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Testy Tuesday Morning

We ignored the low-volume sell-off and did a little bottom fishing yesterday.

I picked hedged entries on QLD, WMI and DPS that we were never worried about but we also took a shot with UWM $17s at $1.85, just looking for a quick move to $2.20+, as the market sell-off seemed a bit overdone considering only 2Bn shares were traded on the S&P, about 55% below the 90-day average, which is already fairly slow.  We’re not going to try to be heroes, those UWMs come off the table with a nice profit into the morning "rally."  Seeing a low-volume move like that tells us that a single buy program can quickly reverse the whole thing and there’s been a very observable pattern of buyers stepping in in the afternoon and giving us a "stick save" into the close, which is what we counted on yesterday

The low levels we held were in the lower end of our range: Dow 8,400, S&P 860, Nasdaq 1,500, NYSE 5,500, Russell 460, SOX 200 and 3,300 on the Dow Transports.  None of these levels are "good" and they are well below our "must hold" levels we set in our last Big Chart Review in order to get genuinely bullish but we expected the Dow to test the 40% line if the other indexes couldn’t break theirs and that’s right where we are.  Now we have our second test of 8,413 under our belt it is time for the indexes to put up or fall down, even in thin, low-volume environment.

Generally, we’ve been patient and looking to revisit the 8,200 mark before diving in but we’re getting a little more confident in our floor and our hedged entries are giving us 20% downside protection which takes us all the way to Dow 7,000 and things are just simply not THAT bad.  Nonetheless, I would encourage you to read my much gloomier outlook from the last Big Chart Review when I was downright bearish with the Dow at 8,824.  At the time my overriding reason was "we just got about as much stimulus as we’re likely to get between now and inauguration day" and our roller coaster physics have since taken over.  Now we are heading into the new year and we can expect investors to look ahead to the next round of stimulus – perhaps they will begin placing some early bets.

It broke my heart yesterday to see money herded back into energy and other commodities while REITs led us lower with a 5.6% loss in the DJR.  It will be tragic if DJR can’t retake the 50 dma at 140 as they broke a very nice uptrend and we’re prepared to give them a pass on the low-volume move but not for long.  We’ll be looking for the S&P to break back over 873 and hold it tomorrow in order not to get too negative into the holiday.  Friday is unlikely to be much of a trading day but next week we’ll be crossing our fingers for another run at 900 and anything less than getting back to our previous Big Chart levels by the 9th (just 7 trading days ahead of a new administration) will be very disappointing:

 

    2-Week 2007 % 50% 50 40%
Index Current Move High Loss Down DMA Down
Dow 8,483 -341     14,021 39% 7,011 8,656 8,413
Transports 1,753 -65       3,114 44% 1,557 1,734 1,868
S&P 869 -35       1,576 45% 788 889 946
NYSE 5,534 -105     10,387 47% 5,194 5,578 6,232
Nasdaq 1,510 -69       2,861 47% 1,431 1,558 1,717
SOX 201 -20          549 63% 275 209 329
Russell 466 -20          856 46% 428 474 514
Hang Seng 14,235 -1,169     32,000 55% 16,000 13,989 19,200
Shanghai 198 -19          588 66% 294 200 353
Nikkei 8,859 80     18,300 52% 9,150 8,465 10,980
BSE (India) 9,716 -360     21,200 55% 10,600 9,585 12,720
DAX 4,704 79       8,151 42% 4,076 4,675 4,891
CAC 40 3,130 -80       6,168 49% 3,084 3,257 3,701
FTSE 4,319 40       6,754 36% 3,377 4,212 4,052

 

Overall, this is not a pretty picture but we have some recovery in Europe, not so much as the index levels have improved but because the 50 dma has come down…  We love low expectations – we can beat those!  The NYSE and the Russell have the best chance of retaking the 50 dma in our markets but we do need the Asian markets to cheer up and get away from the 60% off line as China is a weight that is dragging the global markets down (as are the SOX!).

Speaking of low expectations – don’t forget we slam right into earnings as we ring in the New Year so forgive me if I wait and see a bit before making my 2009 predictions.  Obviously, I think the fear level is irrational and many fine companies are undervalued but I won’t be feeling too confident about that until we see some numbers and we remain neutral but happy enough to pick up some bargains as they present themselves for the moment.

