Tuesday, June 30, 2009
OSK
Oshkosh Truck is being awarded a $1,055,910,053 contract - Dept of Defense. FRPT Force Protection drops sharply (currently 6.75) following news headlines that OSK won the contract for blast-proof trucks.
SQNM
SQNM Received written notification that the Securities and Exchange Commission has initiated an investigation relating to its April 29, 2009 announcement regarding co's SEQureDx Down syndrome test.
SPPI
SPPI's Zevalin, a first line consolidation therapy for non-Hodgkin's Lymphoma, has a PDUFA on July 2.
FRPT
The Department of Defense is expected to award its Military-All-Terrain-Vehicle contract after the close today. FRPT call option volume of 10,048 contracts compares to put volume 1,865 contracts. July option implied volatility is at 167, above its 26-week average of 97. Large movement is anticipated
QQQQ
Trading action now has the NQ (QQQQ) getting pressed to new session lows without peers ES (SPY) and YM (DIA) 60 min. trendline support in play.
NVAX
Novavax announces Spanish government selects Novavax's VLP Technology for comprehensive flu vaccine solution in Spain.
SDS
I missed this strong +0.50 thrust higher. $TRIN at 1.40 and A/D -386, so Short is the way to go for now (SDS). Today's Daily Pivot at 923.80 comes into play on this SPX drop.
XCO
KeyBanc notes yesterday Exco Resources (XCO) announced that it has reached an agreement to sell certain oil and gas properties in the Mid-Continent and Texas region to Encore Acquisition (EAC) for $375.0 mln in cash.
Monday, June 29, 2009
Markets
The market looks a little short-term "overbought" here into month/qtr-end tomorrow, with a relatively narrow choppy session. The SPX is closing up for a 5th day in a row within a series of 4 higher highs and higher lows. The professionals continue to chase the market. I will probably attemp to short the market again tomorrow.
Volatility
The VIX set a new 9-month low today, moving to levels not seen since the collapse of Lehman Brothers. The VIX is currently (-0.54%) at 25.39
SDS
Buying SDS $54.60, Risking $0.20. SPY (ES) just broke through the lower end of an intraday sideways channel to new afternoon lows.
PEGA
Its software helps companies cut costs, so demand for PEGA's products has held up well as clients look to improve efficiencies in the tough economic environment. The stock doesn't have much analyst coverage, and despite its following among traders, many investors may still not be familiar with the story behind this explosive stock. "Pegasystems is another example of a niche software provider that is producing stellar results in a weak macro environment. The company's Business Process Management software products help other companies in their cost-cutting efforts, making it easy for businesses to automate complex processes such as credit card disputes, healthcare member enrollment and insurance underwriting. While some of the company's biggest customers are large financial institutions and insurance companies, these customers find it beneficial to use PEGA's software to improve efficiencies amid the weak operating environment"
Markets
The stock market continues to move sideways.
The Dow is sporting a modest lead over its counterparts. The blue-chip index is being led by shares of integrated energy giants Exxon Mobil XOM and Chevron CVX, which are being helped by higher oil prices. Oil was last quoted at $71.30 per barrel, up 3.1%.
Markets
Market internals are moderately bullish with $TRIN at 0.64 and the A/D line at +786. Buyers are "chasing" prices here with the SPX trading higher a fifth consecutive day; the 930 area could be the limit.
I am ready to position myself on the short side (SDS) for a pending correction from this 930 area.
I am ready to position myself on the short side (SDS) for a pending correction from this 930 area.
