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Börsipäev 19. oktoober

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  • Rev Shark:

    Technically, We Could Get a Lift
    10/19/2005 9:02 AM EDT

    "There is no revenge so complete as forgiveness."

    -- Josh Billings

    Earnings from Motorola were solid, Yahoo!'s report wasn't bad, but Intel's earnings were a disappointment. The question now is to what degree Intel's report was anticipated and how quick the market will be to forgive weak revenue guidance. Intel has had a history of producing market turns with its report, and we are at a juncture where that could occur again.

    When considering how the market may react to earnings it is very important to take a hard look at the technical condition of the indices. The indices have fallen sharply then put together a dead cat/oversold bounce that stalled yesterday. Ideally we need a retest of recent lows. If that holds then we are in good shape to put in a bottom and attempt to work higher.

    The pullback yesterday didn't quite take us back to last week's low but we are close. A little further weakness today and we will be close but keep in mind that it is extremely important that we don't take out last week's low. If we do hold and then rally to take out the highs we saw on Monday, we have a very nice little bottom in place.

    The big question is how the market reacts to Intel's mediocre report. The stock has been acting poorly since its previous report and obviously there are quite a few folks who were expecting this news. If the stock can bounce today that bodes well for the broader market. Remember, the issue isn't the numbers but the level of expectations, and they certainly were low. We had the usual earnings cowboys buying the stock in front of the report, which drove it up a little, but now traders are going to consider it after they look at the numbers. I would not be at all surprised to see them buy Intel and bottom-fish the chip sector today.

    Aside from Intel, earnings are petty good and given the very gloomy atmosphere we have out there that bodes well for some sort of bounce. It is still premature to embrace this market but the pullback yesterday helped the technical picture a little by ending the dead cat bounce. There was little chance this market was going to continue straight up with that technical setup.

    We should see some good clues about where this market is headed as we watch Yahoo!, Intel and Motorola and tech stocks in general trade. But if we breach the 2025 area on the Nasdaq and/or 1168 on the S&P 500 all bets are off. You have to like the very negative sentiment but trying to use that as an accurate timing device is impossible.

    We have an ugly hurricane churning out there and that may affect the market mood as it approaches landfall later in the week. I have my fingers crossed that it will continue to move south and avoid us in the Sarasota-Tampa are but it looks like someone is going to be hit hard.

    We are starting off weak today, which is exactly what I wanted to see. There is a very good chance of a bounce and semiconductors will be the tell. Overseas markets are weak, oil up a bit and gold taking a hit.

    Position: No positions in stocks mentioned

    Gary B. Smith:

  • BofA upgrades Legg Mason (LM) to Neutral from Sell on valuation. Firm says while the co currently trades 15% above peers, they believes that the co's strong mgmt team, diversity across asset classes, styles and distribution, and best in class investment performance are likely to continue to driver superior organic growth characteristics and therefore warrant a premium multiple to peers.

    Goldman Sachs upgrades Novartis AG (NVS) to Outperform from In-Line, following Q3 results that were ahead of expectations, saying while they do not believe that this represents a sustainable level of profitability, they do believe it reflects margin momentum being realized due to ongoing productivity initiatives and think it will support strong operating performance in coming years.

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