Good morning from Cape Town

The SEC’s announcement to curb naked short selling, together with a dramatic drop in oil prices and a series of better-than-feared earnings announcements from US banks, triggered a recovery in investors’ risk appetite, resulting in a strong stock market rebound.

Although the near-term outlook has improved and the long awaited technical stock market rally has probably commenced, it is premature to cast caution to the wind.

Read all about this in my weekly review, highlighting some thought-provoking news items and quotes from market commentators during the past week.

Here is the link to the “Words from the Wise”: http://tinyurl.com/5zsaky

That’s the way it looks from here. What say you?

UYG - Bid limit @$21.00

Good morning.

Here are your Cara 100 Ratings Changes:

Upgrades:

DNA - to Overweight @ Lehman Bros.
NTES - to Outperform @ Credit Suisse

Downgrades:

NKE - to Neutral @ HSBC
SWK - to Hold @ Deutsche Securities

Target Price Lowered:

SNDK - from $38 to $23 @ Needham

--------------------------------------------------

Have a great day.

GFI is weak this a.m., Bill. Hmmm...

FNM - Wow, Fannie's on fire this morning...

Chicken,

Yep. And look at Cara 100 member DNA fly!

Regards

I scraped a few shares of OSTK off the windshield this morning @ 15.18 for a trade....

its interesting to hear of bank runs in the US, in canada the vast majority of people hold their accounts with one of the big 5 banks. i cant imagine the feeling of having to line up overnight in a panic just to take your own money from your account, or to have other banks refuse cashier's chq's from your defunct bank.

i wonder if the integrity of people's safet deposit boxes are maintained at failing banks, is it as difficult to get its contents out when they wont release your account balances?

Commercial bankruptcies soar, reflecting widening economic woes

Commercial filings for the first half of 2008 are up 45 percent from last year, as the national climate for commerce continues to deteriorate amid rising energy and food costs, mounting job losses, tighter credit and a reticence among consumers to part with discretionary income.

From April through June, 15,471 U.S. businesses called it quits, according to data from Automated Access to Court Electronic Records, an Oklahoma City bankruptcy management and data company.

States that saw the biggest increase in filings were Delaware, Montana, Oregon, Maryland and Connecticut, suggesting that the economic gloom is spreading beyond large population centers.

It was the 10th straight quarter that business bankruptcy filings have increased. Nearly 29,000 companies filed in the first half of 2008.

http://tinyurl.com/5fr3yv

200 skf at 130.40

out skf 132.30

Wow. It's quiet here. Does this market leave us all speechless or are many on vacation?

[Bill Cara note: Interest in trading and Discourse is down because of (i) vacations, and (ii) lack of conviction in this summer "rally". Even the bond and forex markets are subdued today.]

Was wondering the same thing, TraderGirl.

Then again, I'm not making any trades today either.....looking for a better indication of market direction.

Regards

Just sitting and waiting until this move plays out. I have been making moves in energy and materials, where there have been good shorts, even with the rally last week. Covered Arch Coal short and went long this morning. This one trades very predictably.

Looks pretty weak now with bad tick and trin picking up.

A 1 min chart of XLF this morning showed two big bad volume spikes before 10:30 AM. Does anybody know if you need Level 3 quotes or something to tell if that's coming from big whales unloading or just normal high-activity zones?

I ended up adding a little more OSTK when it closed gaps today at $13.8 and $14 that were created in April. Added at $14.16 and got some at $13.79 - averaged in now at $14.77....

Scaled down to minimum my only "green", SIL @ 5.47.

Wanted to get back into QID at 42.51 or lower but far from that entry price now.

Meanwhile I am slightly underwater on my all my other resource and energy plays.

And Prieur, there's a good chance the sale of my
Ladismith (Western Cape, South Africa) house has fallen through and I will now be glad if it does.

Ek bly!

FA:
Level III quotes
Definition

Everything included in Level II quotes plus the ability to enter quotes, execute orders, and transmit other information. Only NASD member firms which are market makers have this ability

Hope this helps.
Fish

Paulson and Bush both spoke at the same time the other day. Jon Stewart's "The Daily Show" did a humorous satire in which he does a marvelous juxtaposition of their comments - one to Congress and the other to the Public ... somehow, they don't match. Great viewing, and thanks to Calculated Risk blog:

http://tinyurl.com/6s4avr

My post above is incorrect. I meant to say that Jon Stewart's show juxtaposed Bernanke and Bush, not Paulson and Bush.

