Portfolio up 0.2%, Dow down 1.06%, Nasdaq down 0.86%, S&P500 down 0.85%, J-Blimps dowm 0.8%, Fuel cells/Alt Energy up 0.6%, Gorilla Hunters down 0.0%, Gilder2001 up down 0.1%, OC-192 up 1.7%.
NYSE Volume: 1,526 mln...Adv: 1198...Dec: 1866
Up Volume 533.57 Down Volume 985.08
New Highs 73 New Lows 31
Nasdaq Volume: 2,519 mln...Adv: 1825...Dec: 2018
Up Volume 1160.30 Down Volume 1341.32
New Highs 65 New Lows 32
Put/Call ratio 0.48 (Range 0.36 to 0.51)
Under 0.40 is Very Bullish sentiment, 0.40-59 Bullish, 0.60-0.79, Neutral, 0.800-0.99 Bearish, Over 1.00 Very Bearish. When many are bullish, this may be time to take profit.
May natural gas $5.12 per million British thermal units. Up 2 cents
VIX 29.01
When it runs below 20, usually a good time to take some profits. If above 35, good time to buy. The VIX, intraday, hit 37.72 on Dec. 21 and posted a 52-week high of 41.53 in last April's carnage.
Sector Watch
Breakout of the day
Oil Services ($OSX) 118.23 +3.21 +2.79%Bounce after being down a few days
Collapse of the day
Hardware ($HWI) 232.83 -8.58 -3.55% Profitaking
QQQ at $48 Chart: Perhaps a turn. Blocks: 744/807. Volume%: 66
Profitaking
One stock
Microsoft( MSFT) Up 1.41% yesterday beat Wall Street's earnings estimates, reporting net income of $2.45 billion, or 44 cents a share, topping its 42-cent First Call/Thomson Financial target. Microsoft's revenue was $6.46 billion, up 14 percent from the year-ago period, and better than the 9 percent gain Wall Street analysts predicted.
Note: Received well. Volume highest in three months.
Portfolio Watch
BRCD up double digits. Banc of America Sec. upgrades to BUY from Mkt Perform; feels that business conditions at BRCD are near a bottom; signs of a bottom are consistent with firm's industry/channel checks as well as what other infrastructure companies have been seeing. CEO Reyes says that "enterprise customers are starting to spend money again" but says that this will not manifest itself in renewed revenue growth until the Fall; suggests that enterprises aren't sitting on their hands, they are just taking more time to make purchase decisions. Company indicates on call that revenues will be roughly flat in the July qtr before picking up in the fall. In response to question about McData (MCDT) and competition for business with EMC, CEO Greg Reyes says that Brocade "did not lose any revenue traction at EMC" and even gained share, and that there is no inventory build-up of Brocade pdts at EMC; subtly hints that there might be inventory build-up of MCDT pdts at EMC. On conference call, Brocade is relatively optimistic about the future; says this is low-water mark for the company, gross margins will remain in 60% area, company has no inventory overhang, and DSOs will remain in 50-60 day range. Stock only down slight in pre-market at 30.10, as this warning was not as bad as many had feared.
Watch List things to watch but not trade
Argentina Woes : Goldman Sachs squawks that financial situation in Argentina
could continue to get worse as no US help is expected and Argentine consumer
confidence is deteriorating thus threatening a run on the banks. Says that
recently appointed Finance Minister Cavallo has not proposed significant
spending cuts, thus increasing the default risk, and has also exacerbated
fears of a peso devaluation by talking about changing from a 1-to-1 dollar
peg to a peg vs a basket of currencies.
Note: really more important than many realize. We had Turkey blow up, The Thai Baht in trouble, now this.
The LatAm chatter is starting to make it's way around the street, and I'll
reiterate that my intention was only to pass along what I was hearing, not
talk my position. Todd Harrison of TSCM
Note: I think financials that have exposure or companies in that area may be vunerable.
Quote of the Day
Does the market have to decline because we're reaching an overbought reading Friday? No, it doesn't, but it can. And Thursday's rally wasn't very broad-based, so I suspect we will see the market back off for a few days. That action will keep the bears happy, as they'll feel justified that the rally has stopped, but it will also make the bulls happy, as they'll see the opportunity to jump on board. So the bears will try to push it down, while
the bulls will be in there buying. That's how momentum stalls. While we may be seeing a short-term peak in upside momentum that will probably cause us to back off here, I don't believe we've seen the last of this rally. For us to believe this rally is over, the intermediate-term indicators need to halt their rises and roll over as well, and these indicators are still rising. Helene Meisner
Note: Nasdaq up 24% in two weeks. That’s years worth gains in a normal market.
Summary
I am starting to feel that this market move resembles Oct 1998. We ran for three months before a pullback. I could envision a scenario of running hard to the May FOMC meeting, but the two sell indicators must not trigger.
Put/call got below sell indicator intraday, but option expirations was the reason. The put/call closed above 0.40 at the end. We will ride the wave until either Put/call or VIX hit sell numbers.
Jack
