Owner: The Lauriston Letter URL:http://lauristonletter.blogspot.com/ Join Date: Thu, 25 Jan 2007 15:59:13 -0600 Rating:0 Site Description: Trades are posted live with analysis of stocks and financial markets. Chart patterns, business and political news, economic releases, sentiment data like volatility index (VIX) and put call ratios, and technical indicators are analyzed. Site statistics:Click here
Early Trading Expectations 1970-01-01 00:59:59 I expect a rally early in the week for the following reasons 1) Thursday's above average volume sell-off did not follow through on Friday 2) Volatility indexes and put/call ratios are in neutral territory, in an uptrend I expect this favors a rally 3) End-of-month window dressing shenanigans 4) I expect the Fed to leave rates unchanged 5) The major indexes have not violated their up-trendlines. Surprises that could derail the rally are Asian trading/commodities, earnings/guidance, and Fed statement and Commerce Dept. advance reading on 4th Q GDP, both on Wednesday. As already mentioned, I will look for long opportunities at the first sign of program buying.Live trades and analysis from The Lauriston Letter Read more:Early
, Trading
Markets following script 1970-01-01 00:59:59 We got the early rally to the tune of about 50 points on the Dow. I expect the rally will continue into tomorrow as mentioned in the previous post. I am only entering day trades on the long side, and waiting for swing trade entries on the short side (after the Fed on Wednesday). The trend remains up with small/mid caps and oil stocks showing the most strength.Live trades and analysis from The Lauriston Letter Read more:script
, Markets
Selling takes over, chop continues 1970-01-01 00:59:59 Selling has come in and now the major indexes are in the red or unchanged. As I noted on Saturday, a failure here has significant meaning for the bears. With crude oil dropping -1.4%, it looks like window dressing pockets are coming up empty. The uptrend is still intact though, and I have not found any interesting swing trades today. CNBC keeps repeating that this is the longest ever that the markets have gone without a 2% drop in one day (928+ days, source Tickersense last week) . I am not sure if this means anything. Still a few more days left for window dressing or new month "fresh money" to play out, or not.Live trades and analysis from The Lauriston Letter
Is a surprise from AAPL in the works? 1970-01-01 00:59:59 These guys seem to think so. I have no experience with the reliability of their calls, they expect some product announcement from Apple, Inc. tomorrow and that iPhone launch may come sooner than expected.Live trades and analysis from The Lauriston Letter
Google waiting to break out 1970-01-01 00:59:59 Which way will GOOG breakout? Earnings Wednesday will most likely be the catalyst (click on chart to see larger image):Live trades and analysis from The Lauriston Letter Read more:Google
Quick morning digest, PG and MMM 1970-01-01 00:59:59 Futures are slightly up, but in my opinion today may turn out to be another lackluster day as we wait for Bernanke tomorrow, unless window dressing kicks in at some point. I'll take profits on my puts given the chance and clear the deck for Wednesday. PG upped guidance, CL topped expectations, MMM is down 5% after matching expectations but gains came from sale of pharma business, SBUX up 2% on JPMorgan upgrade, UPS down 3.5% outlook disappoints and CME is down 2.6% after reporting profits up 35%.Live trades and analysis from The Lauriston Letter Read more:Quick
Russell 2000 knocking on ceiling 1970-01-01 00:59:59 Above the blue demarcation, I think short stop limits will trigger a rally. If we drop from here, I will add to puts. Right now the markets are attempting a rally (click on chart to see larger image):Live trades and analysis from The Lauriston Letter Read more:Russell
, knocking
SNDK down 10% on purchase, oversupply 1970-01-01 00:59:59 Sandisk blames quarterly loss on costs from buying Msystems. During conference call CFO says prices in the flash industry are falling rapidly due to oversupply, claims the pricing environment is uncertain for the rest of the year. We have now had unfavorable news from AMD, INTC, TXN etc., let's see tomorrow if this is also ignored by the market and becomes another "buying opportunity". The volatility indexes and put/call ratios suggest more upside, so we may be in a range for a while unless GDP, Fed or employment data this week bring along dynamics that cannot be ignored.Live trades and analysis from The Lauriston Letter
Entered Russell 2000 puts for Fed trade 1970-01-01 00:59:59 80 strike puts at 1.60, will be quick to take them off if we rally on Fed as I already hold some IWM puts from last week.Live trades and analysis from The Lauriston Letter Read more:Russell
Google punishing shorts this morning 1970-01-01 00:59:59 Whenever I see a triangle pattern like the one on GOOG chart, I surmise there must be long stop limit orders below the lower boundary and short stop limit orders above the upper boundary of the triangle pattern. This morning it looks like the market found an easy path through the short stop limit orders. Long awaited earnings come after market close today.Live trades and analysis from The Lauriston Letter Read more:Google