[Tokyo Stocks]Asia was mixed this morning with the Hang Seng and Shanghai off about a point while the Nikkei and the BSE were both up over a point on a shortened session.  The Nikkei finishes 2008 with a 42% loss for the year and 52% off the 2007 high point.  Sharp announced they expect to take a $476M loss for the quarter and three Chinese steel companies are merging.

In Europe, the DAX is well ahead, up 2.25% while the CAC and FTSE are both up 1.25% 30 minutes before the US open.  Energy stocks and auto stocks are leading Europe higher on news of the GMAC funding (more stimulus) and the IMF endorsed Obama’s stimulus plan, so it will be interesting to see if our markets attract some foreign investment this week.  Germany got some good news with a 1% rise in Retail Sales for December but they seemed to be unique in Europe.

As I mentioned above, the big news for the US markets is GMAC getting $6Bn in government aid and it doesn’t stop there as a treasury official said the new program "didn’t have a specific dollar limit."  We are in F at $2.15 but we wouldn’t touch GM with a 10-foot pole…  You need a longer pole than that to touch housing as the latest Case-Shiller Index shows yet another record decline for October with home prices now down 19% in 10 major metropolitan areas and 18% off on a wider scale. "The bear market continues; home prices are back to their March 2004 levels," said David M. Blitzer, chairman of S&P’s index committee. He added that both composite indexes and 14 of the 20 metropolitan areas are reporting new record declines. As of October, the 10-city index is down 25% from its mid-2006 peak and the 20-city is down 23%, Blitzer said.

It will take us until February to see if the lower interest rates are helping us to find a housing bottom in December as this is a very laggy report so we’ll be keeping our ears to the ground for earlier signs of a turn-around.  So far, nothing is evident so let’s continue to be very careful out there!

 


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  1. Phil,
    I sent you an e-mail and Google talk message regarding my annual membership renewal Just want to make sure it was received since i want to complete transaction yet this year.


  2. Message/High – Most likely it went to Greg and I’ll get it this morning, I’ll make sure.  That Google talk is something we never use and we need to delete the reference to it…

    So we’re getting a cute open so far.  I’m watching DRYS as it would seem strange for commodities to hold up but commodity shippers don’t make any headway. 

    Nigerian Rebels are back from vacation, making threats if oil prices don’t go back over $50 (or whatever they pretend their reason is).

    Nonetheless, oil is backing off and XLE and OIH are red at the moment, which makes me like this small rally more if it sticks and they stay down.  Seems like ags are having profits taken too with much of yesterday’s gains dissolving fast.


  3. GOOG making a move, Airlines doing well…

    MDT got some kind of upgrade at McAdams but aren’t moving.  I like them long-term and the 2010 $25s at $7.75 can be offset with a 1/2 sell of the Jan $30s at $1.45, which can be rolled to the Feb $32.50s about even if all goes well and easy to adjust otherwise.


  4. Phil:
    on a slow day, can you comment on strategy check for hedged stock positions for 2009:

    primarily, let the calls and puts expire, particularly if stock goes sideways.
    if stock heads up, could stop out the caller, what criteria to use to make that decision ?
    if stock heads down, could stop out putter, what criteria to use to make that decision ?


  5. V is running counter to the financials.  I’m pretty sure they use credit cards in Germany too so I like the idea of trying to sell the Feb $50 puts naked for $5 (now $4).  Also, buying the stock at $51 and selling the Feb $47.50 puts and calls for $9.30 puts you in at net $41.7/44.60, a 14% discount if put to you.  The 50 dma is $52.25 and that’s what they fell through yesterday so we’ll watch that line as well as $50, which should hold up as a floor.

    Overall, nothing very exciting so far but it beats being red at the moment.  Volume still not there at all and we have a long way to go before we are proving anything…


  6. Phil – We often discuss (and use !) matress plays with DIA puts to protect a portfollio from a 300pt drop but what if you had a bearish portfollio and wanted to protect from a 300pt rise !! Would you use DIA calls ? Which ones and how would you play that ? Thnx


  7. Strategies/RMM – Primary is to make money selling, not buying options.  If stock goes up, we take out the caller as a momentum play so we would have to have a more than 66% certainty that the stock will keep going up.  It’s kind of like waking up in the morning feeling good so you cancel your life insurance policy and health care – you need to be a little more certain than what you are going to see in a quick move, especially in this crazy market.  Same goes for stopping out the putter EXCEPT it is naked so we are more inclined to roll it down or stop it out if our stock breaks below our safety net (usually 20% off).  Any time the stock drops below the net average entry if it will be put to you – we really need to reevaluate our position.

