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Sabrient Divers – 02/02/2012


Top 5 Divers

Stock Rating Analysis
HSP STRONGSELL Projected value for Hospira is diminishing and long term growth rates are declining — someone throw them a lifeline.
CCL STRONGSELL Projected long-term growth for Carnival is going down, expected value is decreasing, and tough times are ahead.
EOC STRONGSELL We project an unfortunate decrease in value for ENDESA, and we’re not alone in this opinion as other analysts are also reducing expectations.
APC STRONGSELL Recent earnings changes for Anadarko are troublesome, as is a sinking projected valuation.
ALTR SELL Analysts are lowering long-term growth expectations for Altera, and showing agreement about short-term earnings declines as well.



Corinthian Colleges Call Options In Demand After Earnings Beat

www.interactivebrokers.com

 

Today’s tickers: COCO, IPXL & BEN

COCO - Corinthian Colleges, Inc. – Shares in the for-profit provider of post-secondary, career-oriented education programs increased as much as 44.2% to an intraday high of $4.37 at the start of the session after the Company’s full-year 2012 earnings forecast of $0.30 a share beat average analyst expectations of $0.24 a share. The stock is off earlier post-earnings report highs, but continues to trade up 30.0% on the day at $3.93 as of 12:30 p.m. in New York. Options traders positioning for shares in Corinthian Colleges to extend gains in the near term purchased more than 2,800 calls at the Feb. $4.0 strike for an average premium of $0.27 apiece. Investors long the calls may profit at February expiration in the event that COCO’s shares rally 8.7% over the current price of $3.93 to exceed the average breakeven point at $4.27. Bullish call buying spread to the Mar. $4.0 strike, where around 375 contracts were purchased for an average premium of $0.38 each.

IPXL - Impax Laboratories, Inc. – The specialty pharmaceutical company popped up on our ‘hot by options volume’ market scanner this morning after one strategist took a large stake in front-month calls. Shares in Impax Laboratories surged 10.85% to $20.93 today on news Impax Pharmaceuticals, the branded drugs unit of Hayward, California-based Impax Laboratories, Inc., licensed exclusive U.S. commercial rights to Zomig® from AstraZeneca. Zomig is a drug used to treat acute migraine headaches with or without aura. The options trader responsible for the single largest transaction in IPXL options today appears to have purchased 2,000 calls at the Feb. $20 strike for an average premium of $0.80 per contract. The size of the position is noteworthy relative to overall open interest of…
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Wall of Worry Wednesday – View From the Top

Here's your "rally."

You'd better be making money in the markets because your cash, your home, your savings, your income – everything else you have has been slashed 5% in the past 18 days in order to make you feel better about the markets.  Americans have roughly $100Tn in Dollar-denominated assets and it cost us $5Tn in less than 3 weeks to prop up the markets.  Was it worth it?  Will the next 5% be worth it too? 

Welcome to the World of weak-Dollar policies.  The Fed confirmed it's rumored $1Tn extension of QE on the 24th, by extending ZIRP through 2014 (and we did the math on the price of that policy last Thursday), $1Tn is nearly a 10% expansion of our Money Supply so of course the Dollar begins selling off but one would think the equally easy ECB would balance it out a bit but, so far, not at all as the Euro was already unnaturally weak against the Dollar out of fear of a currency collapse.  As that comes off the table, even the Trillions of Euros being shoveled into bailouts seem RESPONSIBLE when compared to our own Fed's constant money drops.  At least the EU demands to see some sort of balance sheet improvements before they hand out funds…

SPY 5 MINUTESo far, the chart remains the same and we have the same gap up from $131.20 on the SPY to our $132 ceiling (see yesterday's notes) that we have had day after day after day as the pre-market programs do their very best to give us the illusion of strength – even while our currency is collapsing and that $132 we can get for one of our SPY shares buys 5% less stuff than it did 3 weeks ago.  

But the chart LOOKS good and we got our official "golden cross" yesterday but, funny thing – it did not set off a buying frenzy – did it?  One might pause to wonder why buyers are ignoring the most significant technical buy signal the markets can give if one were inclined to think but that is an activity that is actively discouraged in America these days and believe me – they'll know if you try it!  

