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February 12, 2007
Cara’s Daytrader Bull Board, Mon., Feb. 12, 2007, 8:11 AM
Commodity prices are starting the week on a soft note as bond yields have picked up in the early morning as traders are quickly raising cash.
Friday's stock and bond markets were broken after Micron Technology (MU) projected flash memory prices will fall between 30-40 pct, and that DRAM prices will fall -15 pct this quarter. The Semiconductor group (SOX -1.4 pct) immediately dropped.
For a second day, shares of the troubled subprime mortgage industry (LEND, NEW, NFI, FICC, FMT) were hurt by HSBC's (HBC) warning. REITs (-2.3 pct) were also depressed on Friday, following the completion of the EOP deal.
After Banc of America cut US Steel to Neutral Friday, saying steel price increases and a March inventory correction are priced into the market, X fell -4.3 pct. The group followed, including Nucor (NUE).
Supercomposite maker Allegheny Tech (ATI -4.2 pct) fell despite a new Buy rating on Friday.
Homebuilders (XHB) fell -2 pct on Friday, which made it a full -5 pct loss for the week. The group appears set to test a key support level this week. Where are the Bulls who hyped these stocks?
Yes, this will be an interesting week in capital markets. I am, finally, clearly on the mend, so I am up to participating in the action. Hopefully this weekend's programming issues are behind me too.
Interactive links
At 8:30am, the U.S. international trade report will be published. Judging from China's reported trade surplus, it doesn't look too good for the US numbers.
Tokyo and Shanghai were up, but the rest are rather nervous. They know that the Yen cannot continue to plunge as a strategy of the Japanese government to help out the domestic exporters. And when the Yen starts heading back north, they know that the Japanese-induced carry trade will reverse. Then stand aside, and let the sellers come to you. Cash will be king.
Nothing but ominous red arrows this morning.
The Yen is falling against the $USD following the G-7 meetings this weekend. I can only imagine how many hedgies are going to be smashed when the Yen turns around.
U.S. Treasury Bond Mar. contract
A little soft for now.
Spot gold has moved into a higher trading range (ie, 650-700). With the $USD strength this morning across the board, the PM’s and Crude Oil have sold off a bit.
Here are the current Cara 100 RSI-7 values, sorted by highest and lowest, first by Daily values and then by Monthly, prepared by “David”. I’d like to than “Sergey” for preparing this data for the past fortnight.
The upward momentum was taken out of this market on Friday afternoon. We have to watch to see if the sell-off continues. Wouldn’t it be nice to be a trader at Goldman Sachs, JP Morgan, Morgan Stanley and Lehman Brothers to get to see the orders of their friends at the Fed?
Teekay General Partners (TGP) is a little known Cara 100 company that ships LNG that I selected (I shamefully admit) because it is headquartered in Nassau Bahamas. TGP had a quite a pop in the last 15 minutes of trading on Friday. This morning it will open back down, so don’t buy it.
TGP declared a $16.5 million cash distribution (ie, $0.4625 per unit for the quarter ended Dec. 31, 2006), payable Wednesday to all unitholders of record on Friday, Feb. 9.
The stock has had a terrific +26 pct run in the past 100 days, from about $30 to Friday’s close of $38.08. When buyers come to me is when I sell and take profits. When sellers come to me I wait until I see the whites of their eyes before pulling the purchase trigger. Even in the best companies, cycles happen. Thankfully.
Btw, Teekay LNG Partners L.P. is described as “a master limited partnership formed by Teekay Shipping Corporation (NYSE: TK) as part of its strategy to expand its operations in the liquefied natural gas (LNG) and liquefied petroleum gas (LPG) shipping sectors. Teekay LNG Partners L.P. provides LNG, LPG and crude oil marine transportation services under long-term, fixed-rate time charter contracts with major energy and utility companies through its fleet of 13 LNG carriers, four LPG carriers and eight Suezmax class crude oil tankers. Seven of the 13 LNG carriers and three of the LPG carriers are newbuildings scheduled for delivery between early 2007 and mid-2009.” It’s a neat company, skilfully managed by a very few people. It’s an intellectual capital story within a rapidly growing industry (ie, alternative to crude oil). Bahamas is a zero-tax jurisdiction, which is attractive to companies like Teekay (TK) and Teekay LNG Partners L.P. (TGP).
In any event, great companies are not always great stocks. Most of the time, but not all the time.
Four Seasons Hotels (NYSE: FS) has agreed to be bought for $82 cash. The Saudi Price and Bill Gates have the cash. Terrific hotel managers. This deal had been expected.
“AZtock” wants me to comment about Electronic Arts (ERTS), which is a Cara 100 company. But with a M-W-D RSI-7 of 44.5 + 39.8 + 40.6, I still don’t see the whites of the sellers’ eyes.
Posted by Posted by Bill Cara on February 12, 2007 08:11:33 AM | Category: Cara's Bull Board
Discourse
Hey Bill, with regard to the home builders, today Goldman Sachs is hosting a "Home Builders" conference. All the usual suspects will be in attendance. Also, KB Home (KBH) reports earnings tomorrow. This will be their first full report since last June, before the stock option backdating scandal broke.
And you're spot on with regard to this group testing support. Last time, they were able to bounce back. While there's still plenty of short interest to fuel a bounce of that support, a signficant difference this time is the state of the sub-prime lending industry is no longer a well-kept secret.
