Stocks Move Up

Stocks are now on the rise. The Nasdaq's chart looks like it's going to keep moving on up. Keep going and going!

Market Update: Dow Down

Immediatly after my last post, the Dow, which had been up about 40 pts, plummeted and is now down about 30 pts. I will continue to update this blog throughout the day as the stock market moves and see where we go.

Back in Positive Territory
Looks like we're moving back up again. The Dow is only down 11 pts now and the Nasdaq is up. So far today we've been positive more than negative today.

Dow Up 11 at 10

Thursday, December 18 2008 Market Expectations

I expect that both the Dow and the Nasdaq will finish higher today. The jobs report will come out bad, but "better than expected and things will go up from there. I think we'll see gains of 1.5 to 3% in these markets today.

For Friday, I believe the market will go up a little more to end the week with gains.

Apple to Release Earnings... What do I expect?

What do expect when Apple reports today? I do believe their stock will go down either way.

Piper Jaffray analyst Gene Munster has made an interesting observation related to Apple's past outlooks. In the last eight quarters, Munster says Apple has guided its earnings per share or EPS 9% below the consensus estimate and sales 4% below, on average. Apple then tops the original EPS estimates by 27% and sales estimates by 4%.

So, analysts have a different ballpark. The consensus earnings estimate for the fourth quarter is $1.11/per share, on $8.05 billion in revenues. In the year-ago period, Apple reported EPS of $1.01, on revenues of $6.22 billion.

Analysts are also expecting Apple to say it sold 2.7 million Macs, 10.5 million iPods and about 4 million iPhones during the fourth quarter. In the third quarter, the company sold 717,000 iPhones, 2.5 million Macs and 11.01 million iPods.

The gross margins will be an important point of investor focus. In July, Apple rattled investors by guiding its fourth-quarter gross margin down 330 basis points sequentially to 31.5% from 34.8%, citing new low-margin products. During the quarter, Apple revamped its iPod line of portable media players and launched the iPod touch, a lighter and lower-priced version.

Apple's Q1 guidance will also be on the radar. Some analysts believe that Apple should stop issuing ultra conservative guidance that does not truly reflect the company's potential performance. Street expects the company to report $1.65 in EPS on $10.57 billion in revenue for the first quarter.

Wow on the Dow...

Up 932 pts on Monday. Down 733 today. Wow, talk about a roller coaster!

This is very interesting. These days are getting crazy.

So what do I expect for tomorrow? I'm not entirely sure, but I do believe we'll have at least a slight rally. Why? Well today was a bad day on The Street because of worries of a "prolonged recession." While this may be possible to be happen, this news came in and we didn't break through Friday's lows. Today the QQQQ's closed bottomed and closed at around 30. Friday's low was 29.38, though the final close was 30.58. On the Dow the close was higher than the Friday close which was 82. Today's Dow close 84 vs 82 on Friday.

CIT

Check this stock out, it could be getting ready to go through the roof.

Intel Jumps

Intel's profit has jumped. Is this a selling opportunity? Watch this stock.

Predictions for Tomorrow, Wednesday Oct 15

Tomorrow is the 15th of October. The week so far has seen incredible moves. The Dow is hovering just above 9000. This week so far we're up quite a bit from where we started with a jump start of 932 pts on Monday. Today we saw another jump which ended up settling down. Current R is at around 9700. My expectation for today was that it would hit 10,000 which did not happen. I felt that we were just down too far and that a pull back would be delayed. However, there was a pull-back.

Tomorrow I expect to see a slight rise around 200 pts and then a fall and then a rise again in the afternoon.

Market Insight

Some more market insights from Investors Business Daily.

In a bull market, "Railroad Equipment, machinery, and other capital goods industruies are late movers in a business or stock market cycle.

Another bit of insight:

In bear markets, stocks usually open strong and close weak. In bull markets, they tend to open weak and close strong. The general market averages need to be studied closely every day since reverses in trends can begin on any given day.

