Börsipäev 10. november
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Rev Shark:
Be Vigilant as the Market Walks the High Wire
11/10/2005 8:50 AM EST
I've never forgotten for long at a time that living is struggle. I know that every good and excellent thing in the world stands moment by moment on the razor-edge of danger and must be fought for -- whether it's a field, or a home, or a country.--Thornton Wilder
The market continues to act extremely well, but it would be foolish not to recognize that we are always walking the razor-edge of danger. The biggest problem this market faces now is that the bulls may be a little too cocky and overconfident. When they forget that good things only come through struggle and that the chance of a something negative always is out there, they set themselves up for a fall.
The most remarkable thing about the action the last several days has been the resiliency. Although the major indices are all technically extended to some degree, we have barely pulled back at all. The market can consolidate gains by simply running in place, but normally there are enough folks with short-term time frames who desire to lock in profits that there is net selling picture.
The only reasonable conclusion that can be drawn is that there are a lot of folks anxious to put capital to work on a dip. In fact, they are so anxious that they don't even allow the indices to pull back more than a few points before they jump in.
The major danger the market faces is that those dip buyers may be scared away for some reason. Just because they have been out there the last few days doesn't mean that something can't happen to make them less enthusiastic about being in the market. We have to monitor the action of the market on a pullback very carefully. If the bids start to disappear, speculative action slows, breadth drops and then we need to become more cautious very quickly.
But for now, the market continues to act extremely well. There seems to be a good supply of underlying buyers who are looking for places to put their cash. Crude oil has been soft, which is helping to relieve some pressure and provides a source of funds looking to rotate out of energy names and into other sectors.
The Cisco (CSCO:Nasdaq) report was OK last night, but the guidance was soft. Cisco falls into the same category as Dell (DELL:Nasdaq). It was a major influence in the past but has now grown to the point that it is almost a commodity producer, rather than an innovative growth stock. There may be some fallout from Cisco, but like Dell, the market is not likely to be too concerned about the struggles of a mature elephantine company that has been a laggard for years.
For now, the market is walking the razor's edge. Danger lurks if we slip, but the potential for gains is high if the bulls can continue to maintain their balance. Our job now is to be extremely vigilant and to be prepared to act quickly as the market walks the high wire. Don't be overly anticipatory here. Let the market tell the story and be ready to react.
The early action is slightly negative. Overseas markets were generally positive, as interest rates were left unchanged by the Bank of England. Oil is down a bit again and gold is flat.
Position: No positions in stocks mentioned.
Gary B. Smith:
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Banc of America cuts their General Motors (GM) tgt to $16 from $18 and raises their 2-year bankruptcy risk to 40% from 30%, following last night's news that GM said it erred in recognizing some supplier credits. Firm also cites a $3,500 per unit competitive disadvantage, increasing evidence that hidden liabilities exceed hidden assets, the likelihood suppliers will balk at investing with GM, and their belief that existing liquidity may only be enough to get through a bankruptcy reorganization. Separately, they note that Watson Wyatt (WW), who is believed to be largely responsible for GM's independent actuarial assumptions, has been subpoenaed by the SEC. Reits Sell.
UBS added DR Horton (DHI) to their Top Picks List. The firm says as price appreciation slows, EPS growth will increasingly depend on mgmt's execution strength and DHI has consistently proven this capability. Firm says DHI's broad product line and geographical diversity, combined with mgmt's expertise, should drive unit growth as industry demand slows. Down 27% from its mid year high, DHI trades at 5.3x the firms, CY06 EPS, below its avg of 8.9x and range of 3.7x-19.8x. Täna eelturul kergelt plussis. Viimase aja negatiivse suhtumise taustal ei usu, et positiivsust kauaks jätkub.
Citigroup initiates Flextronics (FLEX $9.83) with a Buy and $13 target, as they believe negative news from the September quarter results appear reflected in the share price and new business projected to ramp in CY06
Piper Jaffray resumes coverage of Juniper (JNPR 24.60) with a Mkt Perform and $26 tgt; firm notes the stock trades at a premium multiple to the group, and they would like to see the better evidence of a successful enterprise strategy or cheaper valuation before they would get more aggressive.
Tähelepanu väärib finantssektori breakout
Suurimad esindajad on Citigroup Inc. (C) 10.40%,Bank of America Corp. (BAC) 7.69%, American International Group Inc. (AIG) 7.40% ja JPMorgan Chase & Co. (JPM) 5.70%. Lisanduvad ka viimase ajad magusamad palad nagu MER, GS, LEH.
Sama tähelepanu väärib ka biotehnoloogiasektori tõus (BBH).
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Tasulisel SmartMoney Selectil täna ja homme avatud uste päev. www.smartmoney.com
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Briefing kirjutab nii:
PIR Tech Breakout: Pier 1 Imports setting up for a potential bull flag (11.99 +0.13)
After testing its Oct lows (set on 10/12 at $9.95) the stock broke out of a 20 day trading range on heavy volume taking out its 50 day SMA at $11.52. This run was prompted by Oct sales that were not as bad as analysts expected - the co reported Oct sales decreased 10.4% vs the consensus of -14.6%. Since then the stock has pulled back on light volume for the past 4 sessions setting up a potential bull flag. If this pattern manifests a measured move advance would see this stock testing the $13 level. However, traders should be wary as the resistance at $12.20 is still intact. Near term support can be found at its 50 day SMA around $11.50. See attached chart. Note: PIR is due to report Nov sales and Q3 earnings on Dec 15th. Market Cap: $1.0 bln; float 85.8 mln; short interest 11.7 mln; p/e 68.7. -
Juhtusin minagi 10 pealt PIR-i võtma. 12 peal oli plaan pool kogust ära müüa ja võimalusel 10.50-11.00 juures paras ports veel juurde võtta, et 200 päeva keskmisele vastu põrutada. Aga võta näpust - müüa saan, aga osta mitte. Nüüd olen nö.pikaajaline investor ja pean tihti palvet, et kunagi rahagi kätte saaks.