Sectors
Leading Sector ETFs:
RBOB gas futures- UGA +3%, Crude/WTI oil- USO +2.5%, OIL +2.5%, Ag/chem- MOO +2%, Heating oil futures- UHN +2%, SPDRS metals/mining- XME +2%, Energy- IYE +2%, XLE +2%, Oil HLDRS- OIH +1.5%, Solar- TAN +2%, KWT +1%, Commods.- DBC +1%, GSG +1.5%, SPDRS industrials- XLI +1.5%, iShares transports- IYT +1.5%, Steel- SLX +1%
RBOB gas futures- UGA +3%, Crude/WTI oil- USO +2.5%, OIL +2.5%, Ag/chem- MOO +2%, Heating oil futures- UHN +2%, SPDRS metals/mining- XME +2%, Energy- IYE +2%, XLE +2%, Oil HLDRS- OIH +1.5%, Solar- TAN +2%, KWT +1%, Commods.- DBC +1%, GSG +1.5%, SPDRS industrials- XLI +1.5%, iShares transports- IYT +1.5%, Steel- SLX +1%
TRW
JP Morgan upgraded TRW to Overweight from Neutral as the recent credit facility amendment resulted in sizable covenant ratio headroom and no reduction to (large) revolver capacity, making TRW a clear survivor. TRW,TEN offer best risk-reward; see poorest risk-reward on LEA, AXL, DAN.
SLM
SLM +9.2% (tgt raised to $16 at FBR Capital due to improving student loan spreads and increased earnings potential)
Markets
There's a quarter end mark up in effect, as funds add positions in good performing stocks that they use to window dress their balance sheets. We may see the selling of positions right after quarter end. Q1 will be a difficult act to follow for earnings relative to estimates. Positive estimates and Q1 performance was largely helped through cost-cutting, and government intervention which can't really be replicated in Q2.
Friday, June 26, 2009
Russell reconstitution brings volatility
A number of the new additions are making sharp moves higher on heavy volume already today, including BWEN (+32%), MTXX (+18%), TZOO (+18%), RAE (+17%), KIRK (+12%), DDRX (+10%), YORW (+7%). In addition to these big gainers, a larger number of new additions are seeing significant moves but to a lesser degree, including BDSI, BIOS, CCF, CGA, CIZN, CSII, CTGX, CXM, DTPI, ELOY, ESBF, EML, FC, GABC, GIW, GOOD, GSIT, HGRD, HTCO, ISRL, LCI, MEMS, MIGP, MLR, OPEN, PRTS, PZG, RAE, RDI, SENEA, SMP, SPPI, UVE and ZN.
Russell 3000 Rebalance
There are a large number of additions/deletions taking place tomorrow, with 430 changes in the Russell 3000 Index. There are 276 additions and 154 deletions, as stocks deleted between reconstitutions are not replaced. Among the nine sectors, health care shows a net addition of 52 stocks, including 24 pharmaceuticals, while energy shows a net decrease of 14 stocks, including 10 non-renewable energy stocks. However, the financial services sector leads both the list of additions (+69) and list of deletions (-39). Most of the deletions from the Russell 3000 will drop into the Russell Microcap Index.
Sectors
Leading Sector ETFs:
Coal- KOL +2%, Steel- SLX +1.5%, Wind energy- FAN +1.5%, SPDRS metals/mining- XME +1%, Dry-bulk shippers- SEA +1%, iShares broker/dealers- IAI +1%, Silver- SLV +1%, Semis- SMH +.5%, IGW +.5%, iShares basic mat- IYM +.5%, SPDRS retaielrs- XRT +.5%
Lagging Sector ETFs:
Nat gas- UNG -2.5%, RBOB gas futures- UGA -2%, Crude/WTI oil- USO -1.5%, OIL -1.5%, Commodities- GSG -1.5%, DBC -1%, Base metals- DBB -1.5%, SPDRS homebuilders- XHB -1%, Insurers- KIE -1%, Comm banks- KBE -1%, Reg banks- KRE -1%, iShares transports- IYT -.5%
Coal- KOL +2%, Steel- SLX +1.5%, Wind energy- FAN +1.5%, SPDRS metals/mining- XME +1%, Dry-bulk shippers- SEA +1%, iShares broker/dealers- IAI +1%, Silver- SLV +1%, Semis- SMH +.5%, IGW +.5%, iShares basic mat- IYM +.5%, SPDRS retaielrs- XRT +.5%
Lagging Sector ETFs:
Nat gas- UNG -2.5%, RBOB gas futures- UGA -2%, Crude/WTI oil- USO -1.5%, OIL -1.5%, Commodities- GSG -1.5%, DBC -1%, Base metals- DBB -1.5%, SPDRS homebuilders- XHB -1%, Insurers- KIE -1%, Comm banks- KBE -1%, Reg banks- KRE -1%, iShares transports- IYT -.5%
Pre Market
Gapping up: PALM +14.1%, BORL +7.8%, VRNM +7.1%, SMSC +6.3%, TIBX +5.9%, ACN +4.9%, CS +2.0%, NOK +2.0%, GE +1.2%... Gapping down: POT -7.0%, SNY -3.3%, UBS -3.2%, MU -3.2%,
Thursday, June 25, 2009
10:00 am Reversal Time
Strong auction for the bond market; support for equities
7-year Note Auction Results: Bid/Cover 2.82x (4 auction avg 2.28x); High Yield 3.329% (expectations were 3.36%); Indirect Bidders 67.2% (avg 32.8%)
Markets
Solid push off the low has been extended into midday with the index testing Monday's high at 918. Important short term resistance at 927/928. The VIX is down 2.0 at 27.02
LM - pull back
Activist investor Nelson Peltz has not accumulated new stake in Legg Mason, according to WSJ.
