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February 26, 2007
Cara’s Daytrader Bull Board, Mon., Feb. 26, 2007, 8:38 AM
The stock market is clearly at a crucial point. This morning, the Bulls are trying to power up a significant rally. Can it happen through the afternoon?
If technical support is broken early this week, the market could start an intermediate-term sell-off. And if that happens, the selling could persist into a full-out Bear should interest rates start to move higher.
The news seems to be mostly take-overs and Leveraged Buy-Outs, as well as rumors, which are typical late-cycle phenomena.
Interactive links
There will be some important econ reports from the US from Tuesday through Thursday.
Asia-Pacific stocks were mixed earlier today.
The government of India budget will be read on Wednesday. Even with central bank tightening to prevent over-heating of the economy and speculative trading of securities, it’s likely that the government will forecast a growth rate of about +10 pct annually for the next 3 to 5 years.
In Europe today, most of the stock markets are firm. Oils are leaders. Geopolitical tensions are building.
There has been modest strength in the $USD since 3:00am ET after the index bottomed at 83.94, but nothing much is happening since Friday.
U.S. Treasury Bond Mar. contract
Since midnight (ET), spot gold is down about $2.50 to 683.90, which is still about $5 higher than Friday morning.
Spot silver is down -$0.14 at 14.51, but is still about +2 pct higher than Friday morning.
Spot platinum is down -$9.00 at 1134, but is still +$9.00 higher than Friday morning.
Spot palladium is down -$3.00 at 353, but is still $5 higher than Friday morning.
The goldminers are reporting excellent earnings. The problem is they are not discovering replacement reserves, and precious metals don’t grow on trees or from printing presses (ie, credit expansion).
Citigroup (C) recruited CFO from American Express (AXP).
Dow Chemical (DOW) will likely trade higher today as a newspaper is reporting the company may be subject to a take-over bid.
Credit Suisse has downgraded (Cara 100) Moody’s Corp (MCO) from Neutral to Underperform.
The mega-mega-billion Leveraged Buy-Out (LBO) of Texas Utilities (TXU) is trading in Europe at $73. TXU closed Friday at $60.02. Could it be that a higher bid (ie, even more debt involved) than $44 billion is coming?
Banking in Brazil is still looking good, particularly for (Cara 100) Banco Bradesco (BBD), which is the only one of the Big Three rated “Outperform” by Bear Stearns.
Today, at the risk of being referred to as a "penny dreadful" stock tout, I am going to plant the seeds for a Cara 100 Micro-cap Watch List. For this list we will not be considering Resource companies (ie, Oil & Gas, Metals and Precious Metals), which will go in a separate list. This one will be companies that are in GICS sectors 20, 25, 30, 35, 40, 45, 50 and 55.
To take me off the hook, I am going to rely on the readers to create and monitor the list.
If you want to help, send me your co-ordinates. I'll set up a table for what I consider the best of these companies and I'll leave it to the readers to try to convince one another or the pros and cons. As I don't have much time for participating, I'm going to ask one of my readers (presently a college student) to manage the project.
These are relatively small companies with a market capitalization of between $50 million and $300 million. The list will include a lot of personal hopes and dreams. But trust me, if a company gets on this Cara 100 list, I will be encouraging full-disclosure and objective discussion. Remember, I consider risk first, and reward second.
Have a great day. I shall do some work today on ETF’s and report back.
Posted by Posted by Bill Cara on February 26, 2007 08:38:31 AM | Category: Cara's Bull Board
Discourse
"US, the world's hedge fund"
[On the whole, the minimum margin requirement for securities will now be 15% OF THE ENTIRE PORTFOLIO, as opposed to the standard 50% of each security, this means you can buy more than 3 times more stock with the same money]
http://www.tradersmagazine.com/magazine2.cfm?id=1&aid=2707&year=2007
Posted by: JIM ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
February 26, 2007 10:14 AM [link]
Greenspan says the "R" word:
Posted by: JIM at
February 26, 2007 10:20 AM [link]
MU finds resistance at new downtrend line.
