The Dow and S&P are both up 6 straight weeks. The last time the Dow was up six straight weeks was in November and December of 2003 which was the early stage of the bull market. The Dow was up 8 straight weeks and the S&P was up 9 during that period. The last time the S&P was up 6 straight weeks was in August and September of 2004. The S&P went from a low of 1060 on August 13 to a high of 1131 on September 21 or a 7% gain. Over the next 5 weeks, the S&P went as low as 1090 on October 25 or a loss of 4%. That ofcourse was right before the Presidential elections and than we proceeded to rally all the way to years end.

The Carlyle Group is the latest private equity outfit seeking to raise $1 billion via an IPO of an investment fund. This follows in the footsteps of similar offerings by Apollo Management LP and Kohlberg Kravis Robert & Co. Add in the potential IPO of Blackstone Group and the recent Fortress Investment Group IPO and what you have is alot of opportunistic dealmakers trying to cash in on this liquidity bubble while it lasts.

Below is an interesting equity style box courtesy of Morningstar showing how showing how growth, value, blend, midcaps, small cap, large cap have played out over the last several years.

Recap

The markets did a 180 from yesterday with an orgy of buying and perhaps some short covering . Things couldn't look better though a little more volume would have helped. Then again its Friday. The spin is that the containment of inflation could lead to a Fed rate cut.

Almost every sector was green with huge gains in the metals with TIE up 9%+, heavy constuction had a ball with FWLT (9.13%) having a monstrous day. Transportation and retail lagged . High oil prices and poor retail sales having an effect no doubt.

This man sold most of his stocks and put money into big cap Dow names like Walmart because, he believes the Dow will go up over the next 25 years. I have news for him. Walmart won't exist in 25 years time. WMT has been around for 50+ years. I doubt it will be around in 25 years expecially in the rapidly evolving world we live in.

Biotech giant AMGN has taken a beating as of late with more bad news concerning its blockbuster anemia drug. Shares are down almost 20% in the last 8 trading sessions. I took a dip in this stock today at under $55. I actually had an accidental buy limit order which got filled. But I am not complaining. Some of my best investments have come of accidental orders that got filled. Like the time I bought Ebay last August at $23 .

Lets see what merger mania Monday brings us. What $500 trillion buyout will we see ? Will MSFT buy GOOG ? Will AAPL bid for MOT ? Will XOM buy COP ? Will Warren Buffett come in and leverage his $100 billion of cash 100-1 and buyout the Dow index ? Will Mexican billionaire Carlos Slim team up with British based Russian billionaire Roman Abramovich and buyout the S&P 500 ?

Than again, its all a casino till something or someone blows up.

UPDATE

Every stock I own is Green . Everything . Is this a good sign or should I be selling ? Thats the dilemma I am faced with. Its almost like yesterday never happened. We never got a big distribution day with heavy volume to boot. I'll be keeping an close eye on the last 2 hrs of trading. Specifically 2:15pm to 2:30pm and 3:30pm to 4pm. Those are the time slots the BIG boys come out to play.

Pre Market

Weakness in the Asian and European markets.

Stocks In Play

Earnings Announcements

Producer price index was up 0.7% in April which is inline with expectations. Excluding fuel and food it was unchanged.

Retail sales fell 0.2% in April versus a consensus of a 0.4% increase. Rising fuel costs are having their effect on consumers.

The Yen is set for its first weekly gain in 10 weeks. The last time the Yen was up was the week of the Feb 27 market plunge.The USD has also been gaining as of late.

Keep an eye on this one. This on demand video service looks very promising. When an IPO is in the works,I will be buying.

The pre market futures are suggesting a higher open. Will this be one to sell ?

Recap

A pretty ugly day in the market if you were long. Dow S&P, Nasdaq all down over 1% on heavy volume. Thats the key here volume. And the close was at the lows of the day. Could 'Sell in May' be the order of things. If I recall last year, we sold of a day or two after the FOMC announcement and the sell off continued till July. Added to the equity markets, gold and silver got killed today. Its starting to look like the precious metals may be topping out.

Pre Market

The Asian markets are fairly bullish and Shanghai is up yet again. Europe is down all across the board.

Stocks In Play

Earnings Announcements

ACOR AIRN BSQR CBOU CRYP ISIS MED MBLX NFI NVDA BRLC are some of the names I am keeping an eye on.

Viacom net falls 36% on restructuring.

TXU swings to Q1 loss due to plant shutdowns.

US trade deficit continues to expand as gap is largest since September.Imports rose greater than exports. You would think a cheap USD should help out our exporters.

Retailers posted weak April sales ostensibly due to a slowing housing market and rising gas prices. SAKS is still a growth story in retail with their turnaround.

US initial jobless claims are down. Could companies be firing fewer workers ?

The Bank of England raises its benchmark rate to a 6 yr high.

The Pre market futures are pointing to a lower open. The theme is buy the dip. It will probably work again today.

Recap

New highs on the Dow yet again with a 50+ point gain. This is almost unreal. I'm not complaining with my long positions going through the roof in SNDK MU COGT MMS, NYX JADE FFIV RVBD USD and so on. I do think this will end with a Chinese market crash. The Shanghai Composite crossed 4,000 today and I think maybe another 100-200 points to the upside followed by a collapse. Maybe another week or so. I like bull market like any investor or trader but, I also like to see healthy market with pullbacks of 2-3% every so often. Up 25 of 29 trading sessions on the Dow and yesterday hardly constituted a downday with a gap down open and spike lower, followed by a rally which almost put us in the green. We may still have a healthy pullback in the coming days but something tells me we are past the point of no return.

