Thursday November 20, 2008
Navivest

The stock market is trading in and out of positive territory in late AM trading after opening to the downside with losses in all the major indices. While it is a bit too early to determine whether we will end up the day to the upside, we are looking for stocks to rebound if not today, then tomorrow.

Traders should start positioning themselves now by taking long positions. A rally would be broad-based, but we would just place bets on the markets overall, by buying the major indices as represented by QQQQ, SPY and DIA, which is a bet on the Dow 30 stocks.

For those looking to buy the stocks that are showing strength in a weak market, Boeing (BA), Verizon (VZ) and Walmart (WMT) are all up over a dollar, with 3% plus gains.

Tags: Stocks

Tuesday November 18, 2008
Navivest

While we are still in a bear market and expect the stock market to be lower than it is now in the near future, we are entering oversold territory and at any point in the very near future absent of bad news, we should get another nice rebound in stocks.

With these rebounds, we see gains of as much as twenty percent in some stocks and that being the case, the aim is to also try and catch the next one.

We are looking for one sometime in the next week or too. Hopefully it does not happen in dribs and drabs.

Obviously, with the volatility in the markets, getting in too early could be a serious costly problem. So what we want to do is watch how stocks are trading and then jump in when conditions are right.

Of late, volume has been light most trading days. We want to watch for a day when we start seeing decent buying volume and an overwhelmingly positive advance decline line, that is more stocks up than down.

Also, lately, we have had an anomaly whereby crude oil and stocks move up together. In normal trading environments, rising oil prices was deemed bad for stocks and when that happened, it put pressure on equities.

Now that falling oil prices is seen as a reflection of an ailing global economy, when commodities prices do rise, it is a positive and it helps propel stocks higher. So another thing to look for would be rising commodity prices.

Once we see such a situation developing, its time to initiate long trades.

That being said, remember we are in a bear market! From a technical analysis standpoint, stocks have violated every bearish signal and are in a downward trend if we may state the obvious. Anyone going long needs to keep his in mind, and take profits as soon as you are blessed with them.

Tags: Trading Plan  Trading Idea

Monday November 17, 2008
Navivest

Friday was quite an interesting session. Almost right out of the gate, stocks trended downward and by 1PM, a quick analysis would have had traders thinking that a down day for the stock market was a foregone conclusion.

At that point, the Dow, which had opened at 8822.19 from Thursday’s 8835.25 close, was down to 8469.99.

Around 1:15 the Dow and stocks in general, started rebounding from just about the lows of the session and kept moving to the upside until about 3PM, hitting an intra-day high of 8923.18. Then things turned around again and we saw another down trend. At about 3:52 PM, just 8 minutes before the closing, things fell of a cliff and we ended the day down 337.94 on the Dow Jones Industrial Average. Nasdaq was down 5%.

Things could continue to be dicey today. On Friday, the EU officially confirmed that the fifteen nations making up the Euro zone have officially entered a recession. A recession is defined as two consecutive quarters of negative growth and the EU zone saw a 0.2% decline in both the second and third quarters.

Overnight, Monday in Japan, the Japanese Economy Minister Kaoru Yosano announced that his nation had entered into a recession.

So the news keeps getting worse and stocks will continue to reflect that.

With all the news that the global economy continues to worsen, commodity prices should continue to suffer and investors should look to short related stocks. This should be down with the understanding that we will continue to experience volatility that could send the major indices up 5-8% or even more in one day. So taking profits whenever they occur and shorting whenever we get a nice rally might be a wise course of action unless you are willing to short and hold and have the fortitude to withstand those intermittent blips.

Tags: Economy  Recession  Trading Plan
 

Thursday November 6, 2008
Navivest

With the drop in stocks today, the major stock market indices have lost about 10% of their value in just two days.

Today, the Dow fell 443.48 points (4.85%), Nasdaq fell 72.94 points (4.34%) and the S&P 500 fell 47.89 (5.03%).

The losses in the past two trading days in the Dow and the S&P 500 are the largest since October 1987. This erodes more than 50% of the gains that we realized since stocks rebounded from a five-year low that was hit 11 days ago on October 27.

Fueling the drop was news from retailers, which showed that retail sales in October was the worst in 39 years. Walmart was one of the few exceptions. It reported that its sales for October rose 2.4%. This bested even the company’s own internal forecasts. If fuel sales are factored in, sales rose 2.5%, when compared to October 2007.