Based on this information, the market that we're currently in is undecided in weather it's a bull market or a bear market since stocks alternate quite a bit. Some days they will open strong (i.e. Friday, Oct. 3rd) but closed very weak (bearish), but on Wednesday it opend weak and closed strong. Given these factors, it's difficult to predict the direction that the market will move next, but I would say that we're probably getting very close to the bottom of the current bearish market. However, I wouldn't say we're there exactly yet, just that the indicators seem to be saying that we're very close to it.

Becoming a Bear

I've been a bull so far, constantly looking for opportunities to buy stock. But the more I look around, the more I see that bulls just aren't making money right now. Every stock that looks like it's about to hit a bottom and move up somehow ends up blowing through support and continues on a perpetual unending slide downward. It's like gravity has overtaken the market and continues to pull it further and further down. Will this change someday? Maybe, but it doesn't look like it's going to happen anytime soon. But what does it matter to me if the market continues to slide? To be quite honest, I know the bears won't be able to take the entire market to zero, but they're going to try and take it as far down as they possibly can. When the market converts back to a bull, then I may revisit a bullish stance and seek to bring out that inner bull again. However, for the time being, I'm a bear. I only hope that the SEC doesn't make bears illegal now...

Stock Comparison

Z Market Rules for Trading

Here at Z Market, we're in the process of adapting a process that we can use to trade to make the most amount of successful trades each month. Our initial goal is to make a profit of 3% per week. Over the last number of months of evaluating the market, there have been several important observations made about the way the markets work and how to respond to them. 

Rule 1: Examine P/E Ratios

In "How to Make Money in Stocks" by William J. O'Neil, we find the following quotation that has been very important in coming to some conclusions on purchasing stock trades.  He says that "primary consideration should be given to whether the rate of change in earnings is substantially increasing or decreasing." On the basis of this, it's important to chart the P/E over time of a stock and see how that ratio is faring in consideration to the stock price. As an test of this observation, I'm going to update this post with several of my favorite stocks over the next week. 

As of  9/29/08:

RIMM: 22.6

AAPL: 25

MSFT: 14.4

RIG: 7.6

CHK: unavailable

TRLG: 20.2

WMT: 18.1

TGT: 15.4

GS: 18.3

WB: unavailable

USB: 15.8

BAC: 20.2

GOOG: 28 

YHOO: 25.26

Google (NASDAQ:GOOG) Ready to blast off?

As Google's price keeps dropping and dropping, I'm amazed to see it going lower and lower. This stock is close to half it's value earlier this year, but has always reported strong quarters and even recently was sported as one of the strongest stocks out there.

Apple (NASDAQ:AAPL) A Big Buy?

Apple (NASDAQ:AAPL) has been trading lower and lower hovering around 160. Most of what has taken this stock down seems to be the overall broad market and the tech stocks have been going down since Dell reported a pretty bad former quarter.

The Fate of Fannie and Freddie

So what do you get when the Feds attempt to run a "private institution"? Fannie Mae and Freddie Mac, examples of government innovation and intervention.

While I do not want to turn this blog into a political one, politics and the markets are pretty much inseparable. And when the government tries to step in and create something that should be left to the private sector, it is almost a guarantee for failure.

Is the Real Bear yet to Come?

I'm starting to get the rhythm of it. The markets ebb and flow go in and come out, kinda like the tide of the oceans, in somewhat less predictable patterns. Oil goes up and so does the entire energy sector. Also, other industries that depend so much on the price of oil and it's byproducts go down.

But then there's something else. The big bad bear known as Russia that has been causing some little problems over in Europe. I've still been hearing things about it politically, but tonight when I clicked into MarketWatch.com, I saw an article that confirmed the sneaking suspicion that I've had that this could become more of an issue.

A major fault has opened up in relations between East and West that threatens not just global securities markets, but the economic health of Europe and the foreign policies of the major industrialized countries.

Fourteen days ago, relations with Russia were on nobody's short-list of major issues for the U.S. presidential candidates. Now they threaten to overshadow the political conventions in the next two weeks, and the rest of the campaign. They've breathed new life into the McCain camp, and vaulted foreign policy into much more than a discussion of how soon we can bring the Iraq troops home.