Sorry.

Well, the BAC earnings this morning didn't provide much inspiration... Will wait to see what WB and WM have in store for tomorrow...

The Goodship Overstock is currently en route to Peppermint Bay.......

Congrats if anyone else bought the plunge this morning!

VLO and TSO on fire this morning. According to Yahoo they've got short % of float of 2.7% and 14% respectively, so I can see a short squeeze on TSO, but not VLO. Kinda weird to see such a disparity on short position for such similar companies, anyone have any thoughts on that? Institutional ownership (which seems much higher for VLO)?

Trouble at Wachovia Bank...

"We are hearing about the impending shutdown of wholesale mortgage operations at Wachovia. This morning, we received the following:

Wachovia wholesale is shutting down today. Press release at 1PM.

All us reps were told this morning by top managment that wholesale will be completely shutdown by August 31st and a conference call will be this afternoon. All reps were called Sunday afternoon on the east coast...both Portfolio and marketable products."

http://tinyurl.com/5ec8t6

ALOHA !!

LA DEUDA ETERNA ...

Means the "Eternal Debt"!

That sums up the future of America so long as we keep voting to reinstate the same politicians ... the same two party aristocracy!

MONETARY CRISIS ...

My thoughts:

Crude is up $1.57 but yet Sun, TSO & VLO [refineries]are also up. Looks like there could be people in the know who expect the summer rally to begin shortly.

The Elliott Wave principle suggests a short term decline this week [could be today's action]which would set the stage for the a multi week rally [last wave up] before a stunning plunge downward.

For this rally so far I hold TSO & building a position in SNDK. Will switch to ultra shorts as we approach 11,700 or when it looks like we start to stall out. Of course this plan could change at any given day.

Colin Twiggs sees a capped-off situation in the S&P with a fall below 1240 signalling the edge of the cliff. Be careful out there.

http://www.incrediblecharts.com/tradingdiary/trading_diary.php

What do the charts tell you? Take out a monthly chart of the S&P 500 or Dow Jones Industrial, and draw the fibonacci retracements from 2002-2007. Where do the prices sit in relation to those retracements, and what do you think will happen if the current situation persists?

What other people say is nice, especially from trading masters like Bill. But you need to learn to think on your own, act on your own, and take responsibility on your own.

Hello from beautiful North Puget Sound.
Vacationing 10 miles away has caused me to read but not post so much this week. Whole family from 60 yo to my 3 yo grandaughter went kayaking out of Bowman Bay out into the Straits over the weekend. Just great fun.
I was thinking last week that postings were up related to news volatility esp on thurs and fri. I am constantly reminded as I read investing articles and books of just how much I have learned here on this blog.
Thank you Bill and all posters.

Re: VLO,TSO

There news of possible hurricane hitting the refinery dense part of texas. I suppose if it hits, supply is taken off line and could push prices up.

But if VLO is one of the refiners hit, does business insurance offset the losses from being damaged/shutdown?

SteveC - "what do you think will happen if the current situation persists?"

If the current situation persists, I think we'll find the tunnel we're looking into is actually a vertical cave (well) full of water in which we'll become submerged and probably drown.

I'm counting on change.

craig/vinod-

out of SKF at 136.70 at a loss...
out of OEBTP at 14.30 at a loss...

back to 100% cash...

proudpapa - Maybe you can find storm effect on refiner stock by examining Katrina era results. I'll bet surviving refiners will see huge gains.

Now out of SIL at 5.80 and it is still rising, up 15%+ on the day, SLW up only 2.5% as comparison.

(really no time to trade today...can't be holding)- if i had to guess, it trades down, but i don't want to be holding into the close....

Congrats robbie, hope you made a good profit.

2nd
i am surprise that you did not average down this morning with skf at 130?

UYG - Holding into the close, looking for a gap-up...

vinod- no time at the day job, my man...that's the way it goes sometimes...no worries, though-> entire round-trip dented the port about 0.4%, i can live with that

Thanks Fish, I guess Level 3 quotes wouldn't add that capability and that Level 2 quotes already do: since that's when you get to see the marketmaker's order book, and supposedly get a better feel for the depth of support for a given price.