"Men, it has been well said, think in herds; it will be seen that they go
mad in herds, while they only recover their senses slowly, and one by one!"

Extraordinary Popular Delusions and the Madness of Crowds - Charles Mackay

FOMC announcement

No rate changes and the language is the same. Inflation is still a concern with the core being somewhat 'elevated'.

The market has been all over the place since the announcement, spiking down than up than flat and now up again. I suppose if everything is the same, the best course of action is to stick with whats been working and go long.

Pre Market

The markets in Asia are up and the Shanghai composite has crossed the 4,000 mark.
The European markets are mixed.

The FOMC announcement at 2:15pm ET is the main event in todays economic calendar.

Stocks In Play

Earnings Announcements

TFSM TOL WFMI TM TKC TK PEIX NWS LM ID JUPM FTO & BORL are some of the companies reporting ernings today.

Cisco reports a 34% jump in profit but shares decline as investors had already run this stock up in the days leading to earnings.

Rio Tinto shares rise on speculation of a buyout by BHP Billiton. A merger appears to make economic sense though whether it occurs is anyones guess.

Economists are dim about US economic growth prospect. Does not look like the market cares. With strong overseas growth should they care ?

The futures pre market suggest a lower open. Will it be another buy the dip type of day or will the Fed announcement cause a sell off ?

Market Recap

Well it looks like buy the dip has worked once again. The major indices climbed from deep in the red to being flat to up for the day.Bad news or good news, it does not matter. Just keep buying. Thats the message the market is sending.

More speculation as Countrywide stock climbs as much as 10% on rumors of a buyout.

Two charged with insider trading on the Dow Jones buyout offer. These two are just small fish in my opinion.

McDonalds sales rise 4.8% with strong growth in the Asia Pacific region.

CSCO earnings will be released after market close. All eyes will still be on the FOMC decision tomorrow.

Pre Market

The Asian markets are all red save China (and New Zealand) which is up almost 3%. Like I keep mentioning, the Chinese market is coming real close to topping out. I feel a week or two longer and a top will be made. How long can an index keep running up 4-5% a week ? The European markets are all red.

Stocks In Play

Earnings Announcements

Some earnings I will be keeping an eye on - CELL, CSCO, EXPE, FTK, PZZA, TAP, HET, NUAN, OMRI, PCLN, GOLD, STKL, VSE, TRLG and DIS.


US retailer April sales may have fallen for the first time in 4 years. I think higher gas prices are going to continue to pinch consumers pockets.

The USD continues to act strong this morning which may be a negative for equities.Same with the Japanese Yen.

Stock index futures are suggesting a weak open to the market. Will this weakness be another buying opportunity or will traders show caution ahead of tomorrows FOMC decision ?

Market Recap

The Dow ended up (yet again) along with the S&P 500. Nasdaq finished down and Midcap and the Russell 2000 were weak. Aluminium companies outperformed today as aluminium producer Alcoa made a bid for Alcan. Toys, gambling and internet were the big losers.

Speaking of gambling, LVS and WYNN both look like good buys here. Infact WYNN is soaring in after hours after beating profit expectations. Wynn and Venetian(LVS) are the two top hotels in Vegas. They make more money than anyone and I don't think one can go wrong betting on them. People don't just go to the Venetian or Wynn for the gambling but also for the food and entertainment and the shopping. With a drop in the US Dollar, Vegas has become cheaper for foreigners. I met a lot of Europeans on my recent trip and they were saying how cheap it was to come out to Vegas. With a weak USD Vegas is going to florish and I want to be long the two top dogs - WYNN and LVS. At $80 a pop, LVS in particular looks to be a steal and the company is going to florish once its Singapore casino is in full swing.

Why I am Shorting Amazon

Amazon shares have run up 40% since April 24. A move from below $45 to above $63. Earnings were much better than expected but, I hardly believe great earnings alone were responsible for this runup. Short interest of 16% and rising as of early April played a major role in my opinion. As the stock price soared, more shorts came in and eventually covered at higher prices which boosted the stock. As far as valuation, AMZN is trading at over 60 times 2007 earnings which is a little too expensive for my liking, especially for a company with at best 25% year over year growth over the next 3 years. If we look at stock price as a pendulum which swings wildly over fair market value, than I would think AMZN has swung a little too wildly to the north of its fair market value. AMZN was trading at $27 last August and the share price has more than doubled in less than 9 months. Famed investor Bill Miller of Legg Mason was advocating this stock when it was trading below $30 but, I believe he will be a seller at these prices and considering his fund own close to 5% of the company, any sales on his part will have a negative impact on the stock price. I think AMZN will see a share price of $50 in the coming weeks and I think a short position here is a fairly safe bet.

Pre market

The Chinese market remains closed. The rest of Asia is fairly bullish with big gains in Japan. The European indices are mixed.

EARNINGS CALENDAR

NILE, CIB, BBD, MCK, FLR, HANS, WYNN, JCOM, KGC, OSIS and SONS are some of the earnings I will be keeping an eye out for.

Buffett is looking for a $40 to $60 billion acquisition though he would first need to find something attractive to buy. I suppose we will today see a speculative jump in the stock price of all companies trading in the $40-60 billion market capitalization range.

Insider trading concerns are begining to surface with the surge in option activity prior to the announcement of mergers and buyouts. I think it would be hard to find any deal where there is absolutely no insider trading. Look at the case of Armor Holdings that rose sharply on Friday ostensibly due to an analyst upgrade. AH started the week at $70 and closed over $82.This morning the news is that Armor has gotten a buyout offer for $88 a share. No insider trading ?