Sectors
Relative strength in Finance XLF/RKH, Energy XLE/OIH, Housing XHB, Commodity CRX, Shipping SEA, Solar TAN, Steel SLX
Sectors
SPDRS homebuilders- XHB +3%, Nat gas- UNG +2%, SPDRS retailers- XRT +2%, RBOB gas futures- UGA +1.5%, Coal- KOL +1.5%, Oil HLDRS- OIH +1.5%, Crude/WTI oil- USO +1%, OIL +1%, iShares transports- IYT +1%, Ag futures- DBA +.5%
Economic Calendar
Released on 6/25/2009 8:30:00 AM For Q1:09
Prior | Consensus | Consensus Range | Actual | |
New Claims - Level | 608 K | 613 K | 595 K to 615 K | 627 K |
|
Wednesday, June 24, 2009
Price Volume (PVTM)
LM $24.50 (+10.3%) - AM $9.50 (+47.8%) - AGM $$5.04 (+10.2%) - SQNM $3.95 (+9.1%) - SLE $9.36 (+ 3%) - SONC $9.85 (+12%)
Commodities
Strength in the dollar following both the Treasury auction and the FOMC release put the breaks on positive momentum in commodities for today's session.
Outlook
Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
FOMC
The markets will turn their attention to the FOMC announcement scheduled for 2:15pm. The key issues that people will be watching for are if the Fed plans on expanding its $300 bln bond purchase program and any comments offsetting a growing belief that they may need to raise rates by the end of the year to contain inflation.
Leading Sector ETFs
Steel- SLX +4%, Solar- TAN +4%, KWT +2.6%, Coal- KOL +4.5%, Dry-bulk shippers- SEA +4%, Ag/chem- MOO +3.5%, Base metals- DBB +3%, SPDRS metals/mining- XME +3%, Heating oil futures- UHN +2.5%, Clean energy- PBW +2%, Semis- IGW +2%, SMH +1.5%, Gold miners- GDX +2%
Durable Goods Orders
Released on 6/24/2009 8:30:00 AM For May, 2009
Prior | Consensus | Consensus Range | Actual | |
Ex-transportation - M/M | 0.8 % | 1.1 % | ||
Ex-transportation - Yr/Yr | -22.4 % | |||
New Orders - M/M change | 1.9 % | -0.5 % | -2.0 % to 1.0 % | 1.8 % |
New Orders - Yr/Yr Change | -23.3 % |
Tuesday, June 23, 2009
HUN - "Trading Halted"
Credit Suisse (CS) and Deutsche Bank (DB) announce they have entered into an agreement with Huntsman (HUN) $6.29, to end all litigation among Credit Suisse, Deutsche Bank and their affiliates and Huntsman. Credit Suisse and Deutsche Bank have chosen to resolve the matter for $316 mln each.
Technicals
The fact that the S&P 500 took out both its 50-day and 200-day simple moving averages yesterday, reinforces the bearish bias in the market.
Markets
Equity markets are in "distribution mode" right now. Funds that were early to the rally are taking profits into quarter-end, and those who were late and chased the rally are getting shaken out.
The fact that the bears are back in control was clearly evident yesterday, as the S&P 500 didn't even attempt to hold the strong support level near 900, and following a few weak mid-day rally attempts, the bears were able to send the major averages down to their lows at the close.