    DIA calls/DB – Well, it’s the same thing going the other way but we use DIA going down because we feel they are the index with the most to lose in a crash.  To the upside, we don’t really feel like they have the most to gain.  I’m more in favor of the QLD/QQQQs or the RUT/UWMs to the upside but, also, you may want to consider going long on the sector ETF that most closely matches your short bets.  Let me know which ones you think match and we’ll look at good set-ups for you to cover with.

    Oil, gas and solar getting sold but so are the REITs (still).

    Consumer confidence at 38, down from 44.9, that is TERRIBLE and should kill the rally (such as it was).  Chicago PMI was 34.1, up a touch and a point more than expected.  Tomorrow we get another 550,000 people thrown out of work and Friday we get a dreadful ISM index so let’s not plan a party until next week at best…


  8. Phil: TXS for answer 10:02, this helps,


  9. phil, can you comment on a TLT-TBT trade, they have broken their trend lines


  10. Phil:
    Next to the portfolio, I have often done daytrades with the goal of making 1000$ per day (and not loosing more than 10% if it goes the other way ),
    Can you point out opportunities which might have a high chance to achieve this ??


  11. Bearish cover/Phil – I’m short Oversea markets – EEM, (emerging mkts) RSX (Russia) and EWZ (Brazil) . Not sure where to cover that at all ! Also short Oil and Oil Services – USO, ATW but covered with CCJ and FSLR as alternative energy. Also short Semis NVDA, LLTC but covered there with ILMN. Short Retail with BBY and WFMI. Not covered. Also long Medic/Health care with UNH, IART, IBB and BCR.
     
     
    So the main area I want to cover are the shorts in overseas markets, oil and oil services and retail when they bounce with the market. (Bit like today !) THNX


  12. TLT/Greg – Well they sure ran out of gas for now.  We know that 120 is long-term unsustainable but that doesn’t mean it can’t go higher before getting real so do be careful with these.  I think playing TBT up is going to be more rewarding than playing TLT down.  You can pick up the June $30s for $10 and sell Feb $38s for $3, that puts you in for $7 on the $8 spread with 3 more months to sell.  If your caller goes in the money, you can add higher long calls and you’ll be well covered on the whole position.

    Day trades/RMM – I point them out when I see them, like UWM from yesterday that was a quick 20%.  You could take V right now at $50.50 with the $47.50s at $4.20 ($1.20 in premium) as those are nice and liquid and were $6.50 yesterday so not greedy to look for $5+ with a stop if V falls below $50.


  13. LINE taking off yesterday and today, even with gas down.  Looks to be a bump due to a Barron’s article.


  14. Phil,
    MA / V – why do you like V more than MA?


  15. Phil/RIMM
     
    I am 25% into my long stock position in RIMM. Currently, my cost basis is $37.52. I’m looking at covering a portion of the position by selling a couple calls (protection over the holiday). I’m looking at the selling the Jan $40s for 1.85. However, I think the Feb 40s are more appealing at $3.50. OR should I be looking at the  ITM Jan $36.625s at 3.65? 
     
    Thanks!


  16. i have uyg stock at $5.58. hoping for a price increase, i held  off on callers. yesterday, you commented that c is likely to be stagnant for the short term. do you feel that the same situation in regard to uyg? what callers would you recommend? thanks


  17. DB – Why are you short LLTC?   I have no position at the moment, but I’d like to get into the stock on a dip.  As a high div, non-commodity chip maker they are on my radar as a possible long-term hold.  What don’t you like about them?


  18. Wow, DB the Bear!  I think short semis may be a little played out and short BBY and WFMI with no cover makes me nervous too.  I think you can cover those by going long on the Qs or the QLDs.   The QLDs I like a lot because they are just so low here.  You can offest the premium of the July $20s at $8.90 by selling the Feb $28s at $2.25 which puts you in the $8 spread for $6.65 and, of course, the Feb $28s can be rolled to Apr $33s and that’s your double.  Covering the emerging markets is really tough but maybe go long on China (the best of the worst) by playing the FXI up.   FXI 2010 $20s are $10.65 ($2.30 premium) and you can pick up $1 for the Jan $30s which can roll to the Feb $33s etc. etc.

