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Friday Morning, May 9th
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Ice Man Stocks
For a printable version of the Ice Man's picks, click here.
Breakouts:
CNX - 92
STR - 65
IBM - 125.20
GYMB - 46
Regular Trades:
FMC - 65.10
HMY - 12.50
SLW - 14
FWLT - 70.50
QSFT - 14 * Best Bet
OII - 70
ABH - 10.60
Depressed:
KALU - 62.90 G
SFY - 46.25 G
OMG - 45.60 G
Dollar Man:
SDTH - 9
JDO - 1.35
CDL - 1.60
ARUN - 6.90
GMO - 8.45
DNN - 7.80
DROOY - 8 = 8.40 G
PWAV - 3.50
AZK - 5.12
VGZ - 3.80
BLTI - 3
NGA - 6.60
ISPH - 3.40
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Ice Cold Commentators
Swing Man Market Recap:
Market Summary 5/8/08
Trading in the stock market was largely range-bound Thursday. The S&P 500 bounced between the unchanged mark and 1400, which has been a key level among technical traders, but still finished the session with decent gains. Seven of the ten economic sectors advanced, led by a 2.3% rise in materials. Financials — the most heavily weighted sector — saw the most selling interest with a drop of 1.2%.
After stalling out at/near their 200 day moving averages, the daily charts of the major indices are suggesting that lower prices are likely. Yesterday, we saw most of our major indexes break down out of their rising wedge patterns on the 60 minute charts. Considering yesterday’s selloff, the market did not respond with its usual bounce back that we’ve seen during this advance. Simply put, this market seems tired and with our daily oscillators (MACD, Stochastics, and RSI) pointing down more selling is likely over the near term. The daily charts became violently overbought so one should not be surprised by the recent selling. It will take some time for the daily oscillators to unwind and work there way back down to oversold territory. The last significant pullback we saw in this uptrend (early April) saw the SPX retrace approximately 80 points. Should this pullback be similar to this one, a reasonable target for the SPX would be 1340-1350 area. Again, as mentioned above, this will take some time to play out so please exude patience on the long side. At this time, it’s far too early to say for certain the entire uptrend has reached its pinnacle. Since the market has made higher lows and higher highs, we have to say the intermediate trend is pointing upward. Personally, I’m not looking for the market to completely break down at this time (sure it’s possible and we will certainly adjust if necessary). What I will be watching for once this pullback completes is the next rally – does it produce a lower high or another higher high. Should it fail to produce a higher high, then I would recommend becoming much more cautious and looking to get more aggressive on the short side.
For now, as explained above, we remain cautious over the near term on the market. The daily charts will need to work off their overbought readings and then will see how the major players react. Last night, I spent several hours looking over numerous sector charts and hundreds of individual stocks and I noticed many more long setups than short setups. Looking at that many charts is a pretty good means of determining strength/weakness of the market. With that said, we will always adjust to the message of the market and should things change dramatically we will react accordingly. The recent environment is much better for day trading than swing trading so please do not hesitate to lock in profits. Let’s continue to take things one day at a time and see what the market has in store.
Good Trading.
Swing Man Charts are HERE.
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CNBC Fast Money Review
1. UNCONTAINABLE CRUDE
The headline: Crude Rallies as High as $124.57 After Hours
Oil prices surged to a fourth straight record high on Thursday after slipping more than $1 in seesaw trading as growing demand for transport fuel in Europe and power demand in emerging economies supported oil futures on both sides of the Atlantic.
If you want to play oil look at the oil services sector, counsels Pete Najarian. Companies will continue to seek out resources. I like the OIH.
I’d play the integrated names, counters Guy Adami. COP is my favorite.
Play the USO exclaims Jeff Macke. I say it almost every day!
I wouldn’t put my money here, adds Karen Finerman. There are better trades.
2. AFTER HOURS ACTION: AIG
The headline: AIG loses $7.8 billion in 1Q on swap, investment charges
AIG says it swung to a $7.81 billion loss during the first quarter due to losses in credit swaps and mortgage-related operations.