Dow up 110 points after Fed statement 1970-01-01 00:59:59 Investors obviously like what the Fed had to say. The Russell 2000 (I am holding puts) has broken to the upside. I am going to hold on to the puts as in my experience I have seen quite volatile Fed moves, but if this action continues it may be time to close all short positions.Live trades and analysis from The Lauriston Letter Read more:statement
Dow new record after GDP, Bush and Fed 1970-01-01 00:59:59 Investors obviously loved the GDP numbers, President Bush's visit to the NYSE floor during trading hours and the Fed statement saying recent developments on inflation have been favorable. The Dow is up more than 125 points. I am holding on to my puts, after a 70 point move in the Dow I consider it folly to chase the market on the long side, I am not hedging my positions which are minimal.Live trades and analysis from The Lauriston Letter
Google beats, but shares drop 1970-01-01 00:59:59 GOOG beat both top and bottom line expectations from the Street, but the shares
are trading flat to down after-hours- apparently Google
did not beat the much higher "whisper numbers" which were baked into the price. It's still early in volatile after-hours trading, and the conference call might bring surprises. Google traded as much as about 2% up in regular hours.Live trades and analysis from The Lauriston Letter
Apple, Inc. below pre-iPhone price 1970-01-01 00:59:59 This morning AAPL has gapped down and is trading below pre-iPhone
announcement price
. The buyers who bought all the way from around $86 to almost $98 and did not sell are now holding losing positions. If the selling continues the next support levels look like 82 then 77. More profound are the analyst price targets that followed iPhone announcement, I think I saw 155 yesterday. Maybe we'll get there someday, but not looking good so far today. Any market weakness this week will only exacerbate AAPL price decline out of the bear flag pattern.Live trades and analysis from The Lauriston Letter Read more:Apple
Lesson of the Day from Trend, GDP, Fed and Bush 1970-01-01 00:59:59 The lesson for today is: Never argue with the Trend, never argue with a good GDP, never argue with the Fed (liquidity), and never ever argue with President Bush visiting the floor of NYSE during trading hours. Bush on the exchange floor is as bullish a signal as you will ever get from the markets. Can you imagine a sitting president (or any president) visiting NYSE and being associated with a falling market? Especially one whose ratings are low? Next time President Bush is making any speech about the economy, whether from Peoria (Illinois) or NYSE, stay on the bullish side! It was worth about 120 Dow points! That's a lot of cabbage!Live trades and analysis from The Lauriston Letter
Google as high as $519 in pre-market trading 1970-01-01 00:59:59 All I heard was some analyst upgraded their GOOG price target from 550 to 600. Will look for details. Update - Think Equity upgraded to 600 from 580!Live trades and analysis from The Lauriston Letter Read more:Google
Now Chinese Officials are "concerned" 1970-01-01 00:59:59 The masses are using homes as collateral and tapping into credit card debt to finance a piece of the red hot equity markets. I think the 28-year-old phone-company employee puts Wall Street analysts to shame when he declares that he thinks "prices are reasonable". See WSJ.com article, and earlier post China en Fuego. They are waiting in line to buy stocks. I believe China is the canary. China equity markets closed 5% down Jan 31.Live trades and analysis from The Lauriston Letter Read more:Chinese
, concerned
Nasdaq weekly chart - is rally over? 1970-01-01 00:59:59 Look what happened each time we hit that resistance line going back to 2004 on the weekly chart of Nasdaq
100 (click to see large image). And note also the seasonal peaks around this time of the year. I conclude there is a high probability we are soon going to start the trip down, ending mid-2007. What do you think? The semiconductor $SOX chart is not inspiring either. But analysts think "tech will be the out-performer this year", maybe they know something the rest of us do not.Live trades and analysis from The Lauriston Letter
Jim Cramer "extrememly bullish" 1970-01-01 00:59:59 Although I don't pay attention to Cramer
's recommendations, I do find him entertaining if he happens across the screen while I am noting down commodity prices that I cannot get online. Today I want to note down for the record and for entertainment value, that Cramer was on around the lunch hour and proudly said he was "not only bullish, but extremely bullish". Noted. Continued in comments...Live trades and analysis from The Lauriston Letter Read more:Jim Cramer
Adding to Russell 2000 puts 1970-01-01 00:59:59 this morning 81 strikes were executed at 1.60. I am seeing many similarities with the conditions in May 2006 including VIX, put/call ratios, political/news events. In May we had a market rally after Maria Bartiromo claimed Bernanke had told her something or the other that was bullish during a dinner at the White House, related to GDP or rates, I don't remember exactly. This time around we have the GDP, Fed, Bush NYSE visit and "bottoming of housing market" news today. Continued in comments...Live trades and analysis from The Lauriston Letter Read more:Russell