FDIC Faces Mortgage Mess
After Running Failed Bank
A liability that could run as high as $70 million for the FDIC, according to the Journal.
http://tinyurl.com/6heqhq

GOOG- getting damned close to the limit order i had last friday at 465...

No response from my HB&B broker site....

Buy 100 Shares of DUG
Details Filled at $32.47
Buy 100 Shares of SMN
Filled at $32.70
Buy 100 Shares of DUG
Details Filled at $32.10
Buy 100 Shares of SMN
Details Filled at $32.29

HB&B Broker site funny business... Finally got back in after-hours.

So is today the eye of the hurricane?

It does kinda feel like the eye. Don't know if it's a hurricane though...

Capital One getting killed after hours on American Express's bad earnings.

Feels like the eye of the hurricane to me, but as Bill indicated, who knows what ingenious manipulation Paulson has up his sleeve. This naked short prohibition (financials only) was ingenious, although history will not look kindly on such open cronyism.

Futures are really getting killed after hours.

In Pickens wind power investment, GE is the windmill vendor?

I got lucky last week with financials - went off with Jan2010 calls of C and BAC at 15 and 20, respectively (I chose those strikes because that's the price I think is very attractive for these issues long-term, i.e. I'd own them at those prices). As it turned out, held both positions only 3 days with a more than 100% gain in BAC, about 75% on C. After all this, I am still only slightly positive for the year. Once again all cash; no ideas for tomorrow, but I am biased against oil - it may spike up again but my spidey-sense tells me its uptrend seems a little blunted lately (but I've been very wrong about oil before). Looking for MUR at 100+ and USO at 115-120, at which point I might consider long-term puts on both. Stay safe out there.

Add SNDK to the list. It just fell like a rock. Earnings and down and they are cutting capacity to save $$$.

and down--> are down [sorry]

Cardiome COM.TO CRME
If you want a biotech to follow, put this one on your watch list. They've had a drug for some time. Recently they got some phase two proof of efficacy on the oral, which is much more valuable market than IV. They are looking for more partners or a takeout. Saw the CEO the other day and he says he's talking to names that you and I would recognize.
Saw analyst estimate of $13.50. More if taken out.

For windmills, look at Kaydon Corp. They make the components.

UYG - There's that swan dive I was expecting Friday. Lots more confidence in BOA than Wachovia and WAMU, and it really shows tonight.

Sure could'a used Kaimu's flashlight....

KDN - Kaydon, they haven't suffered too much lately... Tks, moab. I'll look into this tonight.

Anybody else have leads on the windpower side of Pickens' portfolio? I found some GE noise, where Pickens placed an order for Texas, And I know there's windmills galore going up in Texas already. I was in West Tx. last year and the trucks bringing them in would run you over almost. And I read somewhere the power lines had been approved to connect everything together. I know I don't have the entire story....but it's looking strong.

I was just skimming their 10Q. Kaydon has a $300 million backlog of windpower parts orders and are investing $70 million in expanding capacity.

Kicking myself for forgetting to buy puts on AAPL. Turns out no one has money left to buy ipods and macbooks - whoda thunk?

TraderGirl: on the road :) but it is quiet here :)

2nd: Yay google is going down down down but aint considering it till it breaks 440 again and the downward trend stops...

I saw this sign in the road today:

Do not pick up Hitcher Hikers
Correctional facility

That just disturbed me on many levels... As if they knew their security wasn't good enough and enough people escaped that this was an issue?

But it disturbed me more because of the reminded at how much of prison state the United States has become. I see way too much fear on the road, as I poke about...

Something doesnt feel right at the moment, but still poking about in Nebraska... that back of the neck storm feeling but no storm is about...

Getting ready to switch out of DVAX at decent profit... but I think it will head up a few more days, so being patient not out of greed but because of the trend lines... I will unload it sometime before August for sure, just waiting for the trend line to flip again.

ALOHA !!

Billy ... I mentioned buying puts on AAPL last week!

ALOHA !!

Casey ... I know you are all ZEN and stuff but I was in a prison riot. Ever been in one? Ever been in an American prison? How about a Mexican one? They're all bad ...