The story continues, but the author's point is that these concerns have not been alleviated much yet and Russia still poses a threat to world markets.

If Russia does continue as it has threatened to use "more that diplomacy" as it deals with it's European neighbors, how will our markets respond? There are of course different possibilities. Investors could move out of Europe as it destabilizes and put more investments here in the U.S.. That is very much positive thinking. I'd say that the strongest companies to invest in at this time would be those in the energy sector which stands to gain if there is another "cold war" stand-off between the U.S. and Russia. Of course defense spending would be influenced as well.

As David Callaway says, "for now, it's a war of words, blusters and veiled threats. If Russia decides to play its energy card, and threaten Europe's oil, it becomes much more."

Investors should prepare for the worst though as a "rude awakening" to a potentially huge conflict which like a festering wound only grows more infected when no action is taken. Things may not be looking so bullish after all.

Oil and the Airlines: Inverse Proportion

So I was interested in some airline companies (AAI and CAL respectively). So this is a lesson I learned the hard way. As oil found support at around 110/barrel, the airlines found resistance and could not overcome that barrier. An analyst said that under 110 the airlines could be profitable, but that looks like a pipe dream so airline stocks are now continuing to go lower and lower as oil begins to rise back up.

Researching Wabtec (NYSE:WAB)

I owned a few shares of Wabtec (NYSE:WAB) about a month ago and am thinking of going into it again. This stock has kept ticking right on up even when the rest of the market has been going down. Also, my research shows so far that there is a growing institutional interest in this stock which would definitly explain part of why it has defied the last two strong pulls towards the bottom in the last two days in which the Dow has given back almost 300 points from the gain that it made over the last couple of weeks. I'm developing some strong convictions on Wabtec and think it could really fit into the overall scheme of my portfolio.

Riding the Roller Coaster

Well, the last two days have been pretty crazy. Though I'm new to trading, it doesn't take a genius to know that double digit dives aren't things that happen every day in the market and that this is a very choppy market right now. I'm learning the importance of quickly distancing myself from lousy positions, as those are often the biggest losers. I'm also learning that strong trends tend to keep going for at least a while. This downward trend began last Friday when the market came to a "shoulder" and then turned over and started moving down.

AirTran set for Take-Off? (Stock symbol AAI)

This stock seems to be hovering right around the support level. The company seems to have good fundamentals and as a small company, I think this company can do well in a huge industry. So is AirTran poised for takeoff? Maybe so.

Apple's new gadget...

Apple's rumored to have a new gadget on the way! What could this new gadget be? Apple has a history of being extremely secretive and encouraging the rumor mill that so often springs up around their products that have an extremely loyal following.

Another Market Blog

As a beginning investor, I'm creating this blog as an observation of the market and things that I observe while watching the market develop. I do not make product recommendations or investment recommendations but simply comment on what I see happening in the market.

As of late, the market has jumped up and down all over the place. The price of oil is down the greatest amount of any month in history and this is greatly a result of speculation and also a shrinking demand for oil.

Another interesting item that I saw today was a computer that Dell is coming out with that smaller and lighter weight and comes in a stylish box. Usually I'm pretty much just a Mac guy who never has any interest in PCs. However, looking at this product, I find it very appealing in many respects. It is a very small tower but is not a tower that I would mind having out in the living room next to the coffee table. It could easily fit into a TV or entertainment center.

It’s clear that form as well as function was top of mind with Dell’s new Studio Hybrid desktop PCs. As the smallest that Dell has ever brought to market, the computers employ funky and curvaceous styling, along with six bold colour choices.

“The design and craftsmanship of the Studio Hybrid alone are enough to cause you to do a double take,” said Phil Bryant, Vice President and General Manager, Americas Consumer Sales, Dell Inc.

At about 80 per cent smaller than a typical desktop tower, the Studio Hybrid PC can easily be positioned in any space, either vertically or horizontally. In addition to being small in size, Dell says that it also consumes up to 70 per cent less energy than other desktop units.

You can read the rest of the story about this unique computer here.