That's right, we are now arresting people for tweeting as homeland security yanked Leigh Van Bryan off a plane, detained him and sent him home…
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Sabrient Risers – 2/1/2012


Top 5 Risers

Stock Rating Analysis
ASBC BUY Many analysts are expecting higher than previously expected long term growth from Associated Bancorp, and its near-term earnings outlook is also improving.
BC BUY Brunswick has shown a remarkable increase in projected value recently, with the majority of analysts expecting higher than previously expected earnings.
KMT BUY Kennametal is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run.
CZZ STRONGBUY The recent earnings history for Cosan Ltd shows significant improvement while projected valuation continues to rise.
OKS STRONGBUY Many analysts are expecting higher than previously expected long term growth from ONEOK Partners, and its near-term earnings outlook is also improving.



Sabrient Divers – 02/01/2012


Top 5 Divers

Stock Rating Analysis
HSP STRONGSELL Projected value for Hospira is diminishing and long term growth rates are declining — someone throw them a lifeline.
CCL STRONGSELL Projected long-term growth for Carnival is going down, expected value is decreasing, and tough times are ahead.
FCX SELL A consensus is building that Freeport-McMoRan is showing weakening near term and long term prospects.
EOC STRONGSELL We project an unfortunate decrease in value for ENDESA, and we’re not alone in this opinion as other analysts are also reducing expectations.
ALTR SELL A consensus is building that Altera is showing weakening near term and long term prospects.



CBO REPORT – OMG!

Courtesy of Bruce Krasting

The Congressional Budget Office (CBO) is out with its annual report. It’s a blockbuster. This 165 page monster is filled with dozens of charts, graphs and detailed projections. It will be talked about for weeks. The report provides a dismal outlook for the economy. There is one data point I'd like to focus on.

Here is the CBO forecast for real GDP for 2012 and 2013:

 

 

 

The 1.1% Real GDP number for 2013 surprised me. The CBO’s expectations are way under those of both the “Blue Chip” economists and the Federal Reserve:

What does it mean if the economy is going to slow, as CBO now thinks? Some consequences:

 
.
.

 

The CBO now forecasts Social Security to run into trouble in just a few years. This is a very substantial change in the outlook for SS. Changed fortunes make it certain that America’s favorite entitlement program will be on the table for a significant re-vamp.

The CBO has answered two critical question:

1) In what year does SS first goes into deficit (including interest)?

2) What is the size of the SS Trust Fund when #1 has been achieved?

Key data is here:

 

 

Using this information, we can estimate the Trust Funds (TF) balances over time, and compare them to what SS forecast in its report to Congress ten-months ago:

 
SSTF's "Intermediate" (Base) case:

 

The bottom line is that the SSTF is going to top out three years ahead of “schedule” and be $800B shy of what it was “supposed” to be.

I think the CBO report has created a big headache for a good number of folks in D.C. Most of them are running for office this year. They certainly won't be able to wave the CBO report as a measure of how well they are doing.

 




 

Chart School

Apple Computer and Newton's Law of Gravity

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

The Power of the Pattern suggested that Apple could run up to $500 on a breakout of resistance. See the first chart below, which I included in my January 20th post here.


 


Click for a larger image...

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ETF Selector

Greece Makes Deal, Markets Yawn (VGK, VXX, FXE, SPY, DIA)

Courtesy of John Nyaradi.

After days of wrangling, Greek political leaders agreed to new austerity and markets yawned.

Greece made an 11th hour seal with the “troika” to cut costs further and impose greater austerity programs in its bid to get another round of bailout money, but even as the announcement was made, grumblings started as to whether the terms were enough to meet the conditions for the next bailout.

But investors greeted the news with caution, even skepticism in today’s market action.

The Dow Jones Industrial Average (NYSEARCA:DIA) gained +0.04% for a virtually flat day

S&P 500 (NYSEARCA:...



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Phil's Favorites

Economists Surprised Again By Unemployment Claims, Should Not Have Been

Economists Surprised Again By Unemployment Claims, Should Not Have Been

Courtesy of Lee Adler of the Wall Street Examiner

The mainstream media proclaimed an unexpected "beat" of the first time unemployment claims number today. The fake, seasonally fudged number dropped to 358,000 in the week ended February 4. According to Bloomberg, the consensus of economists' expectations was for 370,000. Aside from the fact that whether economists get a forecast right or not seems to be completely random, two facts stand out. First, the number that they are looking at is made up and fictional. Second the trend of the actual weekly number has been...