I will never forget that day as I was not sure I would live through it. I was just working there repairing a faulty cable connection on a TV in one of the housing units day center(more like day care). Even the baby rapers will come up to you and tell you how they are innocent and don't deserve to be there. How they were framed or got screwed due to having the wrong DNA or the test was flawed. A million reasons why they are the World's biggest victims of the judicial system. I spent about five years wandering the various California State Prisons as well as Folsom and San Quentin. I was working at Vacaville prison when the inmates tried to set Charlie Manson on fire tied to his hospital bed!

The economics will not support prisons for much longer so there has to be some new ways of dealing with criminal types other than warehousing. Perhaps uninhabited islands like the British tried! Some inmates now opt for military duty rather than prison! The modern version of criminals in London getting shanghaied to serve on Her Majesty's Man-O-War.

No matter there will always be criminal types and those who are uneducated or unable to care for themselves due to mental conditions or just plain lazy people. The responsible people of the World always end up taking care of those who are irresponsible. That is how it has been for ages!

I would say the best therapy is " hard physical work" ... even for those who are not inmates yet!

Bill
The chatter with yhoo is all behind closed doors now.
Press releases are all spinning a web of grade school rhetoric about Ichan being lured into the expanded board sets at yhoo along with his 2 other nominees, and yhoo bragging they put a gage order on Ichan's mouth.
I'll be the first to say that the media is feeding people a big dish of bull.
MSFT will have nothing to do with CEO Jerry Yang or the current BOD's that snubbed their nose at MSFT's 31.00 take out offer. Read between the lines, MSFT is number 3 in Internet search advertising revenue and growing market share quarter by quarter. MSFT tried to take the easy road and buy numero dous, YHOO.... but yhoo decided to kick the 500# gorilla in the testes in hopes of getting a windfall from MSFT. Right now with MSFT unwilling to even sit down and negotiate with YHOO, they have no other alternative but hire Ichan to negotiate any sell between the YHOO and MSFT.
MSFT doesn't really know how to handle a company that says no, other then walk away in disbelief, that's exactly what MSFT did. On the other hand YHOO, before they hired Ichan, didn't realize how far they could squeeze MSFT and and get by with. I'm sure they realize now, MSFT made their offer, and it's going to be hard to get anything more out of MSFT.
MSFT has closed the book on YHOO, they can survive with out the likes of YHOO and their arrogant 11 member BOD's, especially if Congress stops the duopoly advertising marriage between GOOG and YHOO. Looks like in all likely hood it will be stopped as an Internet advertising search monopoly.
What's the next step for YHOO if congress gives YHOO a hi-ho-hitler salute. Answer....(1) hire Carl Ichan. (2) Create a counter YHOO offer. (3) get Ichan the only person MSFT will be willing to talk to about the YHOO "oops were sorry," deal, to be their arbitrator.

Bought more YHOO today just in case my eight grade hunch is correct on the YHOO saga!

Wondering when the so called 'rally' will play out. I'm watching my morgage interest rates leap and this is certainly no fun with lenders playing hard to get. Thanks.

Kaimu - I definetly remember your mention on AAPL - nice call! Strange to me that the market managed to hold up AAPL this long quite honestly.......

---------------------------------------

On another note, I'm looking to add back (possibly tonight) the ERA.AX (Energy Resources Australia) which I had a succesful trade on a couple weeks ago - fits my profile in staying close to commodities and diversifying into foreign currency denominated shares.....and 10% of the worlds uranium output is a pretty strategic asset

I have checking account with Bank of America and just notice they charge $ 25 for Advantage Monthly
Maintenance Fee
For month of June and July. I have this account since 2006. And nothing was charge before
These charges are without my knowledge. What a rip-off.
I have over 19k in account

loannetter - I have a feeling you're not the only one feeling that way....

Kaimu also mentioned SBUX in similar context, if I remember correctly...

kaimu
We outsource very thing else How about outsourcing California State Prisons
To some other country and we ill save lots of money?

vinod - Call and tell them to credit back to your account. Then make sure to tell them not to charge this fee again.

I think Bush's plan to land on the moon should include shovels for a new penal colony.

Chickenpookie
Will do that tomorrow or will close the account
But, bigger question is when this Big and reputable Banks will stop this kind of rip-off?