    OIH and XLE still red so I’m liking today so far.

    LINE/Pharm – Yes Barrons stood behind their 21% dividend and we missed it yesterday and I sure wouldn’t chase it today.

    V/Fab – I hate to say it but I don’t remember anymore.  I know I looked very closely at them in the Spring and decided V was the stronger contender overall but they both fell a ton since then so it’s probably a toss-up but V is very well behaved in their range and that’s reason enough to like them.  I would like MA more back at $120.

    RIMM/Texas – If you are 25% in at $37.52 why not set up for another round by selling the Feb $35 puts and calls for $8.60.  It drops your cash basis to $28.92 and pays you more if called away at $35 than if you simply sold $40 calls now right?  If put to you, you will be 50% in at $31.96, a nice drop from where you are now as you would need RIMM to fall to $26.40 to get the same basis on 2 rounds.  This leaves you nicely protected into the holidays and you can always spend a buck or two to roll the caller higher if you don’t want to lose it and you would still be no worse off than if you simplly covered with $40s now.

    UYG/Drum – If C is stagnant, they are probably stagnant too although today they are up 3.5% with C flat (BAC is red too).  If your basis is $5.58 and you are not looking to write the Feb $5 puts and calls for $1.85 (which I favor) then just selling the Feb $5s for $1.17 lowers your basis to $4.41 with a 15% gain if called away and that’s not very exciting but it is fairly safe.  You can also move to 2x the June $3s at $2.88 and sell the Feb $6s at .68, which nets you more per month and has more upside potential (and more downside risk) than just owning the stock with this low VIX.

     

    Wow, up over 100!


  19. EPH/LLTC - mainly because part of their output is destined for phones, cellular and ethernet networks and mp3 players (they do much more besides) and I see a downturn in those areas for at least the next 6 months.


  20. Phil: you said under 11:38 to DB; then you are in a 8$ spread, is that good or what, when you say that, what are you trying to emphasize ?? Please explain.


  21. Phil,
    I have a feeling that this rally has no legs and it is fragile. I am thinking about shorting X going into the holiday. Thoughts?


  22. Why are steel stocks soaring ?


  23. PHIL/DB "The bear" – Thanks – QLD looks good. I’ll let you know how that pans out in the next few weeks.


  24. QLD up 10% from yesterday’s bottom, you have to love that one!  WMI off like a rocket today and UWM well over our target price so not a bad day of bottom fishing yesterday…   DPS is the only one that’s still cheap.

    SOX up 3.6% and the rest are up about 1.5% which is reflected in the sector chart below.

    There is still no volume but today there are no sellers instead of no buyers so this whole thing can reverse on a big sell program but it is nice to see some life in our old favorites for a change. 

    $8 spread/RMM – I mean there is $8 between the strikes and the positon is almost entirely in the money, which is just about as good as spending the extra $20 to own the stock from a gains perspective.  When you are setting up a long cover position, your goal should be to see your way clear to a double so you can budget for it and making sure you see a double with no premium is your best chance of insuring that.  Going up slowly isn’t a problem, it’s going up quickly that has to worry you on insurance plays because it means your opposite bets are getting crushed so you’d BETTER be making up the difference.

    BA made a nice bounce off $40 and I’m starting to feel good about this being a floor.  Selling Feb $35 puts naked for $1.30 is a nice trade and you can cover with $22.50 puts at .15 so it’s $1.15 up on $12.50 at risk Also, nothing wrong with owing BA at $41 and selling the $40 puts and calls for $3.45, which is just $37.55/38.78 but a nice quick entry if you do want to own BA.  I don’t know how people think the government will bail out the big 3 but would be willing to let something bad happen to Boeing, who employ just as many people with maybe more people down the parts line than GM or F..

    X/Emo – I wouldn’t short them, they are too beaten up down here.  They took a nice bounce off the 50 dma at $33.50 and consolidation of China steel and 10% global production cutbacks plus the aid package for GMAC are all good things for X.

    Steel/RMM – see above!


  25. UK closed up about 1.7%. Dollar strong against the Pound today.


  26. RUT stuck at the 50 dma at 474.50, we need them to break up in order for the other indexes to have a chance to improve.  NYSE beat their 50 at 5,578 and that’s the line we need to hold to keep a nice gain for the day.  Qs are also worth watching between 29 & 30 to see which way they will lead us.