The Week Ahead

Here is an economic calendar for the week ahead. All eyes will be on the Fed meeting and subsequent announcement concerning interest rates. International trade, producer price index and retail sales will also be the big economic data to keep a lookout for. This market rally began with the Fed announcement in late March. Could this announcement reverse the market especially if the Fed makes it clear that rate cuts will not be forthcoming ?

I will be keeping an eye on the Shanghai Composite to see how it reacts after being closed for almost a whole week. I still believe that a reversal in the current market trend will start in China. In addition, I will be closely watching the US Dollar and the Japanese Yen for any change in trend. If the USD rallies, the markets could reverse course. The same is true of a Yen rally. So far the correlation has been strong between a declining USD and Yen and a rising equity market.
I expect traders will be more circumspect in the trading days ahead due to the important Fed announcement.

Hiatus

I'm back from my hiatus. I went 'missing' in Las Vegas of all places. Every so often I need to get away. I figured the market does not usually do anything unexpected during the first week of May and it was a safe time to be AWOL. It seems nothing much has changed. More takeovers more speculation and even more rumors. Microsoft buying out Yahoo ? Seriously where do people pull this nonsense from. I can safely say we are in the last few weeks of this 2002 bull market based on all the ridiculous news flying around.

ISM and Housing

Manufacturing grew at a higher than expected pace with an ISM number above consensus. While orders are up and inventories down, a high ISM number is less likely to cause a cut in rates. If the bulls are looking for a rate cut, this number will not be to their liking. On the other hand this number indicates that we are not in approaching a recession as the bears would like us to believe. Nonetheless, I expect a pullback in the markets and yesterdays decline indicates a short term change int trend. Perhaps we will get a good buying opportunity later this week or early next.

Sales of existing homes fell to their lowest level in four years. Thereare those that continue calling a bottom in housing. I highly doubt any bottom will occur in housing till late 2008 at the very least. Inventory across the nation is at record highs and builders continue churning out new homes.With an increasing supply and decreasing demand caused in part by stricter lending standards, it will be a long time before supply and demand are in balance. The way things stand, supply keeps increasing with new builds and foreclosures among others while demand keeps falling as lending standards tighten up.

Pre market

Most markets in Asia were closed including China and India are closed for May Day. Japan ended down. The European markets are closed as well apart from London which is trading down.

EARNINGS CALENDAR

Proctor and Gamble reported stronger than expected sales and earnings. The shares are however trading odwn in pre market.

Liz Claiborne share price is being ripped to pieces as earnings fall sharply . LIZ investors are not too Lucky(Brand) as earnings are not Juicy(Couture)enough ?

Archer Daniels reports profit below analyst expectations as grain costs rose sharply. Share price is down.

I expect continues weakness in the market today. We need to get a test of 13,000 or even less before the uptrend continues.

Market Recap

A weak end to the month of April. I suppose traderr were trying to get a jump start on the 'Sell in May' theory.

Todays Biggest Winners

• Nondurable household goods
• Household Goods
• Electronic office equipement
• Personal Products
• Computer Service

Todays Biggest losers

• Hotels
• Tires
• Trucking
• Forestry
• Metals

Circuit city is getting a haircut to the tune of 10% in after hours after warning on sales and potential losses.

The Shanghai composite has another 10-15% of upside before it falls apart according to some studies I have looked at. I expect global markets to go the way of Shanghai. Possibly sometime in late May after the Memorial Day weekend.

Two stocks I want to own in May are KO and MAT. Coca Cola and Mattel tend to outperform in May a good 90% of times.

Pre market

Lots of weakness across the Asian markets though the Shanghai Composite is making new highs. The European indices are fairly bullish thus far.

Personal spending rose less than forecast.

EARNINGS CALENDAR

Verizon net drops though sales surpass analyst expectations.

Pitney Bowes reports lower profits on sluggish growth.

Semiconductor sales were up in March signaling perhaps the bottom in chips is here.

Pre Market futures indicate a flat open. Perhaps we will get a pullback today ? The market definately needs a breather with the 3 major indices in overbought territory.

UPDATE

The markets are up again heading into the final hour of trading. Why am I not surprised ? It appears nothing can stand in the way of a bull or maybe I should say liquidity. Gold is flying through the roof along with the Euro. I'm not complaining. If the Fed wants to drive the dollar down to zero then they can be my guest. I'll keep picking up more gold and silver and foreign currency. Maybe some real estate too.

BTW- My long in BIDU AND NTRI are helping my portfolio outperform the overall market. I wish I could say the same for SNDK , but I think a bottom is here and SNDK offers a great entry point.




Just another day in the office for me.....

Pre Market

Weakness in the Asian markets and all across Europe. I suspect a pullback in the US markets is near.

GDP number came in weaker than expected showing 1.3% Q1 growth vs a consensus range of 1.4-2.7%.I would think the market reacts positively to this news because slowing growth means a rate cut is around the corner.

The US dollar has set an all time low against the Euro. Funny how the Dollar drops 40% over the last few years and the US markets are up 40%. Also note the Yen has spiked in the last few minutes with the GDP release.

Gold is starting to move back up after the pullback the last few days.

EARNINGS CALENDAR

Burger King beats analyst expectations as everyone hails the King.

Exxon continues it record profit spree as high oil prices continue to boost earnings.



Pre Market Futures are indicating a weak open. I expect some sort of pullback today. The recent runup has been ridiculous and we need a nice 2-3% decline for the sake of sanity.