Speaking of penal colonies, I was just out to the shed looking for my aluminum ramps and they're gone.

Gotta find another way to get the new freezer up the front steps...

vinod - BOA has been doing that for years now. I call it bait and switch. A big revenue generator for tham, I guess.... Until enough people get sick of it. They won't be happy until they've pissed away everyone's money.

O ye of little faith- that's right, i'm referring to not having enough in my own instincts...but as harrison would say, discipline over conviction-> in this case, it translates into a 0.4% loss over maybe a 2% gain...no regrets, really, over moving out of SKF and OEX puts near the close into 100% cash...there are other opportunities setting up as i post...

looking for ideas should a sell-off ensue? in case you missed the sunday WIR:

"Maybe not at these price levels, but not far off in some situations, I think a Bull case can be made for the likes of IBM (IBM), Intel (INTC), General Electric (GE), Exxon (XOM), Wal-Mart (WMT), Procter & Gamble (PG), Toyota Motor (TM), Research In Motion (RIMM), Google (GOOG) and a few smaller ones like Silver Wheaton (SLW) and Suncor (SU) and even a value play like Tata Motors (TTM). There are many European companies like Nokia (NOK), ABB (ABB) and Diageo (DEO) and Brazilian companies (several) I like as well.

My point is that if you are not watching these stocks, at least week to week, you will not be ready to execute trades somewhere near the cycle bottom. In a couple months there could be a massive sell-off that scares the daylights out of you, and if you are not prepared to let the falling prices come to you at that point, you will be too busy running with the crowd, and settling for smaller Total Returns in the future."

Posted by Posted by Bill Cara on July 20, 2008 06:05:55 PM

vinod- xlnt idea-> we could outsource to juarez, sonora, and tijuana...

"The confidence vote, set for late Tuesday and apparently extremely tight, centers on India’s deepening strategic and commercial ties with the United States. It is the first time in the history of independent India that a foreign policy disagreement has threatened to bring down a democratically elected government."

IBN may be good to buy, After vote,indian stock market will rally?
.

above qupte is from NY TIME

vinod- is there an ETF for india?

There is but I do not follow it, and right now do not remember it

vinod- found 'em: INP, PIN, EPI...

2nd,

I sometimes use a managed fund to play India....IFN.

Regards

BH- thank you...if you superimpose charts of PIN, EPI, IFN, INP, IFN (and of course, the Sensex), they're all pretty close...INP appears to be an ETN, as opposed to an ETF..

INP beware!!!
There are some issues with this one I believe due to govt regs. Check before buying!

Does anyone know a great website that lists dates/times of earnings reports of major companies?

Anyone who hasn't checked out my reference earlier today to Fibonacci retracements should compare it to tomorrow's price action.

Hey SteveC,

Does this help?

http://biz.yahoo.com/cc/

On another note. A friend of mine who lives in Bolton, MA, which is a relatively exurb of Boston has a friend whose property was just appraised at $620k. That is 8 months after it was appraised at $760K. MMMMmmmmhhhhh...might the subprime problem be spreading into prime. Doesn't make much sense to hold on to these properties at that price if you're waaaaay underwater.

SNDK Q2 2008 Earnings (lack of) Call Transcript.

http://tinyurl.com/6rh29d

same thing -- SNDK conf. call -- single page view.
http://tinyurl.com/5f8gty

Should be some interesting volumes tomorrow....

Here's a link to FINVIZ.com screener for semiconductor memory chips. (Thanks Leisa for site link)
http://tinyurl.com/6ewenh

Here are those symbols stuck in to the RSIapp tool
http://tinyurl.com/68r3l9

Finally, an extremely useful quote that Bill had on this site back on October 4, 2006 that related at the time to the housing market. It still applies now to other market sectors too.

"ADDENDUM

The operative words above -- just in case you missed it --

But the point I'd like you to consider " if you were selling the Home-Builders down in the Accumulation Zone during the Summer or buying them here after a top in late September " is why?

You study the companies in order to determine which company shares you want to buy or sell, and then you study the market prices to determine when you want to buy or sell.

When you trade: you trade prices, not companies. And because a price isn't say Black 14, you need to understand what the price is related to and the drivers affecting that price.

