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Great Rally After The Selloff

Today the DOW had one of it’s top 6 days in history after it’s worst week in it’s 112 year history. Everybody is jumping for joy and looking forward to the rest of the week. But let’s be real, I said in my earlier post this morning that the markets don’t turn around this quickly.
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We still have a lot of work to do before we can reap the rewards of what has been done in the financial sector over the last few weeks. I’m very happy from today’s gains, but I’m realistic in the fact that this has to come down from profit takers within the next few days. With my interest in Morgan Stanley, my portfolio is up an average of 25% today.
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What we witnessed today was investors and traders getting in on some great deals after a major sell off last week. Most of the trading wasn’t based on fundamental, but on the fact that many hedge funds and other entities were trying to raise capitol and cover margin calls. no matter what you were invested in (except GE and ABX), you made some big gains.
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If you are up in any stocks at this time, you might wnat to think of taking some off the table for when we will have a down day (and believe me, we will have one soon). It’s better to miss out on some short term gains than to lose out on the ones that you made already.
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DOW @9,387.61 +936.42 (+11.08%
NASDAQ @1,844.25 +197.74 (+11.1%)
S&P 500 @1.003.35 +104.13 (+11.58%)
Oil $81.85 (+$4.15)

Hang in there and happy trading.

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Hedge Funds In Trouble

It’s been rough for hedge funds in the first three quarters of this year. After the average hedge fund lost close to 5% in the first eight months and then to lose another 7% for the month of September alone (according to hedge fund research), It become deadly for many of them in the first week of October.
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At the end of last month, many funds were expecting more than the usual level of requests from their clients/investors to pull cash out. which makes it hard to work on their longer-term trades when they stand the chance of losing capitol to do so. In turn hurting other investors in the fund. The number one reason hedge fund managers have guidelines in getting withdrawals.
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Unless you’ve been living under a rock, you’ve now heard in the last week that many of these hedge funds are in emergency status trying to raise capitol for their clients that want to pull out their money. In the process they’re running in the negative zone. To make matters worse, hedge funds bolster their returns with lots of borrowed money, which makes it harder for them to do what they do best.
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These firms make up a good percentage of why we’ve seen the decline in prices in the last few days. As a matter of fact, if you were watching Quantas Services Inc. (NYSE:PWR) on Tuesday, you would have seen a spike sell volume of almost 4 million shares in a one minute time frame. It’s believed that that trade was a hedge fund liquidating assets.
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Some funds are also trapped in the Lehman Brothers London Unit, which is now a thing of the past. The volatility in the markets has been accelerated by the failures in the financial sector like Lehman Brothers, AIG and Wachovia bank. Let’s not forget to debacle that went on in Congress recently.
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It’s getting harder for hedge funds to make positive gains. Yes, there are some that have had some good returns this year, but they’re getting few and far between. Most of them are down and could start seeing the writing on the wall of their impending doom. With all that is going on in the industry, there will be less firms out there. Of course the big dogs will survive to fight again, but how much capitol will they be able to raise to invest with is another question.

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What Happened To The Stock Market Today?

What happened to the stock market today is one of the most popular questions visitors have when they visit this site. Because of that I’ve decided to update this post on a more of a regular basis, possibly weekly – or when there’s a major development.


6/3/2011
What a month it’s been for the stock market. Each week in the month of May, the DOW has lost some of the gains it’s been making. None of the weeks were as bad as we seen in the last three trading days. The DOW has lost 420 points, the NASDAQ loses 99, while the S&P 500 drops 45 points. The employment numbers were released this morning which caused all three indicies to start in the red only to make up a small fraction of it. The unemployment rate in the U.S. now sits at 9.1%

4/26/2011
Well after a pullback on Wall Street last week, the indicies are off again to reach new recent highs. The Dow finished up 115 points after some good earnings reports. Most notably Ford (NYSE: F) stating that they’ve earned $2.6 billion in the past quarter. It seems that Ford is the best stock to buy right now. I guess until Washington comes clean with the true condition of the economy, Wall Street will keep on climbing. Rememberm this is not some free stock market game so tread lightly and consider yourself warned. Happy Trading.
Ford stock price = $15.66

4/12/2011
I know it’s been awhile (1 month) since I last updated this post. It’s been a very up and down ride on Wall street during that time and I wonder how long it will go on. The Dow lost 117 points today while the NASDAQ and the S&P 500 slipped as well. NASDAQ closed at 2744, losing 26 points and the S&P closed at 1314, losing 10 points. Nothing has really changed with the country’s economy, so I expect the three indicies will lose a lot more in the near future.