KISS
Posted by: g034 at
February 26, 2007 10:36 AM [link]
ALOHA !!
The post office has officially thrown in the towel on rate hikes. The new "forever" stamp is here!
On Jan 2006 the post office raised the price of a first class stamp from $0.37USD to $0.39USD. The last rate hike was in 2002. Around a year later they now want to raise again to $0.42USD. That is a 13.5% increase in a little over a year. Who do you believe the US Post Office who is facing real world prices or the US government CPI number, which reflects what politicians want you to believe so they can get re-elected?
Link: http://news.yahoo.com/s/ap/20070226/ap_on_bi_ge/postal_rates
Posted by: kaimu at
February 26, 2007 10:36 AM [link]
bill---anything new with crystallex kry---from canada thanks
Posted by: russty1 at
February 26, 2007 1:18 PM [link]
Afternoon, Bill. I'm just passing this on from Peter Grandich regarding Northern Dynasty:
I just saw a 9 million+ share cross done on Northern Dynasty Minerals (NMD-TSX-V, NAK-AMEX) on the TSX. The only possible seller of that block that I can think of is Galahad. This is an extremely interesting trade!!!
The possibilities involved in this include, but are not limited to:
• Another major mining company has taken a position. If so, I think they would have to disclose but at this moment I don’t know for sure.
• A group of some kind purchased it and they too would likely have to disclose.
• A bunch of institutions bought the block (NDM is about to present at BMO’s conference in Tampa at 5PM - BMO did the cross).
As I noted there are other possibilities but I’m personally hoping its #3. Why? If another major is to enter the fray, this block is now put away (one assumes) and makes any bidding war far more interesting.
Fasten your seatbelts as I think the fun has only just begun. Today may be the last entry point for those not yet involved in this play.
Posted by: mogwai8myball at
February 26, 2007 3:47 PM [link]
With the "space" focused WIR I thought it had been a long time since we had a KRY sighting. Don't know anything about the politics side, but looking at the chart I'd say, "hold on for dear life as something major is going to happen!"
I don't know the last time I've seen bollinger bands this tight on any stock that I follow. That normally singals a coming major volatility expansion. The only thing you don't know is whether it will be up or down. KRY-T closed today at $3.81. The upper band is $3.81 and the lower $3.73. The 15 day MA $3.73, the 45 day $3.77, the 100 day $3.68 and the 200 day $3.67. A lot of support underneath. Hopefully that means it will be a breakout, not a breakdown.
But charting on KRY is probably for interest sake only as the media dictates the direction and volatility.
Posted by: bobj at
February 26, 2007 4:23 PM [link]
Anyone have any thoughts on what Xilinx is trying to do with the issue of 30 year convertible notes to buy back stock? http://biz.yahoo.com/prnews/070226/aqm075.html?.v=1
Maybe I'm missing something here, but it seems counterproductive to add debt to the balance sheet to buy back stock, which would then offset the diluted share count by the convertible debentures. Am I missing something here?
Can't help but wonder if there's not an alterior motive to enrich management at the shareholder's expense.
Posted by: bb at
February 26, 2007 5:10 PM [link]
Re. The Northern Dynasty-Galahad connection mentioned above:
As everyone on this illustrious board probably knew (except me), a month ago Galahad announced the sale of 10.3% of its 20.7% stake in NMD/NAK to QIT-Fer Et Titane, an affiliate of Rio Tinto:
http://www.galahadgold.com/mediacentre/article.html?id=93 (note paragraph three)
The Pebble project, called one of the world's most important copper-gold-molybdenum deposits, has raised some green concerns that don’t seem to worry anyone.
Ergo…?
Posted by: jiggstoo at
February 26, 2007 8:08 PM [link]
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hello from germany,
with news like this
adding fuel to the fire....Norway's $287 Billion Pension Fund May Invest in Real Estate and Private Equity
the party can go on longer than anybody expected...(indluding me)
http://immobilienblasen.blogspot.com/2007/02/adding-fuel-to-firenorways-287-billion.html
Posted by: jmf![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
February 26, 2007 9:04 AM [link]