Posted by Posted by Bill Cara on October 4, 2006 09:48:56 AM | Category: Cara Today in the Market "

Hello Loannetter, I'm a NW neighbor, down on whidbey island. That makes around 5 of us Caraistas who live in or near the Sound.
peace
Gray

moab and CP... for wind energy, I have a watchlist as follows;
AWNE,AVAV,PWND,BWEN,KDN,APWR &CPTC. Made a few $ on BWEN and check it for a reentry point

:Wow. It's quiet here. Does this market leave us all speechless or are many on vacation?

I don't like being censored and I wish they'd stop.

If I were such an idiot, I never would have found the blog in the first place.

ALOHA !!

AMEX
What does this do for Bershire Hathaway over the long haul who is a large shareholder in AMEX(AXP)?

WOW ... a 96% decline in "card' profits! That is substantial. If GoldCorp(GG) announced a similar loss its share price would drop to $5 and stay there 10 years ... AMEX loses a few bucks then rallies over $40 the next week!

Here we have an analyst with a BUY rating on AXP yet he is speaking openly in this interview as to the many future problems AMEX faces over the next 12 months. Is the BUY rating for 2020?

READ ON:
``They're like any other consumer lender right now, caught behind the 8-ball,'' Craig Maurer, analyst at New York-based Calyon Securities who rates the company ``buy,'' said in a Bloomberg Television interview. ``I don't think the environment's going to be helpful to the company over the next nine to 12 months.''

American Express is ``no longer tracking'' to a prior forecast for 4 percent to 6 percent earnings per share growth for this year, he said. The company won't meet longer-term targets until the U.S. economy improves, Chenault said.

Profit in the company's U.S. card business dropped 96 percent to $21 million from $580 million a year earlier as provisions for losses more than doubled to $1.5 billion from $640 million. Uncollectible debt in the unit rose to 5.3 percent of loans from 2.9 percent a year earlier.

``We are seeing very affluent people who have had historically very, very strong spending history with us cutting back,'' Chenault said.

Discontinued operations related to American Express Bank Ltd., which the lender sold last year, resulted in a loss of $2 million, compared with income of $17 million a year ago.

Negative Outlook

American Express, Capital One Financial Corp. and Discover Financial Services shares have dropped by more than a third in the past year as consumers have a harder time repaying debt of all kinds.

Moody's Investors Service has a negative outlook on credit- card lenders and said defaults ``will most certainly'' rise this year. Stressed consumers are tapping plastic as access to home- equity loans falls off, New York-based Moody's said in a February report.

American Express's net income declined to $653 million, or 56 cents a share, from $1.06 billion, or 88 cents a year earlier, the New York-based company said.

I'm reading these facts about AAPL's earnings:

"Apple Inc. on Monday reported third-quarter earnings that rose 31% from a year ago as the company said Macintosh sales reached nearly 2.5 million units and iPod shipments also showed continued strength."

"But the increased sales of the iPod provided a surprise, as Apple said it sold 11 million of the digital media players, up 12% from a year ago."

"Apple also said it sold 717,000 iPhones during the quarter, nearly triple the amount it sold in last year's third quarter in which the iPhone was on sale for just one weekend."

The hit after hours was due to conservative guidance going forward, which is their standard practice.

Is there a pre-premarket for someone? At 7:30AM I attemted to place a premarket order for SNDK. I could see that there is volume @ 14.9, but Scottrade denied access stating that premarket does no open till 8:00AM.

@lessmore: Island is open from 7AM to 8PM. Check other brokers, e.g. Interactive Brokers

And Schwab states that premarket trades can't be placed prior to 8:05AM. At 7:57 AM the premarket volume on SNDK is over 120,000. What is going on?

Thanks TradersQuest.

Good morning.

Here are your Cara 100 Ratings Changes:

Downgrades:

SNDK - to Sell @ Citigroup
TEF - to Neutral @ JP Morgan

----------------------------------------------------

Have a great day.

Due to hyperinflation in the realm of 2,200,000 percent, the Reserve Bank of Zimbabwe released a Z$100 billion bank note on Monday; however, it will be unable to cover the price of bread.It will be worth about $1 US.
Coupled with about 80% unemployment.

One resident said, "Nowadays, for my expenses a day, I need about Z$500 billion."

Here,s the rest of the story......

http://tinyurl.com/6qzq9l