Bought GE, BAC, and TRN calls yesterday
So far, so good
added GERN and HOKU calls as well
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Comtex SmarTrend(R) Morning Call -- November 25, 2008
10 minutes ago - Comtex Smartrend(r)
Related Companies
Symbol Last %Chg
AEO 8.44 1.02%
AA 9.54 4.26%
ALO 35.80 -1.08%
AXP 21.14 -0.21%
ADI 17.45 -3.96%
As of 9:49 AM ET 11/25/08
The renewed lease on life for Citigroup (NYSE:C) convinced enough investors that there was some gold left in equities and the market indices jumped up again yesterday. Over the last two trading days the DJIA climbed 891 points, a new record. All the SmarTrend(R) indicators are moving up, signaling the multi-day rally should continue, driving the DJIA up close to the 9,500 level, but not before the market cools its jets this morning.
After five straight, and rare, days of polarized bias to the downside, the daily SmarTrend(R) uptrends to downtrends shifted to the positive side of the ledger and came in at 40:10. Not huge but this turnaround provided impetus to the IBDI and Trend Ratio, both climbing upward. The IBDI is now out of oversold territory and the Trend Ratio is headed that way. This is a preliminary confirmation of the prior sign that an intermediate-term uptrend would begin soon. And it is a welcome sign for stock buyers who are looking for the long-term downtrend, now a year old, to bottom out. There is a better than even chance now that the bottom has been seen at the DJIA 8,000 level. However, confirmation of this bottom will require at least another month and could come later in 2009.
In the meantime, the near-term uptrend, with a boost from an emerging intermediate-term uptrend, is off and running. All four near-term trend indicators have climbed out of their oversold zones and are headed north. An acid test will occur when and if the near-term uptrend, with a little help, can enable the DJIA to rise above 9,500. The near-term uptrend, by itself, appears to be on a course to drive the DJIA to at least the 9,200 level by the first of next month.
The trade-term uptrend could carry the DJIA up above 9,500 as the near-term uptrend exhausts itself. Besides the obvious relief provided by this rally, the height reached before the next near-term top is found, in substantial measure, will define just how solid is the bottom at DJIA 8,000. Since October 10 the DJIA has bounced up and down off this floor of support. Volatility has abated somewhat, likely to due to stabilizing credit availability; however this slight volatility diminishment merely removes some uncertainty about a potential financial collapse, enabling investors to focus now on the recession. Various new economic reports are forthcoming today and they are discussed below. The outlook remains broadly pessimistic, just the right paradoxical atmosphere for the multi-day rally to resume after a few hours of cooling off from the rocket launchings of the last two trading sessions. Look for more stocks to switch to uptrends today by clicking on mysmartrend.com.
After presiding over a remarkably disciplined campaign, President-elect Obama assured Wall Street his methods would continue during his White House tenure. Responding to the recent confidence destruction within financial markets, he put forth a team of veterans, led by Geithner as Treasury Secretary and Summers at the White House, perceived as combining both operational and conceptual skills. Responding to worried consumers, he also advanced a stimulus package worth as much as $700 billion over the next two years with 2.5 million new jobs added by 2011. Investors countered with resounding approval, sending DJIA shares up 4.9%, or 397 points, a rise of nearly 900 points, or 11.8%, over the past two days, for its largest-ever point gain. Over the same period the S&P has gained 13.2% and the Nasdaq 11.9%. At the same time the old Washington team stepped in to avert the failure of Citigroup (NYSE:C), guaranteeing more than $306 billion of its toxic debt, and injecting $20 billion in capital from TARP in exchange for a stake in the firm. Traders argued whether the rally would be short-lived, and whether or not the impetus was provided by short-sellers' covering or bargain hunters' buying. Regardless, the two-day move marked the largest advance since 1987. All but one DJIA component closed higher; and only 35 issues of the S&P 500 ended in the minus column. Today's action may well hinge on the combined efforts of the Treasury and Fed to assist consumer finance markets through use of a lending program utilizing TARP funds. A 10:00 AM ET Paulson's news conference may spotlight the plan's unveiling, bringing Santa to the Street.