The New York-based company lost $9.11 billion in its credit-default swaps portfolio, which promise to cover losses on $579 billion in bonds or other kinds of debt. Losses in its investment portfolio, which includes debt backed by troubled mortgages, totaled $6.09 billion. Despite the losses, the company raised its dividend.
I don’t know what to say, says Karen Finerman. I can only hope the dividend part is a typo.
3. A MATERIAL WORLD
The headline: Rumors Of Commodities' Demise Premature As Material ETF, XLB Approaches New High.
The global growth story is sending the materials names off to the races, says Pete Najarian. I like as well as BUCY.
Copper looks tremendous to me, adds Guy Adami. I think FCX is the play.
4. PICTURE WORTH A THOUSAND OPTIONS
The headline: Pete Seeing Bullish Options Activity In Eastman Kodak
EK hit a 52-week low on Thursday, explains Pete Najarian. Considering an unusually high volume of call options traded as well I think the stock could be ready to turn around.
5. GOLDEN ARCH'S
The headline: McDonald's Global Sales Jump 5% In April On Premium Menu Items, Promotions.
MCD the world's largest fast-food chain, said on Thursday that sales at restaurants open at least 13 months rose 5 percent globally in April, helped by strong sales in China, Australia and Russia.
Eventually, the strong dollar is going to keep a lid on this stock, says Jeff Macke due to the very international exposure that's driving their sales.
I like BKC better, adds Pete Najarian.
6. POPS AND DROPS
ABH popped 11%. I think it’s a classic relief rally, says Guy Adami.
MTW popped 5%. I think this stock is a buy, says Guy Adami.
TM dropped 4%. I would avoid it, says Guy Adami.
Airlines. Oil is killing the airlines, explains Pete Najarian.
HD dropped 2%. Buy the dip, counsels Jeff Macke.
KALU dropped 11%. I bought this dip, reveals Karen Finerman.
WMG dropped 2%. I don’t think anyone can save Warner Music, exclaims Jeff Macke.
HANS dropped 15%. Goldman cut the forecast, adds Pete Najarian.
7. YOUR FIRST MOVE FOR FRIDAY
Guy Adami likes CSCO as a buy.
Karen Finerman prefers getting long JPM.
Pete Najarian suggests picking up shares of NKE.
Jeff Macke thinks it time to take profits in ATVI.
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News and Events Digest
Last night we saw news out of the Financial Times reporting that Citigroup, Inc. (NYSE: C) was on tap looking to unload some $400 Billion. The plan is set for today's analyst meeting, although no press release has come from the company regarding what assets this will be and just where that will go. While a billion dollars just isn't what it used to be, four-hundred of them is still a massive number no matter how you cut it. The FT also noted that CEO Vikram Pandit will aim to cut the company's $60 Billion cost basis by some 20%.... Citigroup has initiated coverage on several of the solar stocks in new coverage this morning. There may be other stocks attached to this full report, but these are the three we have seen so far early this Friday morning our of Citi. Evergreen Solar Inc. (NASDAQ: ESLR) started as Sell; shares are trading down 4% at $8.55 in pre-market trading. First Solar, Inc. (NASDAQ: FSLR) started as Buy; shares trading up 2% at $282.00 pre-market. SunPower Corporation (NASDAQ: SPWR) started as Hold; shares indicated down almost 1% at $83.00 in pre-market trading. Jon C. Ogg May 9, 2008 Jon Ogg... These are ten of the impact analyst calls we are seeing this Friday morning: Abbott Labs (NYSE: ABT) started as Buy at UBS. Advanced Energy (NASDAQ: AEIS) Raised To Overweight By JP Morgan. American Superconductor (NASDAQ: AMSC) Cut to Hold from Buy at Jefferies. Cree (NASDAQ: CREE) started as Hold Lazard Capital. DRS Tech (NYSE: DRS) cut to Neutral at UBS; cut to market perform at FBR. FormFactor (NASDAQ: FORM) Raised To Overweight From Neutral By JP Morgan. FreightCar America (NASDAQ: RAIL) Raised to Buy from Hold at Jefferies. Novartis AG (NYSE: NVS) raised to Outperform at Bernstein. Penson Worldwide... The opinion of most oil analysts and economists is that OPEC will let prices go up and up. That may not be true Goldman Sachs has said oil could spike to $200 a barrel sometime in