SPX: Pivot Points
The following are the pivot points for the SPX. Pivot High: 977.305, Pivot Low: 925.325. 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. :

AMBAC Fin’l-ABK responds to Moody’s rating action
Ambac Financial Group commented on Moody’s announcement that is has downgraded the rating of Ambac Assurance Corporation (AAC) from Aa3 to Baa1, developing outlook. David W. Wallis, President and Chief Executive Officer commented, “It appears that this rating action has been precipitated by our earnings announcement. It is disappointing that Moody’s has come to a ratings conclusion without the benefit of completing its own analysis of our portfolio.”

Yahoo’s Yang open to new deal with Microsoft-UK Times
With its ad deal with Google (GOOG) in shambles, Yahoo (YHOO) CEO Jerry Yang says he now is open to a new bid from Microsoft (MSFT). Yang told the Web 2.0 conference: “To this day, I would say that the best thing for Microsoft to do would be to buy Yahoo.. Did we want to do the deal? Yes.”

Goldman Sachs-GS estimates and target lowered at Morgan Stanley
Morgan Stanley expects GS to report a Q4 loss due to the severe decline in global equity indexes which will result in writedowns in its principal investment portfolio. The analyst lowered its Q4 EPS estimate to ($1.09) from $3.21, FY09 EPS estimate to $9.40 from $14.19, and 2010 to $13.17 from $17. Shares are Overweight rated. Price target to $152 from $185.

Jim Cramer’s “Mad Money”
Wednesday’s “Mad Money” show had Cramer outlining a plan for President-elect Barack Obama to fix the struggling economy. Cramer said the first steps to turn the economy around are unfortunately beyond our control. Ahead of what is sure to be a awful unemployment number on Friday, Cramer said the European and Asian central banks must cut interest rates. Cramer said Obama’s first step should be to fix the ailing auto industry. He said a major federal bailout, similar to that of AIG (AIG), will be needed. Cramer says, the government should buy huge chunks of both common and preferred shares in General Motors (GM), Ford (F) and Chrysler (DCX) to stabilize their stock prices and secure the companies’ corporate debt until structural changes can be made. Second, Obama needs to solve the country’s energy independence problem, by mandating the U.S. automakers to make natural gas vehicles and encourage the oil industry to use tax credits to open natural gas fueling stations. Finally, Cramer said the country must fix the housing crisis. Cramer says the remaining $400B in the TARP program should be used to buy 1.3M homes in the hardest hit areas of the country. The government then can offer these homes to Americans for low down payments and fixed 5% mortgages. With these steps, Cramer said any president could easily fix the country’s problems in his first 100 days. Next, Cramer talked with David Novak, president, chair/CEO of Yum Brands (YUM). Despite reporting better earnings and same-store sales growth on Oct. 8, concerns over declining margins in China have sent the stock lower. Novak said Yum! Brands has well established brands that are well positioned for this troubled economy. He emphasized the opportunities in China are still staggering, despite the declining margins due to unprecedented food inflation. Novak was also upbeat regarding several new products and initiatives for all of the company’s chains. Cramer said he’s still a fan of Yum! Brands, but recommended waiting for the company’s dividend yield to hit 3% before buying. Cramer also checked in with Jim Rogers, CEO of Duke Energy (DUK). Rogers said Duke is already the country’s third largest generator of electricity using nuclear power, and the company is making sizable investments in both wind and solar energy. He said the recent earnings shortfall was mainly due to storm-related costs from Hurricane Ike and increased mark-to-market costs associated with the company’s hedging and not from operations. Cramer called Duke a smart company and a good play in the energy patch. LIGHTNING ROUND: (Bullish) JNJ; KCI; CAT. (Bearish) NOK; TMO; HIG; ACM.

The market is down hard from yesterday and is pricing in a bad employment report tomorrow so be nimble today and protect longs and look for shorts. The Vix is the indicator to watch. see you in the trading room for a look at some short prospects.

Premarket Analysis for 11/5 - Upgrades/Downgrades, Gappers, Actionable Calls

OptionDragon — Wed, 05 Nov 2008 14:28:00 GMT

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.