NYSE volume remained relatively heavy as 2 billion shares changed hands and advancing issues outpaced declining ones nearly eight-to-one. Financial sector shares led the charge, up 13.2% on the day, although all S&P sectors closed higher. Within the DJIA, Citigroup (NYSE:C) shares topped the list, up 57.8%, nearly reversing last week's decline. On the DJIA, Bank of America (NYSE:BAC) jumped 27.2%; JP Morgan (NYSE:JPM) 21.4%, and American Express (NYSE:AXP) 13.3%. The Dow Jones-AIG, broad-based index of commodity prices jumped over 5%. Energy sector shares, rising 6.7%, gained on a rise in crude prices, up $4.50 Monday to close at $54.43. Analysts expect OPEC to cut production levels as soon as this week at its Cairo meeting. Material shares rose 5.5%, with DJIA component, Alcoa (NYSE:AA) up 8.4%, and Freeport-McMoran (NYSE:FCX) up 13.4%. Nevertheless, traders remained a nervous lot, and the US dollar index against a basket of currencies fell 1.8%.
Housing shares rallied on hopes for Obama's promised help for homeowners and perhaps for the success of industry lobbyists' "Fix Housing First" campaign to raise $250 billion. Centex (NYSE:CTX) shares tacked on 27% and Lennar's (NYSE:LEN) rose 25.8%, despite more adverse housing news. According to National Association of Realtors' figures, existing home sales in October dropped 3.1% from September, as median home prices fell the most since record-keeping began in 1969, down 11.4% to $183,300, with sales lower throughout all regions. Retail shares, recently shunned as front-end victims of consumer caution, rallied as bargain hunters circled. However, Wal-Mart (NYSE:WMT) shares, previously a beneficiary of the money-tight consumer, suffered as higher-end firms found interest, and as their online advertising circular for Black Friday advised the firm will match local competition's prices. Among the sharpest gainers, JC Penney (NYSE:JCP) rose 16.4%, Macy's (NYSE:M) 16.2%, and Saks (NYSE:SKS) 12.4%.
Tuesday's markets face the digestion of the prior days' surge amid mixed corporate news: on the plus side from Hewlett-Packard (NYSE:HPQ) and Apple (NASDAQ:AAPL), and on the negative from Google (NASDAQ:GOOG), Analog Devices (NYSE:ADI), Starbucks (NASDAQ:SBUX) and Campbell Soup (NYSE:CPB). Among economic items of note: third quarter revised GDP numbers are expected to post off 0.3%; however, a negative surprise may be forthcoming. Personal consumption is expected off 3.1%. November consumer confidence is expected to edge higher to 40.0 from 38.0 prior. Among companies to report results are: American Eagle (NYSE:AEO), Chico's FAS (NYSE:CHS), and Hormel foods (NYSE:HRL).
Within the corporate corner, Hewlett-Packard (NYSE:HPQ) topped Street estimates for its fiscal first quarter by two cents, posting at $1.03 on revenues of $33.6 billion after yesterday's close. The firm reaffirmed its fiscal first quarter projection of 93-95 cents on revenues within a range of $32.0-$32.5 billion, up from consensus estimates of 91 cents, as well as its fiscal 2009 estimate of $3.88-$4.03 on revenues of $127.5-$130 billion, well ahead of Wall Street expectations of $3.80... JP Morgan (NYSE:JPM) cited accelerating sales growth from Apple's (NASDAQ:AAPL) notebook computers, and increased its 2009 profit estimates for the company...Campbell Soup's (NYSE:CPB) quarterly numbers printed ahead of estimates; however, the company's full-year outlook disappointed. The company blamed the adverse currency impact... Bernstein lowered its Google (NASDAQ:GOOG) price target 28.6% to $400, as advertising budgets continue to shrink... King Pharma (NYSE:KG) announced intentions to purchase Alpharma (NYSE:ALO) for $37 per share in cash, or $1.6 billion... Johnson & Johnson (NYSE:JNJ) offered $25 per share for Omrix Biopharmaceuticals (NASDAQ:OMRI), an 18% premium to Friday's closing price... Anheuser Busch-Inbev (EBR:INB) launched an $8.2 billion rights offering Monday at nearly a 70% discount to current share prices... Rio Tinto (NYSE:RTP) shares floundered in overseas trade this morning after BHP Billiton (NYSE:BHP) blamed the sharp fall in commodity prices for its decision to walk away from its $66 billion hostile bid for the firm... Analog Devices (NYSE:ADI) reported estimate-topping fourth quarter results of 49 cents ex-items, beating consensus estimates of 44 cents; however, the firm issued downside fiscal first quarter guidance of 22-23 cents ex-items, widely missing Street estimates of 35 cents... A Starbucks (NASDAQ:SBUX) regulatory filing revealed the firm expects negative same-store-sales in fiscal 2009, and results hampered by lease termination and severance charges from store closings in the US and Australia... American Eagle (NYSE:AEO) posted a same-store-sales drop of 7% for the quarter as adjusted returns fell to 30 cents versus 45 cents... Chico's FAS (NYSE:CHS) reported profits of 1 penny in its third quarter versus 13 cents a year ago, but topping consensus estimates of a 2 penny loss... DR Horton's (NYSE:DHI) losses exceeded expectations on the Street of $1.87, printing at a loss of $2.53 versus a 16 cent loss a year earlier... Hormel (NYSE:HML) reported estimate-topping fiscal fourth quarter numbers of 50 cents down from 73 cents last year, but 2 cents higher than expected. The firm hiked its dividend to 76 cents from 74 cents and issued full-year guidance of $2.15-$2.25 up from estimates of $2.06...