The fact that the bears are back in control was clearly evident yesterday, as the S&P 500 didn't even attempt to hold the strong support level near 900, and following a few weak mid-day rally attempts, the bears were able to send the major averages down to their lows at the close.
Housing
Existing home sales for May increased 2.4% from April to an annualized rate of 4.77 million units. That was slightly below the consensus estimate of 4.82 million
Monday, June 22, 2009
Technology Stocks Sell Off
Aggressive breakdowns below the 50-day simple moving averages is usually interpreted as a lack of "institutional" buying, suggesting a bigger picture "trend change" in the works. Trading below their 50-day sma's include: AMZN, ADSK, AKAM, CTSH, CSCO, EBAY, FSLR, FMCN, GOOG, INTC, JNPR, KLAC, MCHP, NVDA, RIMM, RHT, SINA, SNDA, SYMC, VCLK, YHOO.
SVA
Sinovac Bioteh, Co announces that it received the first order in China to supply its influenza A (H1N1) vaccine to the Beijing government. ($3.90)
XLF
The Financial index has dropped to a new low of 11.67, approaching its 50 day sma/ema at 11.64/11.50.
Q
Hudson Square Research initiates Q with a Buy and a tgt of $6 as the firm believes that Q's shares are very attractive on both an absolute basis, relative to the other telecom stocks that the firm covers, and is one of the least expensive in the US telecom industry on all of the valuation metrics.
SPX
S&P tests the 900 level, which marks the intersection between two key measures of support: 1) the downward-sloping 200-day sma at 900, 2) the rising 50-day sma at 899
Technicals
The SPX (921.23) ended the final session of the week and the June expiration period with marginal gains in sideways trading action. NYSE volume experienced a surge of nearly +90% compared to the previous session with most of it attributed to 'quad witching' expiration of stock and index options.
Index futures are currently signalling a moderately lower start to begin the new trading week.
Index futures are currently signalling a moderately lower start to begin the new trading week.
Friday, June 19, 2009
FIG
Stock in a tight range all day ($3.78) near 50 Day EMA support. Chinese Sovereign Wealth Fund is pumping money back into hedge funds/private equity according with WSJ story.
Sector ETF % Gainers
Solar- KWT +3%, TAN +2%, Clean enrgy- PBW +2.5%, Coal- KOL +2%, SPDRS metals/mining- XME +2%, Gold miners- GDX +2%, Ag/chem- MOO +1.5%, iShares transports- IYT +1.5%, iShares basic mat- IYM +1.5%
Sectors
Sector ETF Leading % Decliners:
SPDRS utilities- XLU -2%, SPDRS cons stpls- XLP -.5%, US Dollar index- UUP -.5%
SPDRS utilities- XLU -2%, SPDRS cons stpls- XLP -.5%, US Dollar index- UUP -.5%
In Play
Today is a Quarterly Expiration, which I try to avoid trading as much as possible, however, greed seems to back in the market with this large gap up. If I trade, I will short the Nasdaq 100 (QID) and the financials (SKF).
Technical Note
First technical resistance for the SPX is a decisive move above yesterday's high crossing point and the correlating 20-day exponential moving average @ 921/922.
Stronger resistance at the downward 8-day moving average @ 931.
First technical support for price is a pullback to the 200-day moving average/Jun. low @ 904 through the 900 level. The 50 day SMA in the 895 zone represents the next key levels of support for the index.
Stronger resistance at the downward 8-day moving average @ 931.
First technical support for price is a pullback to the 200-day moving average/Jun. low @ 904 through the 900 level. The 50 day SMA in the 895 zone represents the next key levels of support for the index.
Potential Pivot S & R
ES W S1 & D R2 @ 925.75/926
SPY W S1 & D R2 @ 93.40/93.45
QQQQ W S1 & D R2 @ 36.25/36.30
DIA W S1 & D R2 @ 86.85/86.75
SPY W S1 & D R2 @ 93.40/93.45
QQQQ W S1 & D R2 @ 36.25/36.30
DIA W S1 & D R2 @ 86.85/86.75
Thursday, June 18, 2009
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