Posted by: number2son ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
February 12, 2007 8:58 AM [link]
GLD trading on the open market before the open, both on my watch and active lists and traders at Fidelity can not explain why we are seeing premarket trading activity. Hmmmm
Posted by: C.Note at
February 12, 2007 9:29 AM [link]
C.Note
FWIW, I read an article within the last week that mentioned GLD would start trading earlier. They wanted it trading when the futures markets opened.
Posted by: Seamus at
February 12, 2007 9:45 AM [link]
correct Seamus, GLD starts exchange trading at 8:20amET now....it always had trades on the ecns from 7amET before, though
with crude oil so weak at 58.57, and the dollar so strong, HUI.x looking at a bear flag goal of 334, say back to test 50MA
p.m. volume very low, a la NEM only 1mil nearing lunch, and KRY on 350k...so nobody wants to sell thus far
Posted by: deacon31 at
February 12, 2007 10:38 AM [link]
INFLATION Story # 3:
I’m still learning how to trade and make $ here, but buying groceries and other household items is a area I believe I excel in for stretching a dollar and finding a bargain. So early last year when I discovered a leading Unilever brand (4lb.14oz box) of laundry detergent claiming to be the 40 load size for $1.00 less than it’s normally advertised price of $3.99 (when using coupons) I didn’t hesitate to snatch it off the shelf and place it in my cart.
This weekend another opportunity presented itself for the same product, which now has a regular price of $5.29, on sale for the low price of $3.99. Since coupons where nowhere to be found, I proceeded to the check out lane smiling anyway. Well, the smiling ceased when unpacking the groceries and noticing that the new box of powder seemed smaller, but it still claimed to be the 40 load amount.
It just so happened that I still had the old box and compared sizes. I discovered the old box had 23.8% more washing powder then the new box, which weighed in at 3lbs.15oz!!!!!!!!!!!!!! :(
Also:
Thanks Seamus and deacon31 for clearing up what Fidelity trading desk couldn't ;)
Posted by: C.Note at
February 12, 2007 11:40 AM [link]
Hello, Bill. Thanks for highlighting TK. On a similar vein i had my eyes on the dry bulk shippers, such as qmar exm dsx. Looks like they bottomed out last summer and have been moving up nicely.
With bernanke speaking, it wouldn't surprise me if the PMs stay weak at least through Tuesday. While gld and slv had a nice week ('cept friday), i have to say i'm a bit disappointed with SLW. It's been lagging compared to last year. Just talking out loud, but i wonder if it's being pinned by the options, namely the 10s and 12.5s. Lotsa 12.5 calls for feb. and march out there.
Looks like the oil rally is over for now.
Posted by: mogwai8myball at
February 12, 2007 11:54 AM [link]
My favourite investing comment from a CEO:
However, historical time charter rates are the least of my concerns when it comes to DryShips. CEO George Economou seems to have little concern about individual investors, as former Barron's editor Kathryn M. Welling pointed out in a newsletter column last year titled "The Golden Fleece?" "It was surreal," a source told Welling in relation to DryShips' IPO. "When someone asked why he was doing the deal, here-now, [Economou] actually said, basically, 'Because Americans are the dumbest investors around, and there's lots of liquidity in this market.'"
http://www.fool.com/investing/general/2006/09/01/dryships-an-investing-shipwreck.aspx
"I’m still learning how to trade and make $ here..."
Perhaps, C.Note, but a cursory comparison from when you first braved a comment here and right now shows you have truly come a long way. That's what this blog is all about, right Bill? :)
Good luck and good trading.
Posted by: MarkM at
February 12, 2007 2:08 PM [link]
HD Rose for your Valentine!
http://www.flashvideofactory.com/test/demofullscreen555.html
Posted by: DollarBill at
February 12, 2007 2:20 PM [link]
"traders at Fidelity "
lol
Posted by: g034 at
February 12, 2007 2:40 PM [link]
Newbie here
Question on all the price spikes for CFC in the last couple of hours. 2 or 3 not unusual but quite a few this afternoon.
Thanks
Posted by: Skater at
February 12, 2007 2:57 PM [link]
For years Greenspan could talk for 2 hours and still never say anything with substance. Wed & Thursday helicopter ben is going to try again to keep from stepping on his d!ck. Chances are the puppets for the federal reserve will have another victory over the investors. Million dollar question is, when will money masters make the wrong move, or say the wrong words????? It's just a big game if you stop.. listen.. and open your eyes.
http://www.newsmax.com/money/archives/articles/2007/2/12/091413.cfm?MN=1&PROMO_CODE=2D5E-1?S=AL
Posted by: bigwad at
February 12, 2007 4:35 PM [link]
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nice new look to the daytrader board, thanks Bill!!
caution on shorting YM low!
how about a bounce toward 12655
mondays of options ex week bullish bias
crude oil down to 59.10 and semiconductors positive talk, so 2 of 3 friday problems starting positive(financials 3rd)
AAPL- upgrade
RIMM- new blackberry
COST APA APC UNH- barrons
premkt volume: ONXX AAPL CPSL CTIC
dollar up to 200MA, p.m.'s following crude oil and noticing dollar
Posted by: deacon31![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
February 12, 2007 8:55 AM [link]