By Chip Brian, Editor-in-Chief, Comtex news Network
www.Comtex.com -- editor@mysmartrend.com
The following equities mentioned above include:
Comtex SmarTrend Alert
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Ticker Last Close Trend Direction Trend Price Trend Date
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AA 9.15 Downtrend 38.35 6/20/2008
AAPL 92.95 Downtrend 91.79 11/12/2008
AEO 8.35 Downtrend 13.33 10/6/2008
ADI 18.17 Downtrend 30.61 8/20/2008
ALO 36.19 Uptrend 34.60 11/18/2008
AXP 21.18 Downtrend 22.04 11/11/2008
BAC 14.59 Downtrend 28.62 10/7/2008
BHP 33.42 Downtrend 34.53 11/12/2008
C 5.95 Downtrend 14.52 10/21/2008
CPB 33.40 Uptrend 38.63 10/29/2008
CTX 7.00 Downtrend 9.68 11/12/2008
CHS 2.36 Downtrend 5.90 9/24/2008
DHI 5.00 Downtrend 5.42 11/19/2008
FCX 21.92 Downtrend 65.48 9/26/2008
GOOG 257.44 Downtrend 527.13 6/27/2008
HPQ 35.70 Downtrend 33.10 11/11/2008
HRL 29.24 Downtrend 35.10 8/11/2008
JPM 27.58 Downtrend 35.40 11/12/2008
JCP 17.57 Downtrend 19.59 11/11/2008
JNJ 59.11 Downtrend 60.56 10/24/2008
KG 9.30 Downtrend 8.14 11/20/2008
LEN 4.54 Downtrend 6.25 11/13/2008
M 6.60 Downtrend 8.39 11/13/2008
OMRI 24.79 Uptrend 17.33 10/31/2008
RTP 145.99 Downtrend 171.20 11/6/2008
SBUX 8.45 Downtrend 10.50 11/10/2008
SKS 3.35 Downtrend 9.75 9/17/2008
WMT 52.77 Downtrend 58.92 9/24/2008
INX -- S&P 500: 852
Lo: 801 Hi: 866
Change: +51.78
mysmartrend.com
INDU -- DOW JONES: 8,443
Lo: 8,048 Hi: 8,599
Change: +396.97
mysmartrend.com
QQQQ -- NASDAQ: 1,472
Lo: 1,384 Hi: 1,480
Change: +87.67
mysmartrend.com
This report is divided into three sections. The first deals with our 5 proprietary market indicators, the second section examines important economic and business happenings which are expected to affect U.S. Stock market movements and the third section describes specific company announcement and earnings releases. Experience demonstrates that when these 5 indicators reach extremes they can shortly be expected to change direction and move in the opposite direction. When such happens in all or most of the 5 indicators, on or about the same time, followed by a move from below an extreme (oversold) to above that extreme (or vice versa for overbought), a change in market direction is very probable. The near term market moves are measured to identify the best possible returns for traders/investors. Daily price/volume examinations provide the best data upon which to base such forecasts. In this report though, intraday indicators are examined to improve the point of entry timing for the expected move.
Comtex News Network, Inc. is not a registered investment advisor and does not provide investment advice. Investors bear complete responsibility for their own investment research and decisions and should seek the advice of a qualified investment professional prior to making investment decisions. SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright, Comtex News Network, Inc. 2008
Comtex News Network, Inc. ("Comtex") obtains information from sources deemed to be reliable; however, Comtex does not guarantee the accuracy of any of the information or commentary provided. Comtex makes no warranties, expressed or implied, as to the fitness of the information for any purpose, or to results obtained by individuals using the information. In no event shall Comtex be liable for direct, indirect, or incidental damages resulting from the use of the information. Comtex shall be indemnified and held harmless from any actions, claims, proceedings, or liabilities with respect to the information and its use. Comtex does not make specific trading recommendations or provide individualized market advice. The information contained in the Morning Call product is provided as an information service only.
To subscribe to this newsletter, please visit mysmartrend.com . To learn more about SmarTrend, go to mysmartrend.com or call Comtex sales at (212) 688-6240. |