  27. Conglomerates with a 100% flip from yesteray as are Autos on our sector chartg so no wonder the VIX is down as we net accomplish nothing after 2 days.  Autos are still down 15% for the month as our worst performers (along with energy) and all these gains will give us very few greens for the month but we are getting mainly back to zero except for Autos, oil, Consumer Discretionary (still down 3%), Computers (down 3%) and construction (down 1.5%) but pretty much all the rest is within 1% of flat over 30 days – Yawn!


  28.  Hi Phil,
     
    I’m starting to convert my T (2K of them) shares over to the jan 2011 20′s.  These are pretty low in volume and I was wondering if you had any advice on to how to enter into these calls?  I picked up 5 contracts yesterday for 9.50 to start.  I was basically playing around putting in limit orders below the current ask.  
     
    Also, about entering into GLD, any advice on how to do that these days?  It seems to have had a slight runup yesterday and friday.  The buy GLD, write puts/calls play seems like a mild discount, but the Jan 11 50′s instead of stock seems even better?  Could possibly get close to wiping away the call premium with one shot.


  29. Shit!  What happened to AAPL??


  30. What happened to AAPL?


  31. Is there an echo in here?


  32. :
    Apple’s Jobs health ‘rapidly declining,’ according to source-Gizmodo

    According to a source that Gizmodo says has been 100% correct before, Apple (AAPL) misrepresented the reasons behind the cancellation of Steve Jobs’ keynote presentation at MacWorld. The sources says the cancellation was due to Jobs’ health and that it is ‘rapidly declining.’ Reference Link :theflyonthewall.com


  33. T/Chen – That is the way to enter them!  Just offer a low number and see if someone takes it.  Of course yesterday was a good day to do it as we were heading down and today is a bad day as the markets are up so simply wait for another day is best.  If you are converting the stock, your stock has a better upside delta than the calls you are flipping to so you should never worry about it heading higher on you – ultimately, if the $20s get away, there’s always the $22.50s for $1.40 less.  Looking at the spread now though, I’m kind of surprised you can’t get $9.50, that seems more than fair.

    GLD/Chen – You are right on those, you don’t need to own it with those longs.  I’m happy with the 2010 $70s at $22.40 with $7 in premium as that can be worked off selling whatever calls are $1 each month, which is a farily safe cushion (Jan $92s at the moment) that leaves you plenty of room to grow.  When you are substituting a leap for ownership, simply eliminating the premium over the course of the year is enough if you want to make a bullish long-term bet.

    AAPL took a power dive!  Watch your Qs!


  34. AAPL RUMOR – Day before a holiday, little chance of getting a confirmation or denial from AAPL as key execs aren’t reachable – most likely BS and that makes the $90s at $2.50, which were $3.50 this morning a fun play with a stop at $2, looking to get back to $3.50.


  35. You would think that after a dozen times AAPL tanked on the rumor that everyone who wanted out is out.  I guess they wont’t sell any ipods  if he is not out there peddling them.   Almost pushed the buy button when it hit 85.


  36. Also there is a rumor floating around that Cramer says that Apple will warn on the Q.  This is typical pre-holiday BS!


  37. RE T: Yeah, I just wasn’t sure if 9.50 was still overpriced or not since the spread is so huge.  The "mark" column in TOS shows it’s 9.32 so I’m guessing that’s the theoretical value of the option currently?  Also, should I still get leap puts on T to protect myself from doomsday scenario?  If so, which ones should I be targeting, OTM or deep ITM with minimal premium?
    Ah, for GLD, we want to write options far enough out so that if GLD does have a runup, we can still get called away for a profit?  And while we’re waiting for the runup, we accumulate some low risk bucks?


  38. Hi Phil,
    Looking at a long-term position in MSFT.  Yesterday you spoke about the Jan 2011 15s for $6.75--am wondering why you don’t prefer the 10s for $10?  Just wondering about your logic/reasoning here.  Thanks.


  39. Notice the timing of this article that hit the Mac Daily News at 12:09, just ahead of the rumors.  This way, the hyenas who plant the rumors cause GOOG to bring up a "legitimate" news story concerning Jobs’ health to make the whole thing seem legitimate.  Don’t forget MacWorld is next week and these attacks often occur ahead of AAPL events.

