Tuesday Wrap-Up

Wow we held 11,000! See how you can learn to appreciate the little things during a disaster… Lots of weakness but a nice end of day recovery coupled with big volume but not in the SOX so I’m having a very hard time getting excited about anything that happened today. On the whole we would have been better off with a bigger drop so we could really see where the bottom is, these air turns (not off the dma) are pretty meaningless from a chart perspective. The S&P at least had the good manners to test its 200 dma at 1,260 but it went below it way too easily in the morning and again in the afternoon before the 3:30 buy kicked in: http://finance.yahoo.com/q/bc?t=1d&l=on&z=m&q=l&p=&a=&c=&s=%5Egspc The S&P is the only thing I care about tomorrow as it can do two things. It can form a big W on the 5 day chart and head back up to 1,280 or it can form a broken bounce and dribble out like the proverbial dead cat: http://finance.yahoo.com/q/bc?s=%5EGSPC&t=5d&l=on&z=m&q=l&c= Think of these patterns like an actual ball bouncing – does the bounce pattern show energy like a superball or sort of splat like a deflated basketball? As you can see from the sad little rebound we had today, this is no superball. HPQ was the tip off today – the company announced that they made 10% more than they thought (so their p/e is actually 12 next year) and that news was greeted with a 2% loss for the day. They did take a nice bounce off the 200 dma but that was with the whole market run at the end of the day so no credit to them. Oil ened the day flat after being down as much as a buck and the oil patch was down about a half point in general, making a 1 point comeback from early lows. Gold lost another $15 as commodities in general continue to free fall. Copper has been relatively untouched so far, down just $35 (10%) from it’s highs while PD and PCU are down 20%. CUP, on the other hand, is flying up against the tide and I will be keeping an eye on that one. On the bright side, Cramer has gone negative and that’s a great contrarian indicator to me but, as I keep saying, it is not my job to save the markets. Let’s wait for other people to get brave with their money and we will join them once they get the party started. ===================================== JOSB had a rotten day but recovered a bit and the Jul $40s finished down .10 at $1.30. These will be great if the market is recovering but I don’t think they will be able to fight the tide. ADBE posted another up day and the $30s are getting good respect at .95 (up 35%). At this point I think we will have to get out before earnings! Uh oh, the jig might be up on GM. Nobody came out of today’s meeting in much of a buying mood and there was even selling into the 3:30 market run up. Speaking of copper: FCX scrambled to get back to the 200 dma at $53 today which makes me think the miners are due for a little rebound but this is another sector where I would let someone else be the hero. SNDK mad a nice bottoming move today but the SOX are still dragging them down. Look for them and TXN to lead a breakout (if). Tysabri was approved but BIIB and ELN went down because the requirements for treatment are so stringent it will limit the market. Until a few HMOs get on board with the 23K annual treatment program and streamline the approval process these stocks, especially ELN will probably flatline. This is a great example of one of the 100 ways you can get burned in biotech no matter how great the drug is! GOOG finally got it into second gear today and the $410s climbed back to $1.90 (up 35%) which should be enough of a gain for those of you who cost averaged into the decline. Remember that anything over $393 is a surprise and tight stops should be set. MOT Jul $22.50s are very resilient at .60. Boy did we ever pick the righ horse on that SIRI vs. XMSR call. While Sirius has pulled back again to $4.20 (up 5%) XM is all the way down to $14 (down 22%) as both stocks suffer from poor channel checks at BBY and CC. At this point I like XM but not enough to actually buy it. SNE $45s for .80 will make a nice momentum play IF we get a Nikkei recovery and a good Nasdaq open tomorrow. We called the dead top on UNH Monday morning but I’m still waiting for a better entry on a new position. VOD is another one we got out with right at the top and those same $22.50s are back down to .55 where we started and bear watching for potential reentry. ===================================== Cramer is on TV raving about AUY but I think he’s nuts! The stock just jumped 5% on his mention after dropping 5% for the day. They hedged all of their production through 2007 which is quite a gamble but it is secondary to the gold mining operation but I don’t see the 1.3M oz gold projections to justify the $2Bn market cap. This company is up 250% since November and the strategy of hedging copper to lower gold production costs will blow up in their face if the price of gold drops $80. I guess my real issue with these guys is that they are pre-selling copper to raise cash to cover a $12M burn rate but the CEO is taking a $900K salary with another $1M going to other officers while the NAK executive team save money by taking $57K for the CEO and $43K for the CFO. NAK is sitting on deposits that you could throw all of AUY’s holdings into and not notice. NAK’s market cap? $500M. http://www.northerndynastyminerals.com/ndm/Pebble.asp It should be noted though that NAK is a 401K play as production is still 4 years out. I have been buying this on dips for some time but those dips have been getting more expensive each time!