RECAP

Up most of the day but a weak close. Maybe a pullback is in hand. The S&P was actually down on the day. The all important GDP number are out tomorrow. I suspect there will be some profit taking ahead of the weekend. Who knows what could happen between now and Monday.

The chips and homebuilders were leading today while the miners and airlines lagged.

I think a lot of people are in disbelief at the strength of this market and the fact the Dow has been up 18 of 20 days which is beyond belief.I think we will finally get a pullback starting tomorrow and into next week. Then again, if everyone is waiting for a pullback it usually does not occur.

Interesting videos with Economic Hit man John Perkins.

1999

This is looking like 1999 all over again. Amazon is putting some hedge funds out of business. Over $60 currently. Wow. Watch BIDU run in anticipation of its earnings.

Pre Market

The markets in Asia and Europe are all up. US market futures are sharply higher indicating a strong open.

EARNINGS CALENDAR

The nations largest mortgage company Countrywide reports sharply lower profits as losses in subprime take its toll.

NYSE groups profit doubles though the numbers missed analysts expectations.

Delta emerges from bankruptcy 2 years and 6,000 job cuts later.

Gold prices are heading sharply lower this morning which makes me think this is a great buying opportunity.

Market Recap

The Dow blasted through 13,000 and the rest of the indices followed. While I would still expect a pullback on the Dow to test support at 12,800, I would not count on it given the strength in recent days. Even the slightest dip seems to be a great buying opportunity.

Precious metals led the way today while the brewers were the big laggards.They are probably taking the passing away of Comrade Boris pretty hard.

Apple blew away earning expectations after hours and the stock is soaring. Look for more strength in the Nasdaq and Qs tomorrow.

Akamai is tumbling after earnings failed to impress. The numbers were accidently slipped an hour before the close via an 8-K filing and an astute trader could have profitted handsomely.

Qualcomm Q2 profit rose 22%.The stock is flat in after hours trading.

Nutrisystem delivered blow out earnings and very impressive guidance causing a big pop in the stock price of the diet food maker. I remember buying this stock at $4.60 and selling it soon after. 1500% later I wonder what I was thinking. "Weight loss food is just a fad !"

Crude oil prices rise after inventory shortages are reported. These shortages will likely become surpluses in the not too distant future as always causing oil prices to decline. I think short oil here is a pretty safe bet considering we are in the high end of the $50-$65 range.

Interesting read

A good article I read today.

Too much like 1929

"The two major players in the world financial system at that time were the United
States and Great Britain. The United States was the emerging industrial power,
whereas Great Britain was the mature and stagnating industrial power. The
central bank of the emerging industrial power (the US) printed money in an
effort to prop up the economy of the mature industrial power (Great Britain).
The inflation of the money supply resulted in the overheating of the economy and
the stock market of the emerging industrial power. It was the crash in the stock
market of the emerging industrial power (the US) that brought about the crash in
all the world’s stock markets and the Great Depression followed later.

Now fast forward to today, and what you see is China as the emerging industrial
power and the United States as the mature and stagnating industrial power. China
is printing money in an effort to prop up the economy of the mature industrial
power (the US). The inflation of the money supply is resulting in the
overheating of the Chinese economy and stock market. Very interestingly, on
February 27, 2007, it was the sharp 9% one-day drop in the Chinese stock market
that led to the sharp drop in stock markets worldwide, including the US. People
may be conditioned to think that economic events in developing countries pale in
significance to economic events in the US, and may fail to see how what happens
“way over there” in China would have any significant impact on their economic
well-being. But how different the truth really is. I think most people even now
after the February 27th turn of events, fail to grasp why the US stock market
sold off so sharply after the Chinese stock market sell off occurred first. The
idea that a foreign stock market could dictate what happens in the US stock
market almost offends the American sense of national pride (so the event is
casually dismissed as “market irrationality”). A word of advice: you better get
used to it, as there is much more of that to come. The crash is coming."

Pre market

Weakness in Asia though the Shanghai Composite continues its march towards 4000.The European markets are strong and the US markets are expected to show strength today.

Orders for durable goods were up 3.4% in March signaling a recovery in business spending.

EARNINGS CALENDAR

Akamai, Apple, LSI , LifeCell, NutriSystem and Rambus are some of the earnings that I will be paying attention to.

Pepsi Q1 profit increases 16% on strength in international sales.

Boeing Q1 profit was up 27% with strong demand in its commercial airplanes and defense divisions.

I want to be long semiconductors via the ETF USD.

Market Recap

Close but no cigar. The Dow almost got to 13,000 just 10 points away at one stage but it wasn't to be. The Qs are breaking out and I want to be long QLD here, to take maximum advantage of the upside. Semis had a great day and I did well being long SNDK and MU.

Honeywell and IBM helped prop the Dow up today despite 16 of 30 components being in the red.

Household goods led the way while steel was the worst performing sector in part due to US Steels poor earnings.

Amazon doubled its profit and its shares are soaring in after hours.Still with such high multiples, I would want to go short AMZN once the momentum dies down.Its the 15% short interest thats helping this stock soar.

Whirlpools net fell but the stock soared due to numbers not being as bad as analysts feared. Lesson: Buy stocks of companies that are expected to disappoint.

$10 air fares coming to a place near you. New budget carrier plans to make money selling advertising. Hmmmmm not a bad idea. They could be on to something.

Home sales drop along with consumer confidence. And they were saying the housing market is bottoming. How do they come up with such BS analysis ?

Pre Market

The markets across Asia are mixed while the European indices are all red.