3/4/2011
The job report (unemployment rate) was released this morning. U.S. added 192,000 jobs in the past month and according to the report, the rate dropped to 8.9%. Crude oil prices for today rose to $104 a barrel, gold gained $12 per ounce. The three major indicies closed lower which means that traders are going to sit back this weekend and really go over the information. My suggestion is for you to do the same. I myself don’t trust what is going on and is waiting for the other shoe to drop. Happy trading.

2/15/2011
So for the last two weeks since my last addition to this post, the DOW has closed above the 12,000 level every day. It’s showing that it can hold it’s own. It’s moving well above the all three moving day averages and if you’re a technical type of trader, you’ve seen that the during the last six month period the DOW fell below the 50 day moving average twice, August 31st and November 30th. So if there’s a rhythm to the markets, expect to see it again at the end of this month.

2/1/2011
After two and a half years below this level, the DOW closed above 12,000. The DOW climbed 148 points to close at 12,040. The question is, will the market be able to stay at/or above this level. We are still in earnings report season and most are beating the street, so as long as there aren’t any major ripples in the economic reports we should be fine. Who am I trying to fool? The country isn’t on solid ground yet, so I do expect problem in this calendar year.

1/26/2011
The three major indicies were flat today. Many were thinking that today was going to be the day that the DOW closed above 12,000, something that hasn’t been done since June 2008. The only thing I feel worth mentioning today is the fact that Qualcomm (NASDAQ:QCOM) had an unbelievable earnings report. Revenue is up nearly 40% for the quarter. Netflix (NASDAQ:NFLX) just reported their earnings after the bell and it was outstanding. The stock climbed over 10% after the news. Expect a good day on Wall Street tomorrow.

1/24/2011
What a way to start the week. The DOW closed at 11,980, the highest it’s been since June 2008. Companies are reporting their earnings and are beating the street’s expectations even though McDonald’s (NYSE:MCD) released a good report, it warned about future margins because of possible rise in food prices. It was also reported today that economists are positive about the growing economy. There are many warning signs out there that indicate that the markets will take a hard hit in the near future.

1/20/2011
In the past week there was nothing worth posting about, but I feel that’s changed this week. Earnings season has started and so far it has been positive for the most part. Many of the major players like Alcoa (NYSE:AA), JP Morgan(NYSE:JPM) and Apple (NASDAQ:APPL) have given some strong results. The question is…Can they continue like this through the year? Experts are saying that the S&P 500 could gain as much as 10% this year. It may be difficult with reports of the housing market hitting a 13 year low and may not truly recover for 4-5 years. Keep an eye out for danger, we’re not out of the woods yet.
JPM stock price = $44.75
Alcoa stock price = $15.98

1/12/2011
The DOW as well as the S&P 500 closed today higher than they have since August 2008. In my opinion, there is no reason for the markets to be up nearly 90% from it’s low in March 2009. The economy hasn’t improved any where near that type of recovery and I feel it’s going to come down soon enough. The federal Reserve is printing money way too fast and hyperinflation is coming sooner than most might think.I’ve said it before and I’ll say it again… Don’t follow the herd. Has Jim Cramer as said…”pigs get slaughtered.” If you’re up big time at the moment and have more than 50% of your total capital in the markets, start pulling some of it back. Take your profits and leave at least 50% of your money in reserve for when the big bull back happens. In the meantime, think physical gold.

1/7/2011
So overall for the week, it turned out better than I expected. Last weekend I knew the markets would be up on Monday, but they would drop back down by today. The DOW finished up .04% of a point from where it started, while the NASDAQ & the S&P 500 finished up 23 & 3 points respectfully. The economic data that came out today was par at best. Even though the Initial Claims numbers weren’t what Wall Street expected, the unemployment rate fell to 9.4%. Of course I feel that there are less people who are able to collect benefits so they wouldn’t show up in the numbers anyway. No matter what the government is telling us, I question it. The political game is out of control and the American taxpayer is paying the price for it. With earnings season upon us, who knows what we’ll see next week.