The good news for traders, is that the big drop in stock sets us up for another near-term bounce, the disastrous unemployment rate numbers that we will be getting tomorrow notwithstanding.

The biggest point decliner in the Dow today was Chevron (CVX), which shed $4.77 (6.37%) to close at $70.11. This was a reflection in the big drop we saw in oil prices today, which continue to fall on concerns that a weakening global economy will lower demand. Crude oil for December delivery dropped $4.53 or 6.9%, to close at $60.77.

Disney lost $1.42 during regular trading to close at $22.81. The shares are further trending lower in after hours trading, after the company reported that its fourth quarter net income fell 13%. Partly to blame was losses attributed to the bankruptcy of Lehman Brothers.

The company is expecting things to worsen consumer spending slows. According to Robert Iger, Disney’s CEO, “Consumer confidence is the lowest we’ve seen in over three decades, and even the best product out there is feeling the effect,”

Tags: Disney Earnings  Economy

Thursday October 30, 2008
Navivest

Exxon Mobil (XOM), the world’s largest company by market capitalization, today reported that its Q3 2008 earnings excluding special items were a record $13.38 billion, up 42% from the same period last year.

The company reported revenues of $137.73 billion for the quarter, compared to revenues of $102.33 billion in the year ago period.

Net income was $14.83 billion, up 58% from Q3 2007. This translated into earnings per share of $2.89, up 52%, as opposed to the $9.41 billion in net income and $1.72 EPS in the third quarter of last year. On a diluted basis, EPS for Q3 2008 was $2.86 and $1.70 in Q3 2007.

According to the company, “Net income included an after-tax special gain of $1,620 million from the sale of a natural gas transportation business in Germany and an after-tax special charge of $170 million reflecting a provision for interest related to the Valdez punitive damages award.”

The company reported distributing a total of $10.1 billion in the third quarter to shareholders, by paying $2.1 billion in dividend payments and share purchases of $8.0 billion, which reduced the company’s shares outstanding by 2%.

Cash flow from operations was approximately $17.0 billion. This included asset sales of $2.6 billion.
Average number of shares outstanding on September 30th, was 5.16 billion.

Exxon Mobil’s (XOM) profit shattered its own previous record, once again earning the company the distinction of the company with the largest quarterly profit on a dollar for dollar basis.

However while much is made of the company’s profits, with some detractors trying to suggest that it is proof oil companies are gouging consumers, Exxon Mobil’s (XOM) profit margin is only 10%. For comparison purposes, Google on the other hand, has a profit margin of 24.4%.

Tags: Exxon Mobil  Exxon Profits

Tuesday October 28, 2008
Navivest

Stocks put in a phenomenal day today, with the Dow, Nasdaq and S&P 500 surging 10.88%, 9.53% and 10.79% respectively. This is the second biggest point gain day on record. To put it in perspective, we saw percentage gains in one day that Wall Street would be satisfied with on an annual basis. The Dow rose 889.35points, the Nasdaq, 143.57 points and the S&P 500, 91.59 points.

This was despite the fact that we got the Consumer Confidence report for October that showed a dismal consumer confidence reading of 38, a full 14 points below the forecast of 52.

The Federal Reserve is meeting today and tomorrow and on Wednesday afternoon, will announce their latest interest rate decision. Wall Street is expecting that we will get a rate cut and that probably played into the big rally that we got today.

The rally was as broad-based as they come, with just about every industry group seeing strength. Every stock in the Dow Jones Industrial Average, was up and only 6 stocks in the S&P 500 were down.

Some of the biggest point gainers in the Dow that helped propel the index to an 889 point gain, include Exxon (XOM) $74.86 +8.77, Walmart (WMT) $55.17 +5.50, United Technologies (UTX) $51.29 +6.11, IBM (IBM) $87.28 +7.62, Boeing (BA) $48.91 +6.55 and Chevron (CVX) $70.02 +8.31.

The biggest percentage gainer was badly beaten down Alcoa (AA), which climbed $1.74, for a 19.25% gain on the day. In addition to Alcoa (AA), there were 20 other stocks that climbed over 10% on the day.

Tags: Stock Market  Stocks  Stocks Rally

Monday October 27, 2008
Navivest

Stocks ended the day lower today in what was a very volatile session. Investors initially actually had something to be hopeful about, as stock futures indicated the stock market would open with a triple digit loss in the Dow but when the markets opened, the Dow lost just 3 points.