Toyota is now officially the worlds No. 1 auto seller surpassing GM.

Earnings calendar

Military contractor Lockheeds Q1 profit was up 17% due to sale of land holdings and tax benefits.Is Lockheed now in the real estate business ?

Chemical maker DuPonts Q1 profit climbed 16% with higher seed sales and pharmaceutical income.

Alcatel-Lucent reports a Q1 operating loss due to falling sales in its wireless and network divisions.Shres are up 5% in premarket.

Alot of earnings to look forward to today. I am keeping an eye on Amazon, Ameriprise, US Steel ,Pepsi, SunMicro, and Travelzoo among others.

Carl Icahn is unloading his Stratosphere casino and 3 others to Goldman Sachs real estate funds for $1.3B. How appropriate for Goldman to get into the casino buiness since they are already well established in the biggest casino of all (Wallstreet).

Will the Dow finally cross 13,000 today ? The futures are strong pre market indicating we will get close.

Market Recap

The major indices fell for the day which was a surprise considering the Dow had been up 7 straight days. I expect any pullback to be a buying opportunity. The market wants to go up and up.

There was a belief that rising oil prices resulted in todays pullback. What a load of crap. If a rise in oil leads to a fall in the markets, the indices should be down 70% over the last few years considering the run up in oil prices.

Coal was the best performing industry while the airlines were the worst( higher oil prices).

Texas Instruments bullish forecast for the chip sector has its shares up over 9% in after hours. TXN sells chips to Motorola. So a bullish outlook by TXN is good for MOT. I want to be long MOT and I also want to be long Netgear since wireless keeps gaining ground and NTGR provides wireless routers and more.

Amgen Q1 profit rises and the shares are up in after hours . Amgen was hovering around $55 a few weeks back and is now at $62+. Worst of all, I had a limit order @ $55 and AMGNs low was $55.13. I could feel AMGN was at a bottom but I felt a bottom would come below $55 and I was wrong. Oh well. The whole Biotech sector is on fire. I think I would want to be long CELG, GILD, DNA and GENZ among others. If you can't beat 'em, join 'em.

Comrade Boris died today. I would short Diageo DEO, the distributor of premium alcohol brands considering Yeltsin was likely their biggest consumer. He was constantly drunk and I reckon he always carried a flask hidden in the inside pocket of his jacket.

Pre Market

The markets in Asia are bullish this morning while the European markets are mixed.

EARNINGS CALENDAR

Hasbro profit beats estimates on strong demand for Spider Man Toys. Hasbro's 5 year deal with Marvel to sell toys based on Marvels
characters is really paying off.I believe Hasbro will continue enjoying strong profit growth in the coming years.

L-3 profit increases 17% with strong demand for government services and aircraft modernization among others.

Amgen, Boston Scientific and Texas Instruments are among some of the big companies announcing earnings today.

Barclays is acquiring ABN Amro for $91.16B in the largest bank takeover ever.In the process, ABN is selling it US subsidiary LaSalle Bank to Bank of America for $21B.

AstraZeneca is acquiring MedImmune for $15.2B, a 21% premium.People who bought into this company in Mid March are making close to a 100%" return in a month. Thats 1,200% annualized. I guess piggybacking on a Carl Icahn company is a profitable strategy.

PAIR TRADES

I was thinking of a few pair trade ideas. First one on my mind is Blockbuster and Netflix. I would want to go long Blockbuster and short Netflix. I know Blockbuster has been eating Netflix lunch the last few quarters and that should continue until Netflix makes some change to its business model such as acquiring Movie Gallery.
Pair Trade #1 - Long BBI $6.21 , Short NFLX 22.10

I am looking at a one year chart of General Motors versus Toyota and it looks like GM has outperformed by quite a bit. GM is up around 50% while TM is virtually unchanged. I do not expect this to continue. I would like to be long TM and short GM. Infact if one wants to make it more interesting, they can bring Ford in the mix to and short it. Long TM and short GM and F.
Pair Trade #2 - Long TM $125.93 , Short GM $31.68 (Short F $7.75).

Hewlett-Packard has done remarkebly well over the last year while Dell has been beaten up. With Michael Dell back at the helm I expect things to change. I would like to be long DELL and short HPQ here. With HPQ up over 100% in 2 years and Dell down 30% I expect things to change.
Pair Trade #3 - Long DELL $24.99 , Short HPQ $41.37

RECAP

The Dow is up 15 of the last 16 trading sessions and over 700 points in the process. This run reminds me of the November/December 2004 run when we did 800 points in 3 weeks. The S&P 500 and the Nasdaq were on fire too.

The Phlx housing sector index lead the way with big gains in the homebuilders.

The rise in oil prices meant the airline sector underperformed.

Gold is on the rise and is closing in on $700. Yesterdays dip was a great buy opportunity.

Speaking of dips, I would be long the markets if I could get in on a dip. The recent rise is looking too parabolic for my liking. Until I see some sanity, I'm staying on the sidelines though I continue to hold long positions.

Pre Market

The Asian markets are a complete opposite of yesterday while Europe is very strong too.

Earnings Calendar

Google Q1 profit climbs 69% beating analyst expectations.

McDonald's Q1 profit climbs boosted by surging sales in Europe.

Pfizer Q1 profit declines with lower than expected sales of diabetes drug and one time charges.

Schlumberger profit jumps 63% on strong international demand.

Caterpillar profit beats expectations with international demand once again playing a powerful part.

It appears a lot of these multinationals do not have to worry about a US recession as long as international demand stays strong. Thats where most of the money is being made these days. With high growth in places like China and India with a combined population of nearly 3 billion, there is a lot of growth to be had.