1/5/2011
Well today seemed to show that there is some resistance in the markets, but the DOW gained 32 points while the NASDAQ & the S&P 500 gained 21 points and 5 points respectfully. Gold did lose just over $5 today, but experts believe gold will hit $1500 this year.

1/4/2011
While the DOW and the S&P 500 were flat for the day, the NASDAQ lost some gains from the day before. An article from Mark Zandi stated that the United States “isn’t screwed” I wonder myself where we’re going to be economically if the 112th Congress that takes office tomorrow doesn’t do the right thing and cut the spending it’s predecessor has done for the last four years.

1/3/2011
How about that for the start of the new year? The DOW opened up nearly 100 point to rise another 40 points to finish where it started the day. The NASDAQ started up 27 points while the S&P 500 was up 9 at the opening, but also finished where it began in the morning. Many investors feel the this will be a good year for stocks and some state that the markets will rise about 10% for 2011. We’ll just have to wait and see.




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6/29/2010
Right out of the gate the DOW was down 2% and who knows where it will be when the markets close in five hours. I don’t know about you, but I am waiting for another 8-10% pullback for me to load up on some good stocks.
The labor market hasn’t been good for awhile and finally Wall Street is feeling nervous about it. The Dow should be around 9000 points and that is what I’m waiting for. Happy Trading.

6/25/2010
I hope you guys are seeing the pattern on Wall street. What goes up will come down. The DOW is back down to 10,152 after losing 145 points. Now the Asian markets are following the same path. The Nikkei 225, Japan’s benchmark is already down 1.5% in the first hour. The rest of the world is starting to lose faith in our economy. Friday’s trading is not going to go well, so start your weekend early and sit out until Monday.

6/22/2010
How’s that roller-coaster ride going for you? In just six trading days the Dow has gone from 10,190 to 10,587 and back down to 10,193. The stock market doesn’t know which way to go with all this political BS. Like I said last week, the economy hasn’t changed and I would tread lightly when it comes to buying and selling stocks. I don’t expect anything good to come out of the rest of the week.

6/14/2010
In the past week the DOW gained nearly 5%, only to realize that the world economy hasn’t changed. After the news of Moody’s downgrade of Greece’s government bond ratings to junk territory. The markets were rallying on the earlier data of the euro-zone industrial output in April. Moody’s Investors Service have noted the risks in the joint euro-zone and the IMF rescue package.
Hang in there, it’s going to be a bumpy ride.

6/7/2010
The stock market took another dip today, which is what I expected to happen. The fears of a financial meltdown in Europe are growing on Wall Street. Why shouldn’t it though, our economy depends on the rest of the world. As it is, we still have major concerns about our own economic recovery. As I said before, I don’t have any confidence in the government and feel that the DOW should be more around the 8500 range. Many numbers are too inflated (including last Friday’s jobs report) to give us a more of an accurate reading of the economy.

In the past five days of trading the DOW has lost nearly 6%, but that doesn’t mean that there isn’t a way to make money in the stock market. Over the same period, I’m up 9% proving that if you do your research, You can make it in any market. Like Jim Cramer says… “There’s always a Bull market somewhere.”


6/4/2010
The jobs report was released this morning and Wall Street didn’t take kindly to it. The unemployment rate did dropped “officially” to 9.7%, but out of the 431,000 people would found work in May, nearly 95% of them were created for the U.S. Census. The DOW opened in the morning down over 200 points where it pretty much stayed all day and to close down 3% (300+ points) for the day. Next week I don’t expect good things to happen, so trade carefully.

5/7/2010
Well like I said, the day was going to be interesting. The market was down as much as 279 points only to bounce into the black momentarily to finish 139 points down for the day. This is not over people. There is still some down side to the markets. The stock market volatility is high and with investors feeling a little leery about staying in, I would have to say that this is the time to either sit back or short the market. I expect next week to as interesting (if not more) than this past one.

5/6/2010
I’ve been saying that there will be a turn in the markets and today was the day. Greece’ financial issue has Wall Street wondering what is to come. Add to the fact that someone mis-typed in an order causing the three major indicies into a tailspin. For a brief moment the DOW was down 998 points to end the day “only” down 348 point. The NASDAQ and the S&P 500 were down over 9% at the lowest of the day.
Tomorrow is going to be another bumpy road. Be prepared for the ride.