    Here’s some real news on AAPL, IPhone browser share jumped 36% Christmas week.  57% of all mobile browser requests came from IPhones, up from 42% the week before Xmas so either a lot of people opened up IPhones under the tree or they are just so darn usesful that people who are home for the holidays use their IPhone like a computer.

    Also, AAPL just announced a deal to do Ebooks on IPhones and ITouch and that is the intermediate step towards the IPad, which should be a 2-3x size version of the IPhone that takes the place of a Kindle or a laptop or a notepad or…

    T/Chen – You know I like VZ better right?  I’m worried T gave too much up-front money to AAPL and FIOS makes VZ a winnner for the next few years.  T never went below $23 for more than a day and a $5 down move in T would only cost you about $3 on the leaps (the cost of the 2011 $25s) so, if you are already selling calls to cover, also buying puts and betting against yourself is a little counterproductive.  If you are that worried about it, T may not be the stock for you but you could cover with July $27 puts for $3.60 and sell the Feb $25 puts for $1, which would take some of the sting out of a drop but you can’t cover everything and make money.  Right on gold, we’re just looking to zero out the premium while keeping as much upside as possible since an escalation in the Mid-east could have you waking up to $950 any given morning.

    MSFT/Bill – Over 2 years I don’t mind the $2.50 in premium in exchange for not tying up $3.15 more money.  If you are uber bullish on MSFT and just looking for a cheaper way to control more shares, the $10s are great but the $15s put you in a position to sell the same monthly calls as the $10s do and they also have a lower downside delta with just 25% less upside.  For $9.95 you can take the 2011 $10s and sell the Feb $20s at $1.15 for net $8.80 or you can take 2x the $15s at $6.80 and sell 2x the Feb $20s for net $11.30 with better downside protection on 100% more shares for 28% more money.


  40. Dead cat bounce on AAPL but like Phil said above just too many good news on the products.  Maybe I will still get a chance at 85.


  41. SingaSteve: daytrade what AAPL ??


  42. RMM
    I was hoping to get out of my AAPL jan90 when it was going up to 88. 10 cent or less spreads on aapl where isrg was about 70 cents.  Made a play on ISRG for a day trade but so far just flat.  This Job’s thing just screws up trading AAPL.  i think he has died about 5 times by now.


  43. Interesting Google search results on Xmas morning…
     http://www.huffingtonpost.com/2008/12/25/christmas-morning-google_n_153452.html


  44. Anyone use Prophet charts in TOS??  No data until 2pm on them.


  45. Very interesting way for AAPL to make new highs every day

    GOOG/Crisco – Ukulele chords came in #16 nationally?!?  What the hell is happening to this country? 

    Well they flipped oil positive into the close.  If the same guys who manipulate oil were put in charge of AAPL for a week, it would be a $120 stock again…


  46.  Re VZ/T:
    Yeah, I’ll look into VZ, maybe instead of 100% switching over to T leaps, I’ll put 50% into VZ.  I’m already half into the T leaps, got a fill for another 5 contracts at 9.45 this morning for the jan 11 20′s.  I’m going to do more homework on VZ vs T first so I understand as much as I can.


  47. Up vol about 3 to 1 over down  and advancers about 2 to 1 over decliners.  Internals still look good but it seems like we have stalled.


  48. X really got going today.  GOOG not so much…

    Looks like we’re setting up for another run at the highs but I doubt we have the energy to break over.  Tomorrow will be even thinner volume though so if they are determined to get back to our mid-points (8,650, 900, 1,550, 5,700, 480) then they can sure get it done tomorrow morning.  Not sure what it will prove overall but I guess they know how they want to year to end.


  49. GMO up 17%.  Need to put moly in your steels.


  50. TEVA with a big downturn suddenly.  That’s the problem with low volume gains, it takes very little to reverse the trend.

    GMO/Steve – good thought on moly..

    Damn that RUT is just stuck at 474.50!  881 comes up again as a tough spot on the S&P too so it’s not looking like we’re going any higher but who knows what the last hour will bring…  Just seems like a lot of effort has been gone to only to have the Dow (8,656), S&P (889), NYSE (5,578), Nasdaq (1,558) and Russell (474) finish just below their 50 dmas.  As I predicted in the post, we hit it on the Rut and NYSE but the others are still giving us trouble and we still need them to pop the RUT and break the dyke so the others can move up.  Maybe that’s why CNBC just had a guest talking up small caps.