Gold prices are taking off this morning after a pullback yesterday.

The US market futures are pointing to a strong open. I would not be surprised to see 13,000 on the Dow today.

UPDATE

The market continues to baffle me. After overnight weakness across Asia and Europe I was expecting a 50-100 point downday. We still have 2 hours to go but I highly doubt we will see a selloff of high magnitude. Currently around 19 of the Dow components are higher which means this rally is not all that broad based. Midcaps and Small Caps are lagging and the PHLX gold/silver index is getting hammered. Only 8 of my 22 long positions are actually up on the day and most of them barely.

Looks to me like there is rotation going on into the large cap less volatile stocks. I figure even with a recession these large caps will not drop by much considering they are multinationals with a big portion of earnings coming from overseas. Being long the big cap Dow names is probably the safest bet out there. I think the only Dow component I would stay away from is GM. The rest all look like buys.


UPDATE In between the start and finish of my post, the Dow lost 25 points. Maybe the market is sane afterall though I would not get my hopes up.

Pre Market

The indices across Asia are heavily in the red with a 4.5% drop in Shanghai and large drops in Singapore and Hong Kong too. Europe is not any better and I expect this downside momentum to carry on into the US market. Remember, it was a 8% drop in China that started our 400 point drop on Feb. 27.

Jobless claims drop though not as much as forecast.

Leading indicators and Philly Fed survey are two important pieces of economic data out later today.

China's economy continues to surge as an 11.1% Q1 growth rate fuels fears of further rate hikes and thus the 4.5% drop in the Shanghai composite .

US foreclosures up 47% in March on worsening housing conditions in California and MidWest.

Earnings Calendar

Merrill profit jumps 31% on investment banking and trading revenue.

Altria profit falls 21% but raises guidance for rest of the year.

Gilead profit surges 55% on growth in sales of HIV treatment.


The futures are showing a very weak market open. I expect overall market weakness today on profit taking and as a reaction to overnight action in Asia and Europe. QID, DXD, SDS, MZZ, TWM all look good today.

Recap

The Dow surges to all time highs. The DJIA is up 13 of the last 14 sessions which is incredible. Volume was stronger than usual today though there was plenty of selling in the last hour. I would like to see a low volume pullback to about 12600 before I decide to enter long.

The subprime bailout is here courtesy of Freddie and Wamu.

Ebay profit surges.I think Ebay is still a growth story and will outperform in the years ahead.

Vonage on the verge of bankruptcy. This has to be the worst IPO ever.

Blockbuster is beating up on Netflix. The advantage of being able to return movies to the store and rent new ones is clearly paying of. I think Netflix needs to buy MovieGallery Inc., the parent company of Hollywood Video. NFLX has $400 million of cash on its balance sheet and MOVI has a market cap of $130 mil and around $1 billion of debt.

UPDATE

Looks like the Dow is making new highs once again. The Nasdaq and the small caps are lagging. There appears to be distribution on the SPY and DIA .

I am kind of annoyed that I missed the last 200 point of the Dow rally. I participated in the entire 12,000 to 12,600 move upwards. I did not expect us to be at all time highs on the Dow so soon after the February 27 plunge. However my long positions continue to outperform the market which is some consolation. I am at a stage where I do not see the benefit of being long since May is around the corner and the markets generally underperform May through September. In my view the current market rally is not broad based. A few big cap names like JPM, Caterpillar and Boeing are are responsible for todays gain in the Dow . The move up last Friday was entirely attributable to Merck. In other words one stock was responsible for a 60 point move on the Dow.

Pre Market

The Asian indices are mostly green while Europe is almost completely red.

EARNINGS CALENDAR

Motorola posts Q1 loss and first sales decline in 4 years.

JP Morgan posts record profit due to M&A and underwriting activity.

Yahoo share price plunges as Q1 earnings lower than expected.

IBM posts higher earnings that are inline with analyst expectations.

Massive Blackberry failure across Western hemisphere leads to drop in Research in Motion stock price.

Fannie Mae and Freddie Mac creating new loan programs to save subprime customers. What next ? 100 yr fixed mortgages .

Oil prices decline below $63 as crude supply builds.

The futures are indicating a lower open for the major indices. While today seems an appropriate day for some profit taking ahead of tomorrows important economic data releases, I would not rule out another rally which takes us to record highs on the Dow considering we are only 20 points away.

Pre Market

Mixed markets across Asia and a lot of red arrows in Europe.

The US Dollar continues to show weakness.As the USD falls, peoples purchasing power declines leading to higher inflation.So how can inflation be under control if the USD keeps heading downhill ?

Inflation concern eases as core prices rise less than forecast despite a surge in CPI due to higher gas prices. Apart from housing, food and gas are most peoples biggest expenses and if we are excluding this from the 'core' whats the use of measuring inflation ?

March housing starts show unexpected increase for 2nd straight month.I hope people take this as a sign of a housing market bottom and start bidding up homebuilder stocks. That way I can put on some low risk shorts.

Recap

The major indices finished sharply higher with the S&P 500 at six year highs.

Foreclosures in the US double from last year. Home builder confidence at lowest level.

Google purchase of Doubleclick boosts online ad companies share prices.

Some long awaited good news for Boston Scientific as FDA lifts restrictions on heart devices. BSX is an excellent buy at these prices.

Fremont shares up sharply as mortgage lender agrees to sell $2.9 billion of its subprime loans in a company saving move.


