Tuesday - July 14, 2009

Screenshot from http://finance.yahoo.com/

Intel (INTC) had better than expected earning report. It jumped to $18.02 in after-hours trading. The company reported $0.18 adjusted earnings per share while analysts were expecting $0.08. Same time last year was $0.28, i.e. a drop of ~35.7%. Stock price at about the same time last year was between $22-24. If we discount 35.7%, stock price today would be ~$14.1-15.4. What else? Sales were down 15.3%. The company, though, has "clear expectations for a seasonally stronger second half". Can you interpret it as good news? I personally don't.
I always like INTC. I thought it is a nice company and Intel chip is almost present in every computer. I have been looking at it since January 28th, 2009. I had a little note in my agenda. It says $14.01 on that day. Now it looks expensive. Investors will soon realize that, especially when macro economy picture becomes clearer to them. It's just hype right now.
Volume in the markets is still very light these days. More earning report is coming out this week.

Monday - July 13, 2009

Screenshot from http://finance.yahoo.com/

The markets had huge gains today after a series of selling in the past week. Financials were up. Investors acted on the comments by a bearish analyst Meredith Whitney who upgraded Goldman Sachs (GS)to "buy" and also said that Bank of America (BAC)has value. It is believed that financial has to recover first before everything else does. Therefore these positive comments are taken as good news about economy recovery and outlook. GS is reporting its earnings tomorrow. I don't thnk GS is moving any higher tomorrow. Investors has already acted ahead of earnings and priced in any positive news.
Railroad operator CSX (CSX) reported its second earning today. The company reported 20% drop in earning and 21% drop in shipping volume. Considering that oil has been down significantly since last year and the company has already done some other cost cutting, the earning was still down. However, the CEO said that there are some signs that they may be seeing the bottom in many markets.
It looks like that once again people are optimistic about the economy and the markets. I am not though.

Screenshot from http://finance.yahoo.com/

S&P was up slightly +2.06 points.

Monday - June 22, 2009

Screenshot from http://finance.yahoo.com/

The markets slide today. S&P500 dropped -3% and is below 900. It is slightly below the 200 day moving average which is about 900.76. Oil dropped -$2.52, at $67.50 a barrel.
The drop in everything is partly due to the World bank said that it expected the global economy to shrink by 2.9%. It's last prediction was 1.7% in March. When the World Bank is seeing worse in economy, one can guess the reaction in the markets - exactly what we saw today - selling from the rally we've had since March.
I see today as a reality check. Investors are jumping too far ahead of fundamentals. Less bad news are not good news.
Unfortunately to me, Apple (AAPL) is still very high at $137.17. Steve Jobs had liver transplant. It looks like there is a chance that he will come back.
When S&P hits ~850 or Dow hits just below 8000, the market will be 10% from it's year high. It will be time to get in.

Friday - June 19, 2009

Screenshot from http://finance.yahoo.com/

The markets closed slightly up on Friday. Over the week, S&P500 was down -2.6%, the Dow was down -2.9% and the TSX lost -3.35%.
As summer is here, the markets are expected to slow down.
By the way, happy birthday to BFM! (bones has started shrinking) :|

Thursday - June 18, 2009

Screenshot from http://finance.yahoo.com/

The fall has paused after 3 days in a row. S&P gained +0.84% or 7.66 points. Volume was low though.

Wednesday - June 17, 2009

Screenshot from http://finance.yahoo.com/

Three days in a row the market has dropped. S&P500 is down -3.75% since last Friday. Volume is not bad. Investors seemed to be rushing to cash out from the earlier rally as they realize that the fundamentals to lead the market higher are lacking.
Fedex (FDX) announced it's latest quarter results which are better than expected; however, they issued gloomy outlook. They expect that their first two fiscal quarters in 2010 will be extremely difficult. I see transportation as a second messenger in signaling how the economy is doing. When businesses are good, the need for transportation increases.
President Obama released his plan for financial regulation. Analysts say that the regulation could hurt banks' profits and their competitiveness. The proposed regulation demands that, among other things, an increase in capital, which lowers the banks' leverage and potential profits. However, it might take 2-3 years for negotiation before the plan turns into law. How far the changes would be remains an open question. My view is that whether there is regulation or not, banking is the biggest player in the game of economy, just like in the board game - Monopoly.