5/4/2010
It looks like the confidence in the stock market is slowly fading. The S&P 500 Volatility Index (^VIX) jumped 20% today to indicate that things will get shaky real soon. Read the rest of today’s stock market volatility

*Original post dated Sept 29, 2008*
Let’s just say the it went to hell in a hand basket (where that phase came from, I don’t know). The market started down 300 points in the first twenty four minutes and then stabilized being down about 250 points for most of the day. It stayed that way until Congress decided to vote against the “Investing In America” bill. The vote was 207 to 228 against saving this economy and the financial sector. The bill could have passed if Nancy Pelosi didn’t go ahead and bash the Bush Administration, but she did and that’s the way it goes.

As for what happened after the voting was over, the stock markets went spiraling out of control. Within three minutes the DOW dropped another 400+ points, making the DOW down 705 points. It did get a bounce and return 300+ point, but again that didn’t last long.

In the financial sector, most stocks fell more than double digit percentages and some like Wachovia dropped 81%. Who knows which company will fail next because of this failure by Congress.

As for the rest of the day, the market closed horribly low. The DOW lost 777.68 (-6.98%)points closing at 10,365.45, the NASDAQ lost nearly 200 points today closing at 1983.73 (-8.14%) and the S&P 500 dropped 106 points to close at 1106.42 (-8.79%).

Needless to say that there was no bright spot in today’s trading. What I found odd in a day like this that there were two stocks that did quite well. The first one is a solar stock that could be considered to be a penny stock and trades on the NYSE, that stock is Verasun Energy Corp. (NYSE:VSE). The stock rose $0.86 today in open trading, closing at $3.05. At the time of me writing this post, it’s sit at $4.00, that makes it a gain of 81%. What I found interesting is that there was no news that was released today on this company.

The other company that did well was one that I’ve invested in and have spoken about here on this site. Converted Organics CL B WRTS (NASDAQ: COINZ) had a bad day in the open market losing at one point 10%. In after market trading it’s something totally different, it’s bounced back off it’s low of $3.30 and now sits at $4.70, up 25% for the day.

Just for some ideas as to what to do for the rest of the week. The markets will come back once a bill is past by Congress. Do your due diligence and look into which stocks work for you and your portfolio and buy now while the getting is good. The main reason the markets have dropped is because of the lack of confidence in the economy and many people have decided to pull out for now to see what happens.

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Super-Size My Profits, McDonald’s (NYSE: MCD...

The economy may be slowing down, Consumer confidence is low and consumer spending is dropping, but no matter what people want to go to McDonald’s more and more it seems. McDonald’s same store comps rose last month (August) 4.5% in the U.S. and 8.5% worldwide. I’m not surprised in the news because when you are out and running around (like most Americans) you just want to get a quick bite to eat, Where do you run to first? McDonald’s has made it a point to buy key properties in all cities over the life of the company that it’s hard not to find one when you’re in a rush to grab something.

They are also building new restaurants everyday all over the world so how could they not beat their comps for the previous month. I do expect this to continue on the basis that more countries are eating more American-ized type food and McDonald’s are leading the way.

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As for any other fast food restaurant, they can’t compete with these numbers. Wendy’s stated in August that their same store sales were up, but only 0.01% and in Burger King’s 4th quarter, their worldwide comps were only up 5.3%.

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This is a company that I will look into because if these comps were better than expected, it could mean a good earnings report when they report next month on October 22nd. The stock is up over 10% since the beginning of the year and up30% since it’s low of $49.36 at the end of January. it has shown great returns over the long haul and with a dividend yield of 2.4% who can really complain? I do have some concern with the fact that the dollar has gained some strength and could possibly hurt international operations.

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As with any interest in buying stocks, you need to do your research and due diligence before claiming a stake in the company. Happy trading.

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Lehman Brothers (NYSE: LEH)

In the past week there has been a lot of talk about Lehman Brothers in the news. With the issues going on in the financial sector, it’s no surprise that Lehman would be the week’s star. Lehman’s price per share has dropped 61% since June when it received $4 billion in raised capitol. Now it seems that they are out trying to get more capitol for save the company. Last month it was a Korean development fund that they were trying to convince. At this point all indicators are showing that Lehman is ripe for a hostile takeover. The stock is trading at $13 at a time when Lehman’s book value is at $34. An analyst from Ladenburg Thalmann Dick Bove, upgraded Lehman Brothers to “buy” because of the fact that the firm has become a candidate for a hostile takeover.