7 things i'm thinking

1. Where is the market volume ? Is it summer already ?
2. Economic data has no effect on the market. Why bother releasing it.
3. If the market is at all time highs, how can a slowdown in earnings be priced in ?
4. I think the Shanghai Composite will make to 4000 before the end of the month. Sick.
5. The plethora of private equity buyouts is a result of cheap money; not because of attractive valuations.
6. With the falling USD, sooner or later this is bound to have a negative effect on equities.
7. If the Fed continues to pump equities, gold is of to $800 or more.

UPDATE

The indices are up big today and the Dow is now up 11 of the last 12 sessions which is a phenomenal streak.

Gold has been gaining strength in the last hour or so of trading. $700 is not far off.

The financial sector has been leading the way today with Goldman Sachs having a particularly good day breaking through key resistance at $208.

The last 2 hours of trading will be key as always.

Pre Market

Strong markets across Asia with very big moves in China and India. The European indices are very bullish too. This global bullishness is expected to continue into the US markets.

Retail sales were higher in March indicating consumer spending is still strong.

Citigroup Q1 earnings decline but beats estimates.

In light of the strength in overseas markets, I expect the US markets too have a moderately bullish day ahead of tomorrows CPI numbers. Financials which have been trailing in recent weeks, look exceptionally strong today with the big Wall Street banks all up in pre market trading.

Market Recap

A strong day in the market with the major indices closing in the green.

The railroads did really well today in part due to Warren Buffett's decision to buy an 11% stake in Burlington Northern Santa Fe. Call it the 'Buffett' affect. Did he not rally the oil sector last year with his stake in Conoco Phillips ?

The banking sector continues to underperform due in part to the subprime crisis. A strong broad based rally without the participation of the banks is not a bullish sign.

The tire industry group has been up over 50% year to date. Who would have thought ?

The home builders are down nearly 20%. I would have thought it would have been worse.Its just that the builders are so heavily shorted that the slightest news rallies them.

Evidence is mounting that consumer spending is slowing. Hey, just hand them out some
0% interest, no payment for 1 yr credit cards and that will take care of the issue.

Pre Market

Mixed markets across Asia and a sea of red in Europe.

The Shanghai Composite keeps making new highs and is up over 30% since that February 27 'crash'.

Here is a word we will be hearing a lot of over the coming weeks and months;
stag·fla·tion /stægˈfleɪʃən/ Pronunciation[stag-fley-shuhn]
–noun an inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity.
--------------------------------------------------------------------------------
[Origin: 1965–70; b. stagnation and inflation]


US import prices rise 1.7%, more than twice the amount forecast. More inflation worries.

Initial jobless claims rose the most in 2 months. I'm not surprised here. A lot of big companies are laying off employees.

Walmart warns of 'challenging' 1st quarter. If you look at a growth curve, I believe Walmart
is in the 'decay' or decline stage.

Nestle to buy Gerber from Novartis for $5.5 billion in US expansion effort. Not a bad price to pay for 79% of the US baby food market.

The National Association of Realtors see home prices falling in 2007. I'm shocked.' Home prices never decline !' Thats what my Realtor told me.

The futures are pointing to a lower market open. Where the markets go today is anybody's guess.

Market Recap

The indices were all deep in the red. No surprise considering the Dow has been up 8 straight days. Volume was also back in the market today after last weeks lacklusture showing. The market rises the last several sessions on low volume and sells off on high volume. Hmmmmm. Could we be already be in a bear market ?

Research in Motion increases profit 10 fold and stock is off 5% in after hours. Ah, the disappointment of just meeting earning expectations.


UPDATE I hear Willa Ford is going to play Anna Nicole Smith in a movie about her life and death. I think Willa is way too hot to play Anna. You be the judge.

UPDATE

The market is tanking. The Fed minutes show additional rate increases may be necessary.

Pre Market

The Asian markets are mixed while Europe is in rally mode.

The EIA Petroleum Status report and the FOMC minutes are the two big items to watch out for in todays economic calendar.

Alcoa Q1 profit up 9% due to increased demand from China and the aerospace industry.

The US Dollar is making a rebound after hitting 2 year lows against the Euro on reduced speculation of rate cuts. This does not augur wellf or the bulls.

The big investment banks of Wall Street profit while the small investor gets screwed in the subprime debacle. One needs to be more careful about what they are investing in. Investment banks will try to pimp any crap to the individual investor.

The news keeps getting better for Yahoo as Viacom chooses it as its in-site search engine. Yahoo's stock price is up nearly 40% over the last 6 months.

The Dow has been up 8 days in a row, something which has not happened in 5 years. The previous time it was up 8 days in a row, it fell 3.6% the following day.

In other news, my fund did well yesterday on our correct bet on the identity of Anna Nicole Smiths daughter. This uncorrelated position of mine was a good bet since it was completely unrelated to any market anywhere.

Pre Market

The markets are mixed across Asia. The European indices are mainly in the green.

China's expanding trading surplus. I'm guessing a big portion comes at the expense of the US.

100 million iPods sold . Will the iPod go the way of the Walkman as more consumers choose cell phones with music and video access ?

Dow Chemical denies buyout rumors. Who are we supposed to believe ?

Buffett buying the railroads, acquires 10% stake in Burlington Northern Santa Fe.

Major stakeholders oust CFO of video game maker TakeTwo Interactive.

Citigroup trimming down, with plans to cut 15,000 to 45,000 jobs.

Staying true to CEOs statement that 2007 will 'suck', DR Horton announced Q2 orders fell 37%.

A flat open is expected in the US markets. Alcoa reports after the bell, kicking off earnings season.