Market and Volatility Index divergence 1970-01-01 00:59:59 Here is an interesting look at divergence
as posted in an article over at xTrends. As I mentioned earlier today, current volatility index levels are signaling a reversal is imminent. The xTrend article is looking at the divergence between S&P500 and VIX. I find price and indicator divergences worth paying attention to, especially in cases where the indicator is not directly derived from price itself. What the chart will not tell you though is when the reversal is going to happen, but looking at recent VIX lows, I would think it is a matter of days. (Chart posted with permission from xTrends, click for larger image).Live trades and analysis from The Lauriston Letter Read more:Market
, Index
, Volatility
Analysts bullish on employment data 1970-01-01 00:59:59 Today's employment
data has been greeted very favorably by both economists and analysts. I am watching how prices close today and trend next week as an indicator of whether Wall Street is putting their money where their collective mouth feeds. Amazon reported yesterday and is down 3%, AKAM was downgraded but is unchanged, I am watching for potential double top. At the moment markets are more or less unchanged with a bullish bias.Live trades and analysis from The Lauriston Letter
Research in Motion RIMM tidbit 1970-01-01 00:59:59 I got this morsel from The Kingsland Report (an excellent financial blog with excellent humor to boot): that RIMM is buying MusicGremlin in its foray into music downloading. MusicGremlin allows consumers to wirelessly download and send MP3 music files on the go. CrunchGear story. At first blush the story makes a lot of sense from RIMM's point of view and would be fantastic competition for Apple, Inc. Maybe this is why RIMM was on the move 4.3% on Friday.Live trades and analysis from The Lauriston Letter Read more:Motion
, Research
Weekend reading: Mobile rival to Google 1970-01-01 00:59:59 Worth watching GOOG tomorrow to see how it will react to news of Europe's biggest telecoms giants planning to create a mobile phone search engine. Vodafone, France Telecom, Telefonica, Deutsche Telekom, Hutchison Whampoa, Telecom Italia and one American network, Cingular, are reportedly meeting next week in Barcelona for secret, high-level talks to plot how to carve out a large slice of the lucrative search advertising market. Full story from The Sunday Telegraph.Live trades and analysis from The Lauriston Letter Read more:Weekend
, Mobile
, rival
, Google
Las Vegas or Shanghai? 1970-01-01 00:59:59 Continuing the focus on China, here's another article from Bloomberg.com. China dropped 4% today, the second such drop this week. Other articles.Live trades and analysis from The Lauriston Letter Read more:Vegas
, Shanghai
, Las Vegas
What's up with Mr. Softie? 1970-01-01 00:59:59 MSFT down 2.5%, but more importantly the rest of the market including the Nasdaq does not seem to care. "Pile on the negatives, bring it on" seems to be the market attitude.Live trades and analysis from The Lauriston Letter
AAPL short-term rendezvous? 1970-01-01 00:59:59 This chart (from Traderdaily.com) is from Jan 18, 2007. I think if Apple, Inc. breaks below 84, next level is 76 as shown in the chart. AKAM is up almost 5% today on SuperBowl generated traffic, Akamai manages online traffic for 21 of the game's 35 advertisers, including BUD, GRMN and GoGaddy. Another case of gunning the short stops? NSM just warned at market close, halted, Am Tech/JSA Research upgraded to BUY this morning. LOL.Live trades and analysis from The Lauriston Letter
Sentiment indicators in unchanged US markets 1970-01-01 00:59:59 Put/call ratios are implying markets are neutral to "overbought". Volatility indexes are signaling markets are "overbought". This morning VIX gapped up from near the lower Bollinger Bands, up 6% from Friday close. Japan closed down 1.2%, China closed down 2.3% and European markets are flat. Continued in comments...Live trades and analysis from The Lauriston Letter Read more:Sentiment
Mr. Big Stuff, who do you think you are? 1970-01-01 00:59:59 Mr. Big Stuff, you're never gonna get my love... Well, if these bigwigs (including Janet Yellen) can ignite the markets this week, then they might get my love. The Fed speakers are oot and aboot hawking their wares, let's hope they will resurrect this moribund market up or down, though I prefer down for my puts to work. We're all set to go, all we need is a trigger. Continued in comments...Live trades and analysis from The Lauriston Letter Read more:think
A diamond does not last forever 1970-01-01 00:59:59 I am told the diamond
formation is rare, but bearish. With so much liquidity around the globe, I'd rather wait until this diamond breaks out up or down before acting on the technology stocks. NSM warning is not getting much play today, in fact most are still quite bullish on the markets. This evening CSCO will be The Decider, maybe.Live trades and analysis from The Lauriston Letter
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