Tuesday - June 16, 2009

Screenshot from http://finance.yahoo.com/

The market dropped second day in a row. S&P500 has dropped -3.6% since yesterday. Crude oil fell -$0.15 to $70.47 a barrel.
Building of new homes and apartments rose 17.2% in May, highest in the last 3 months. A large percentage of it comes from multifamily housing. This raises the supply and demand issue - the unbalanced one. There is already a huge back log of existing homes which will take 10.2 months to deplete (we've talked about it in my previous blog here). Adding more new homes to one side of the equation might not be encouraging to the market. It will drag house prices down more.
The Federal Reserve said industrial production dropped a larger-than-expected 1.1 percent in May as the recession hurt demand for manufactured goods including cars, machinery and household appliances.
Bestbuy (BBY) reported a weak Q1. Earning per share is better than expected but sales fell more than expected. BBY says it is expecting a difficult environment. Its stock fell 7%. BBY is the first major retail to report Q1. I guess we have a taste of how the retail market has been doing.

Monday - June 15, 2009

Screenshot from http://finance.yahoo.com/

The market opened low and remained lower. It was searching for direction last week. Investors have been cautious about the stocks going higher and the fundamentals of the economy. They chose to take profits today.
Today is the biggest one-day drop since April 20th. There are a couple of reasons (other than investors taking profit) causing stocks to slide. The New York Federal Reserve's general business conditions index dropped to -9.41 from -4.55 in May. This sent the stocks lower. Commodities and their related stocks fell as the US dollar gained strength. A stronger US dollar was a result of the Russians saying that the dollar is still a good world reserve currency. Crude oil finished at $70.62 per barrel, a drop of -$1.42.
Wal-mart (WMT) got downgraded by Goldman Sachs from "buy" to "neutral". It finished at $48.46 or -2.77%. I have always liked WMT though and I still do.
There are a few earning reports to watch this week: Target, Fedex and Research in motion.

Friday - June 12, 2009

Screenshot from http://finance.yahoo.com/

The market was moving in a narrow range today and ended in a slightly positive zone. This is the 10th consecutive day in which the market moved within 1%. For the week, the Dow gained +0.4% whereas the S&P500 climbed +0.7%. The TSX also finished the week with +0.7%.
Gold has had a 3-week rally and investors are seeking profits. Gold prices dropped 2.2% to finish at $940.5. Crude oil pulled back a little to $72.05 a barrel finishing the week with +5.3% gain. The Organization for Petroleum Exporting Countries (OPEC) lowered it's forecast for oil consumption this year in its monthly oil report. It also said that the world oil demand appears to be settling down as the world economy stabilizes.
Consumer confidence rose again but it didn't bring the market higher. As oil (i.e. gas) prices rising, people are going to cut back in expenses. They are also concerned about inflation and higher interest rates. The market seems to be in a tug-of-war. It needs big news to push itself higher.

Thursday - June 11, 2009

Screenshot from http://finance.yahoo.com/

S&P500 reached new high today since November last year. Oil rose +1.9 percent at $72.68, its highest settle since October. Supply seems to be sufficient, at least for a long while. People have also lowered the consumption as well. Expensive oil probably won't help the recovery of economy as costs of running industries are higher. However, a recovering economy will consume more oil.
Retail sales has improved in May, +0.5%, but it is still 9.6% lower than same month last year. The 30-year Treasury bond auction went well. It means that the government doesn't need to raise interest rates to attract buyers for their debts. Higher interest rates mean higher borrowing costs which would temper recovery of economy.
It looks like that we are going sideway.

Wednesday - June 10, 2009

Screenshot from http://finance.yahoo.com/

Market pulled back a little after the government sold $19 billion in 10-year Treasury notes in a relatively weak auction. Investors are worried that rising interest rates will crimp the economy's recovery.

New blog to talk stocks or markets

Hello all. I have been debating on whether I should have a new blog on stock market or my investments. I didn't want to do it initially because it's time consuming. However, it is a nice way to keep track of my own thinking and analysis of the market.

Trading stocks is my second job and my hobby. It's exciting to watch the market moves. It's satisfying to have correctly predicted how the market moves. Since I still have my main job, I need to focus during the day. I have a plan. I use about 1 hour per night to read news and research. I call that my homework. I then decide on my moves, if there is any, for the next day. I don't care about the market movement or news during the day, unless I am bored to death.

For the past few days, I've been bearish on the market. I haven't traded at all. I am waiting. I missed the March low because I was working on a few stupid manuscripts that were so terrible that my brain stopped working, almost. I believe there is still chance that the market comes down more. Economy is still bad. Job loss is still bad.

Good blogging!

About me

Trading stocks is my hobby and my second job. Biomedical research is my interest and my main job. Both of my jobs require intensive research on what's going on everyday. They both give me excitement and disappointment. Because of my expertise, I do pay more attention to biotech and pharma stocks.
Keeping this blog is like keeping a diary of the stock market. I hope it's useful to you as it is to me.