Börsipäev 22. oktoober
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Rev Shark:
Lose not yourself in a far off time, seize the moment that is thine.
-- Johann Friedrich Von Schiller
GOOG Morning. When the market makes a strong move like it did yesterday it is very easy to find reasons why it isn't justified and stay on the sidelines. You can almost hear the bears grousing about how illogical and unsustainable the strong action in technology stocks is. "Don't you know the economy stinks, valuations are absurd and consumers are burdened with a ticking time bomb of debt?"
There has never been a time in the market when the best current way of making money has not been criticized and denigrated because of worries and concerns about future events. There is always something to worry about and many market pundits make a good living doing just that. But if you want to make money now you must seize the moment. Take advantage of what is in front of it and forget the theoretic worries that may eventually come to pass.
Yesterday we had one of the best days of momentum in technology stocks that we have seen in some time. Volume was big at nearly 2 billion on the Nasdaq and the buying was broad and aggressive.
Last night it looked like mediocre reports from Microsoft (MSFT:Nasdaq) and Amazon (AMZN:Nasdaq) might put a damper on the upbeat mood, but Google (GOOG:Nasdaq) rode to the rescue. At first it looked like the numbers were weak and the stock dipped about $10. It quickly reversed and is now trading up close to 18 points. The buyers are out there and obviously want to keep this action going.
Interestingly, this strength comes despite generally abysmal earnings reports from some of the big semiconductor stocks, such as Broadcom (BRCM:Nasdaq), Intel (INTC:Nasdaq) and Texas Instruments (TXN:NYSE). However there has been some very good reports from secondary companies such as Cree (CREE:Nasdaq), Sigmatel (SGTL:Nasdaq), Tessera Technologies (TSRA:Nasdaq) and Diodes(DIOD:Nasdaq).
In the software sector there have seen stellar reports from the likes of Google, Verisign (VRSN:Nasdaq), Aladdin Knowledge (ALDN:Nasdasq), Symantec (SYMC:Nasdaq), Digital River (DRIV:Nasdaq) and Adobe (ADBE:Nasdaq). So this move is not without fundamental support.
I don't know how long the strength will last but it generally is a mistake to underestimate it. Even if some of the leaders begin to falter there are many secondary stocks that are ready to step up.
Early indications are slightly positive for the Nasdaq and slightly negative for the senior indices. The precarious technical condition of the DJIA and S&P 500 is a worry and could easily take a toll on the market. Crude oil was momentarily forgotten in the technology stock excitement, but it is still there and trading close to $55 a barrel.
It is going to be an interesting day. I've put on some Nasdaq-100 Trust (QQQ:Amex) short to hedge myself a bit, but I expect to do some long side buying in individual names again today.
Long SGTL, VRSN, Short QQQ.
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Gapping Up
GOOG +15.1% (reports strong Q3; price tgts move higher; up in sympathy: LOOK +13.9%, MAMA +11.7%, ASKJ +6.5%, YHOO +5.6%, EBAY +3.4%, INSP +2.8%), Also up on earnings/guidance: IIIN +6.9%, KLAC +4.9% (also CIBC upgrade), PKTR +4.8% (also Oppenheimer upgrade), HYSL +6% (also First Albany upgrade), OSTK +4.2%, CAMD +3.7%, TMWD +4.7%, IDTI +3.6% (also Lehman upgrade)... Other News: ADSX +13% (CNBC ran teaser for segment this evening on Implantable chips going mainstream; also co boosts cash by $11.5 mln), UTSI +5.4% (started with a Buy at Smith Barney; tgt $26), JAKK +4.7% (announces release of its newest World Wrestling licensed video game), APPX +4.4% (CIBC upgrade; short squeeze), STEM +3.2%, XMSR +2.6% (Reuters reports that co next week is expected to unveil a "wearable" device)... Under $3: ANCC +12.8%.
Gapping Down on poor earnings/guidance
LDIS -41%, OMCL -25% (also multiple downgrades), ABTL -15.4%, WEBX -14.1% (also 2 downgrades from Raymond James and Baird), IFIN -8.5%, AMZN -8.2%, GILD -7.3% (also Legg Mason downgrade), ERICY -7.1%, ALSC -7.1%, AEIS -5.2% (also CIBC downgrade), TQNT -5.1%, IPIEX -4.0%, BRCM -3.8% (also Raymond James downgrade), NXTL -2.1%.