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Zero Hedge

CME Cuts Gold, Silver, Platinum And Copper Margins

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It has been so long since the CME cut gold and silver margins that frankly we are a little bit stunned... In an extended announcement, which saw outright margins for virtually every commodity get cut, the CME just lowered Initial and Maintenance margins of gold (by 12%) and silver (13%), to $7500 maintenance for GC and $16000 maintenance for SI. Did the paper bull trap season just open? And how long before these are re-hiked by 15%, 20% or more? For...



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Insider Scoop

How To Trade LinkedIn After Earnings

Courtesy of Benzinga.

On Thursday after the closing bell, LinkedIn (NYSE: LNKD) will be releasing its quarterly earnings results. Wall Street analysts have consensus earnings per share estimates of $0.07 heading into the report. The high estimate is $0.11 with a low estimate of $0.04.

Since the company only came public last May, there is no year ago earnings data. Over the last 3 months, earnings estimates for LNKD have been moving aggressively higher from a projected loss of $0.01 to the current consensus calling for a profit of $0.07 per share.

During this time, LNKD shares have risen 1.66%. In each of the last two quarters, LNKD has beaten Street consensus earnings ...



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Market Montage

Manoj Bhargava, the Man Behind 5 Hour Energy

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Manoj Bhargava.

Who?

Yes that is what I said too…

While this is a private company, I found it to be a fascinating story since it is always interesting to hear where these out of the blue blockbuster products come from.   I had no idea it was a local story as well.  I had heard Detroit Lions coach Jim Schwartz was at the Super Bowl, on the dole (i.e. pitching) 5 Hour Energy and it seemed like a strange connection, but now I see why he was a choice (again, local).   Believe it or not I've never imbibed any sort of energy drink such as Monster or Red Bull, nor have I touched this 5 Hour Energy...



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Option Review

Appetite For Diamond Foods Options Rises As Shares Tumble

 

Today’s tickers: DMND, MHS & TRIP

...



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Sabrient

Sector Detector: Quack, quack…ducks are lining up for the bulls

Courtesy of Scott Martindale, Sabrient Systems and Gradient Analytics

The stock market is behaving extremely well from a technical perspective. And why not? The world seems stable enough to give investors the confidence to maintain a “risk-on” allocation. Sure, there is still plenty to worry about. But more and more, investors are growing bolder. The Dow is at its highest level since 2008 and wants to challenge 13,000. The Nasdaq is at its highest level since 2000. 

All the central banks are joining forces to keep debt-laden countries solvent and prevent Europe (and by extension, the planet) from falling back into recession. And in this election year, the Obama administration is ensuring that all efforts are focused on supporting the economy and creating an environment conducive to job growth. History shows that re-election is nearly impossible o...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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OpTrader

Swing trading portfolio - week of February 6th, 2012

Reminder: OpTrader is available to chat with Members, comments are found below each post.

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here

Optrader 

...

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Stock World Weekly

Stock World Weekly: The Relentless Pursuit of Meaningless Metrics

NEW: Elliott and Ilene are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly, called "The Relentless Pursuit of Meaningless Metrics."  

...

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IRA Strategy/Income Trader

Weekend Virtual Portfolio Update 1/30/2012

Here is a quick update of past trades and our current position. AA Money No trade this week as we wait for AA to settle. Phil remarked last week that AA seemed overvalued. In the meantime, it looks like we might have to roll our Feb 9 calls. Good thing we sold only 5 of them against our position. Last week P&L - 310.00 We lost ground last week, but we still have 11 months to sell premium! FAS Money Very good week for FAS Money as we benefited from the large amount of premium sold the previous week. We covered most of the shorts in advance of the Fed speech, but sold another set of options on Wednesday after the speech - 2 FAS calls that expired worthless on Friday, 2 FAS put that we are still holding and 2 FAZ put that we bought back for a profit on Friday. A late stick comparable to last week's almost gave us problems at the end of the day though! Last week P&L - $4277.00 IWM Money A decent week in this virtual portfo...

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Pharmboy

Biotech Investing for 2012

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Finding new and exciting Biotech companies that target novel mechanisms is like trying to find a needle in a haystack.  Sure there are many companies working on cutting edge science, but investing in those companies to reap the rewards of their work is a very dangerous game.  More often than not, companies fail because the mechanism does not pan out, the compound(s) do not have pharmacokinetics (get into the body or last very long in the body), or an adverse event happens that knocks years off a development timeline.  In addition, the stock can be manipulated by market makers so investors don't know which way is up.  I approach investing in biotechs as a long term prospect.  I continue to like our current portfolio of biotech companies (join in chat for many of those plays), and we continually add/subtract shares and sell/buy options on ...



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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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