  51. ADBE with huge volume on the Feb $22.50s for $1, if they come back to .90 I like them as a gamble along with the guy who’s been buying them like nuts.


  52. UA products must suddenly be in demand for the New Year  :-) +4.5% in last 2 hours or so


  53. GS going ballistic.


  54. Hmm, all financials turning up – I didn’t hear anything in particular but we were expecting some shenanigans to boost the market into the close so I guess this is it – let’s see how far they go.


  55. So is the $6 Billion to GM/GMAC worth 130pts on the DOW ?


  56. Autonation guy says the auto customers are willing to buy but credit issues are turning them down at the sales desk.  I suppose this GMAC deal is a nice step in the right direction and they are lowering credit score requirements which will also be helpful (but may cause other problems long-term).

    Getting 130 points for just $6Bn is a bargain these days…

    Nice to see energy sector still at the bottom of the list below!


  57. Shenanigans is right.  They want them nice and fat before they get slaughtered for earnings.
     
    Phil, do you know if there is any incentive for particular firms to wait until the new year before selling?  For example, perhaps they’ve realized all the losses they want to for this year (perhaps to preserve a profit or minimize their loss) so they’re waiting till ’09 to book new losses in the hopes of offsetting them with gains over the course of the new year.  Sound plausible?


  58. Happy New Year to all!  Talk with you on the boards on Monday!  Phil, thanks for the help over the year….hope next is better for all of us here.  Over and out.


  59. Losses/Matt – Most firms would be set up to carry their losses forward so I think most of this is simple EOQ window dressing to set up for next year.  It’s nice to be able to send out a report next month that says you bought AAPL at $85 and GOOG at $300 and GS at $75 – it’s the kind of items a fund will always be happy to stand behind and always make a good story to tell people what a great stock picker you are.

    8,670 was last Monday’s high on the Dow so that should be it for today as well but this was a very impressive display by the PPT or whoever is in charge of shoving all our indices over the 50 dma today.

    Happy New Year to all of you not hard-core enough to play tomorrow morning!

    I have a meeting and must run but I’ll be back later.


  60. Ukelele
    Check out Jake Shimabukuro onthe ukelele.  We saw him a few years back and completely changed our view of this instrument.
    http://www.jakeshimabukuro.com/?t=videos
    Ether


  61. The whole GM thing is a joke – GMAC loses money because it makes loans to people who cant pay them back to buy crap cars it cant sell so the government gives them $5billion so they can become solvent enough to make loans to people who cant afford them to buy the crap cars they are still making. And this helps how ?


  62. Interesting – The Street posted this article on CCJ , which if you just scan it makes it look like CCJ released good earnings today. Whereas the report refers to 3rdQ earnings in Nov


  63.  Found this at USA TODAY, looks like more anecdotal evidence Appl had a strong Xmas:
     
     
    Big boost in holiday Web traffic for HP, Apple
    var yahooBuzzArticleId = ‘usatoday:http://blogs.usatoday.com/technologylive/2008/12/big-boost-in-ho.html?csp=34‘;
    yahooBuzzArticleIdBuzz up!
    Like this story? Share it with Yahoo! Buzz

    Online sales, as noted several times this week, took a small hit this holiday season — falling 3% to $25.5 billion, according to a study out today from market tracker comScore Media Metrix.
    However, what’s really interesting in the comScore study is which sites did well — and which ones did not — from Dec. 1-24.
    Auctioneer eBay, for instance, saw its traffic fall 4% though it remained the most-visited e-commerce site, while Amazon climbed 7%. HP was a big winner, with traffic up 28%, as was Apple, whose traffic rose 19%. Best Buy’s traffic was flat; Wal-Mart saw a 4% increase, and Target’s fell 1%. Toysrus fell 9%, as Sears rose 2%.
    By Jefferson Graham


  64.  Look like Apple may have had a good Xmas…
    http://blogs.usatoday.com/technologylive/2008/12/big-boost-in-ho.html


  65. [...] the strongest in the past week, which is a good way to break those 50 dmas we discussed in our Big Chart Review but, so far – this is only EXACTLY what we expected to happen for the week so we took the money and [...]