But from there, things went haywire as stocks traded in and out of positive territory, with the Dow trading in a slightly more than 200 point rage.

Even with that, stocks spent enough time in the green - probably catching some traders who figured we would probably end the day up, in a bear market trap - for traders to view the trading action as relatively bullish. At its best levels, the Dow was up 220 points.

Things got ugly in the last half hour of trading after Moody’s downgraded GM (GM) to junk status and in the last 10 minutes of trading, the Dow accelerated its decline, ending the day down 203.18 points, or 2.42%, to close at 8,175.77.

The Nasdaq lost 46.13 points or 2.97%, to close at 1,505.90, while the S&P 500 lost 27.85 points or 3.18%, to close at 848.92.

Tags: Stocks  Stock Market

Monday October 27, 2008
Navivest

The stock market looks set to open lower this morning, as another wave of sell-off around the world spreads to the U.S.

The Dow futures are indicating an over 160-point decline at the open on the Dow, while S&P 500 futures are indicating a 21 point decline in the S&P 500 index.

In Asian trading, Hong Kong’s Hang Seng index tumbled an amazing 12.7%, while Tokyo’s Nikkei declined 6.3%.

We are seeing the same in European markets, with London’s FTSE currently off roughly 4%, Paris CAC down 6.3% and the German DAX down over 3%

High volatility should be the order of the day today, as economic prospects put a damper in stocks, while the possibility of a rate cut from the Federal Reserve as well as possible further government intervention, provides some possible upward momentum.

The Federal Reserve will be holding a two-day meeting starting tomorrow and on Wednesday, will announce their interest rate decision. The market is betting on a rate cut, with some economists now forecasting a 75 basis point cut.

At 10:00 AM, we will be getting New Home Sales numbers for September that will probably show further worrisome declines. Last Friday, we got Existing Home Sales for September that showed a 5.5% increase over August, or an annual rate of 5.18 million units. This was the biggest gain in over five years. However, the rise was fueled by sales of foreclosed homes.

Oil is now at $62.31, down another $1.84 even after OPEC promised on Friday, to cut production by 1.5 million barrels.

Tags: Stocks  Stock Market

Friday October 24, 2008
Navivest

U.S stocks will open down dramatically lower at the open as a global sell off spreads to the U.S. Stock market.

Futures for all major indices, Dow, Nasdaq, S&P 500, are all trading limit down, meaning that we currently have reached the maximum level at which the exchanges will let the futures decline and a trade won’t occur below these levels.

The Dow is now indicating to open down about 550 points, the Nasdaq, 85 points and the S&P 500, 60 points. These represent roughly a five percent loss in the Nasdaq and 6 percent losses in the Dow and S&P 500.

There is also a very good chance that we will see even more selling pressure when the stock market opens. So it will be ugly.

Tags: Stock Market Crash  Limit Down  Stocks  Stock Market
 

Stocks posted among their best one day gain today, on word that the government is putting together a plan to buy stakes in some banks, as a way of help instilling confidence again into the banking system.

This follows a similar but more concentrated U.K. government plan to buy equity stakes to the tune of $37 billion, in Royal Bank of Scotland in which it will take a more than 50% stake, and Lloyds TSB and HBOS which are in the process of merging. The U.K government will take a 40% stake in the combined Lloyds TSB and HBOS. European Union central bankers also announced similar plans to inject capital into their banking systems.

The Dow Jones industrial average was up 936 points (11.08%) finishing the day at 936.42. This was the largest point gain ever for the Dow and the fourth largest percentage gain.

The Nasdaq was up 194.74 for 11.81%, closing at 1,844.25 and the S&P 500 closed at 1,003.35 or 11.58%, for a gain of 104.13. This was the largest point gain ever for the index, and the largest percentage gain since 1933.

Stocks were also up on news that Morgan Stanley (MS) closed its deal with Mitsubishi UFJ Financial (MTU), in which Mitsubishi (MTU) took a 21% stake in Morgan Stanley (MS). Wall Street was worried the deal might not go through, after Morgan Stanley’s stock fell over 60% since the deal was first announced on September 22nd, 2008.

Tags: Dow Jones  Nasdaq  S&P 500  Morgan Stanley