It is also expected that they will have more losses in this quarter again. Most likely it will be below the street’s expectations. One Goldman Sachs analyst expects write-downs to the tune of between $2.5 billion and $3.5 billion during its fiscal third quarter

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The financial sector has been riddled with one bad news report after another and I believe that the time for picking up shares of certain banks and brokeage firms is just about here. I’m looking at a few of them right now and because of the last few days of news on Lehman Brothers I moved them to the top of this list of “stocks of interest”.

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Remember when I wrote about the Fannie and Freddie on 7-14-08 on the infusion from the Feds, the stocks of both companies jumped 30%+two days later. I have that same feeling on Lehman as I did with the other two. I’m waiting to see some more news on them this week, but I fell that decision needs to be made before the close on Wednesday. If you have any insight on this trade or just some news that I may have missed, please leave me a comment.

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NYSE (NYSE: NYX)

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photo by k conners

The NYSE Euronext (NYSE) reported their earnings today, but didn’t live up to the street’s expectation. They post a jump 17% in the second quarter as a result of the volatile markets during the same period, excluding the merger expenses. Unfortunately 3 cents shy of the 78 cents that the analysts were looking for. When merger costs are included the net income is actually 73 cents a share.
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NYSE Euronext stated that American Stock Exchange members approved the proposed merger.The deal is planned to be finalized in the third quarter of 2008. The merger is expected to operate at a loss for the remainder of the year, but save them $100 million.
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“Beyond the cost saves, we are also committed to investing in growth, which includes broadening our product and service portfolio in both core businesses and new ventures. Our capital allocation will be appropriately balanced between investing in our future and returning capital to our shareholders, as evidenced by our $1 billion stock repurchase program,” said NYSE Euronext’s CFO, Michael Geltzeiler, in a statement.
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Earlier this year, I started investing in NYSE. After dropping over 10% since I bought into the stock, I did dumped it. I advise anyone who may be thinking of getting in to sit out until the next quarter to see how they’re performing. I expect with the condition of the markets that they will be in good shape by that point.

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This Bud’s For You

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photo by mindexpansi0n
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Anheuser-Busch(NYSE: BUD) had a going away party today(not really). Today’s earnings report beat the estimate that the street was expecting. Yes, it was only $0.02(1.8%) but they beat it just the same. The makers of Budweiser posted net income of $689 million, or 95 cents a share on Wednesday, on sales of $4.72 billion. Thomson Reuters estimates called for 93 cents on $4.71 billion.
BUD shares closed Wednesday at $67.36, up 11 cents.
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In recent weeks Anheuser-Busch agreed to a takeover by InBev(BR: INB) for $65 a share which comes to $52 billion(just in case you had a hangover and missed the news).
I’m not a Bud drinker(never was either), but this is an American icon to be held in honor. To see it go to foreign investor is a shame for a red-blooded patriot. What’s next, the New York Yankees purchased by Petroleo Brasileiro(NYSE: PBR).
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Growing up in the NY/NJ area both of these giants are landmarks in their communities that they are in, but from the looks of things, the landscapes are about to change.

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A Bear Stock Market

“What is a bear market? It’s a market in which values rapidly fall and this fall is sustained across several markets. A bear market can trigger a serious recession or depression, if consumers become too despondent. …but more commonly the market stabilizes through a series of corrections, small and temporary drops in market value which bring prices down to a more reasonable and sustainable level.”
quoted on wisegeek.com

A bear stock Market is something that we all can do without. I consider myself a bull in the stock market world. I buy stocks to do one thing… go up in value. Unfortunately, there are to many hedge funds & other negative traders out there who short stocks (we’ll explain that in a later post.) in hopes of the price to drop. In doing so they can actually cause the stock to go down.

Mix that with profit takers & you end up with a bear market like we seem to be in. Some believe that we have finally reached an “official” bear stock market this past week.

My portfolio has taken a beaten in the last week or so, but that’s OK. I’m watching the stocks that I invested in & since I always keep some cash in reserve (as you should too for this reason) I will be buying more on weakness. I know the stocks that I’m in are strong ones & will bounce back off these levels & that I will make a profit in no time at all.

I get no pleasure from being negative & will always look for the good & positive in life as well as the stock market. I just sit back & wait for the bears to hibernate.

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