the next two years, but OPEC may decide that such a big move up could poison the world economy and its profits. Oil is now at $125 and still rising. The kings and princes in Saudi Arabia and Dubai are adding to their wealth at the rate of hundreds of billions of dollars a year. Their plan has been to hold demand and blame... China will begin to encourage companies within its borders to buy farmland abroad. The world's most populated country sees it as a way to lock in food supply. According to the FT "A proposal drafted by the Ministry of Agriculture would encourage domestic agricultural firms to make the offshore acquisitions, with the focus on South America and Africa." The countries where China makes its investments may not like the idea. They may need the yield from the land to make up for their own food shortages. But, money talks, and China will likely get its way, at least in part.... Venezuela president-for-life and psycho Hugo Chavez has been giving aid to rebels in neighboring Columbia. According to The Wall Street Journal "A cache of controversial computer files closely tying Venezuela's President Hugo Chávez to communist rebels seeking to topple Colombia's government appear to be authentic." The US may now have to decide if it wants to sanction Venezuela as a terrorist state and cut or curtail trade relationships. Mr. Chavez has already said he loathes the US. He views America as imperialist and only interested in Latin America for its rich trove of commodities like oil. If the US decides... There is nothing like having cash when no one else does. The few large sovereign funds have big bags of money and have used them to pick up assets in the US and UK, especially shares in big banks and brokerages which have been hit by subprime mortgage losses. Congressmen and regulators have tried to get the funds to promise that they will not invest to get "political" leverage. So far, that has not worked well. It never does when one party in a negotiation has no leverage. To make the point that big money from overseas will not be... Hank Greenberg, former chief of AIG (AIG), still walks the avenues of Wall St. at night, plotting how to get his old job back. He has been in a series of disputes with the company since he was asked to leave. Under Greenberg, the company did remarkably well for decades. AIG is a bit like Citigroup(C). Both were built by larger-than-life executives. At Citi that was Sandy Weill. He was also pushed out. The two men come from a time when the top tier of the financial industry was Citi, AIG, and Goldman Sachs (GS). AIG made money in the... The Boeing (BA) Dreamliner has been delayed so many times that it defies counting. The plane was to have been out already and delivered to some customers. It has been hit by three setbacks. Boeing management has blamed suppliers for getting out key components too late. It is a convenient excuse which misses the point that the people running Boeing were not paying any attention. The problems have gotten so bad that some airlines which were promised the plane have said they will insist on compensation for late deliveries. Boeing's stock has suffered accordingly. Boeing has now been handed another... According to Reuters, AIG (AIG) lost $7.8 billion in the last quarter and will have to raise money. Reuters reports that Google says it will have revenue enhancing products for YouTube soon. Reuters writes that the head of China's new sovereign fund see opportunty due to global financial turmoil. The Wall Street Journal says that the US may have to put trade sanctions on Venezuela, a huge oil producer, because of its ties to Columbian rebels. The Wall Street Journal says oil and food prices are being driven by fundamentals of supply and not speculation. The Wall Street Journal writes... Markets in Asia were mostly lower. The Nikkei fell 2.1% to 13,655. Sony (SNE) fell 3.1% to 4620. Toyota (TM) fell Toyota (TM) rose 1.3% to 2305. The Hang Seng fell 1.7% to 25,014. China Petroleum (SNP) fell 4.7% to 7.50. China Mobile (CHL) fell 1.5% to 129.20. The Shanghai Composite moved down 1.2% to 3,613. Data from Reuters Douglas A. McIntyre
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