Interesting

Here is a video of those 15 British 'captives' being 'tortured' and put under 'physical duress' by those evil Iranians.



2 weeks of chess and ping pong and endless meals of Persian food. Man thats some hardcore torture. I wonder what the Geneva Covention has to say about that ?

Market Recap

The markets ended flat amid some wild swings . Job growth is strong and the Fed will not be cutting rates anytime soon. So I guess the bulls have less reason to celebrate.

Crude oil continues its tumble. When are prices at the pump going to fall ? Thats what I want to know.

AMD sales decline not as bad as expected. The stock was almost priced for bankruptcy last week.

US files piracy charges against China at WTO. The Chinese are probably thinking something along the lines of " We lend you money so you can buy our pirated versions of your hollywood movies and software products ! "

Did you know Larry Kudlow was addicted to drugs and alcohol ? Listening to him on CNBC has me thinking he needs to go back to rehab.



The IRS apprehended my algorithm programmer to gain access to confidential information about my investment activities. After they threatened and subjected him to physical abuse he came clean about me.

Pre Market

The markets are strong across Asia and Europe.

The strong job numbers is likely to have a positive effect on the market.

Future traders are betting on continued strength in the Euro.

Utility company Mirant is putting itself up for sale. The utility sector has been a strong performer over the last several months with the TXU buyout and all.

Dow Chemical is on the buyout block too. KKR and a group of Middle Eastern investors the potential acquirers here.

Pre market, the futures are indicating a strong start to the trading day.

RECAP

The major indices closed higher on very light volume. The markets are closed tomorrow and as expected there were no fireworks today.

Kerkorians Tracinda group is offering to buy Chrysler from DaimlerChrysler AG for $4.5 billion. Kirk is 89 years old and at his advanced age I wonder if he still calling the shots ? And does his bid for Chrysler mean he's through with GM ?

The Euro has moved to 2 year highs against the US Dollar. There is talk of a huge inverted head and shoulder formation that could take the Euro to 1.45 and beyond. Long FXE.

The Dow has been up 6 consecutive days. The last 6 day up streak was in November just prior to that 180 point down day.

The casino capital of the world. No its not Vegas.

Here is a great tool that can track the correlation of various positions in your portfolio.


Looking at the week ahead here are some of my thoughts

• Volume will return in a big way after this holiday shortened week
• Bullish sentiment will be high next week which will probably lead to some downside
• Employment numbers are out tomorrow and it will likely move the market significantly
• Who will private equity buyout next week ?
• As the indices close in on the point prior to the Feb 27th plunge, alot of market participants have already forgotten about Black Tuesday.

UPDATE

Listening in on the GRZ conference call. Last week GRZ, a gold mining entity received the all important environmental and construction permit for their Brisas mine in Venezuela. Stock is up over 50% since then. Things sound very promising. I am adding to my position . I anticipate a big miner will take a stake at a premium in this company in the not too distant future.

Pre market

Mixed markets across Asia. The same is true with the European indices.

Jobless claims are up suggesting economic growth is still sluggish.

China is increasing bank reserve requirements in order to stem growth.

The Board of England leaves interest rates unchanged.

EARNINGS CALENDER

Constellation Brands beats analyst estimates on rising beer sales.

Micron Tech indicates memory chip pricing seems to have stabilized.

Ninetendo beats sales and profit estimates. I do believe this will be the case for the rest of the year. The WII is going to do for Nintendo what the IPOD did for Apple.


Futures indicate a mixed open . I do not expect to see a big move in either direction today ahead of the long weekend. Volume has been light all week and will continue to be so today.

Pre Market

Another day of green arrows across the Asian markets. The European markets are mixed at this stage.

The ADP employment number suggests moderate job growth.

Factory orders and ISM non-manufacturing report are the other key economic data coming out today.

EARNINGS CALENDER

Monsters profit falls short of forecast.

Best Buy profit increases due to high flat panel television demand ( Super Bowl ). Rival Circuit City posts a loss in part due to restructuring.

The markets appear for a flat to lower open. How well it does from there depends on the factory order and ISM reports.

Market Recap

The indices rallies to 5 week highs. I was not impressed with the volume and therefore sold a big portion of my bull ETFs. I also took some of the table on a few long positions that were not performing today.

An unexpected but welcome jump in home sales powered todays rally. I do not see this rise in home sales as a sign of a real estate market recovery.

US automakers saw March sales decline while Toyota sales continued to rise.
TCG view: Toyota makes autos that have universal appeal. Ford, GM and Chrysler do not.

A subprime lender gets a boost and shares surge. Do I smell other bailouts on the horizon ?

Goldman Sachs gets a kick in the ass. I guess all that 'inside' information and technology at their disposal still couldn't save them.

Is a chip maker recovery underway as inventories start to decline ? There appear to be plenty of 'bargains' in the chip sector.

I love pulling out investment ideas from these screens. A word of caution; These screens are not a substitute for your own homework.

Is Jones Soda the next Hansen ? The stock is on a tear .






Tax season is here and if the IRS decides to come after me I'm going to pull one of these.......

Pre Market

The Asian markets were very strong overnight with solid green arrows all over. The momentum from Asia looks to have carried over to the European indices. I expect the bullish momentum to carry over to the US markets.

The pending home sales index will be the big piece of economic data released today.

Crude oil settles down as the dispute between Iran and the UK eases.

The US dollar has been gaining strength this morning while the Japanese Yen is pulling back.

Moodys is cutting credit ratings on up to 40-50 US and European banks. Banks are visibly upset.