Well the markets turned, although you wouldn’t know it from CNBC or the other news agencies because the DOW stayed down. That’s right, the Nasdaq, NYMEX, S&P and Russell 2000 all posted gains representing over 2,500 stocks but all you will hear about is that the 30 stock index of industrial dinosaurs had a bad day.
I’m not going to go into another rant about how stupid the DJIA is, just ignore that index unless you are investing in big companies who get dragged down with their DOW competitors.
On the overall economic front – more so than the addition of 200K jobs that Bush somehow is trying to take credit for – I think the statistic to watch is Hourly Pay. Hourly Pay rose .2% in November and they revised September and October up as well. That gives us 3.2% average raises for the year and that’s a lot. This is a real indicator of full employment (I always felt that 5% unemployment is full anyway) and should mean the Fed really does have to stop tightening very soon.
Then why are they clamping down on immigration all of a sudden? Well, there are still 900,000 people over the age of 16 who are effectively homeless from Katrina so the politicos are circling the wagons to make sure these people don’t start showing up on unemployment reports! Less than 1/2 of those people have jobs vs. about 65% of the normal population so we need to create about 200,000 new jobs just for this group (assuming they don’t go back to New Orleans to work).
Speaking of New Orleans – the construction industry has added 72K jobs since last month in a season where they are usually laying off so that bodes very well for the materials industry.
Oil was up almost $1 today but you wouldn’t know it from XOM or COP. XOM was the only one of my oil picks to go down but I have zero tolerance for this sort of thing!
http://finance.yahoo.com/q/bc?t=3m&s=SUN&l=on&z=m&q=l&c=cop
This chart shows how closely they tracked right up until that day. I have a bet on COP snapping back into place on the high side but my patience is wearing thin.
Trade of the Day WAG was off to a great start but pulled back fast from $46.80. I was up 30% on my calls but it was only .15 so I didn’t sell and now I am stuck with them. Had I not been greedy I could have gotten out or, even smarter, if I would have bought the $45s in the money I could have gotten out with the same 30% profit but it would have been .50 and I would have been smart enough to take it.
I am very proud of my 11/22 list of Umbrella Stocks, they really help on days like today. That group had great numbers today: INTC +1%, TXN +.75%, UPS -1% , WMT o, TWX + .6%, VLO +.7%, GLW + 2%, AAPL +1.5%, JOE + .7%
I am going to add SBUX to that list. I think I may have to give up on waiting for a pullback on this one – we will see what next week brings. FSL may rate inclusion too but I might not want to have three semis (Cramer would say I was not diversified enough). Speaking of Cramer, I should also add UNH to that list – that stock is a great IRA keeper.
There should be a note on my monitor that says “Buy BTU in the 70s” so I don’t forget next time. It was Trade of the Day on 11/22 at $76 and we were supposed to get out at $78.75.
MOT (I own it) went down 2.5% for no reason other than B of A reiterating (no change) a neutral rating on the stock. I won’t go into the incredibly poor quality of B of A’s picks or the fact that they have always lowballed Motorola’s target (a stock that happens to be held heavily by competitors Barclay’s, Citigroup and Mellon). Morgan, on the other hand, reiterated an overweight rating with a $26 target. Nonetheless, this was a devastating drop for MOT and it now may have to test $22.50 before it can make a solid move up.
I was feeling bad about OSTK from the 21st but it finally came even today. I still like it but not as much.
FRK had a pullback that didn’t bother me enough to get out.
Tuesday’s home picks are just about ripe for execution, we are waiting for TOL to turn down to confirm the trend.
LVS continues down. TRMP may be a buy – I need to research that.
SHLD was a great call but be careful at this price. It really confirms my channel though!
MRK calls recommended on Weds am have doubled, keep them at your own risk! All it takes is one bad reaction to one of their 500 drugs… Within 2 weeks of option ex, you really need to be looking to get out for any reason and I really do think it was just a bounce….
PLAY still can’t get past the 50 dma but it is pushing hard against it. The 200 dma is now closing in for a squeeze, either that or Apple at $75 will propel this stock up past $25.
GME rocketed back 5% today. I don’t trust it enough to go in yet but congrats to Wedbush Morgan for having all their sheep dump it on the 29th so everyone else could make 8% in two days.
SIRI had a wild day today, all the way down to $7 then back to $7.12. This is why I have the leaps, mine only moved a nickel! I thought about selling the $7 calls for .30 (a 10% gain on my leap) but this thing can pop any moment and I’d hate to have to pay it off so I’m just keeping the open position atm.
My Ebays and TWX’s both came back since I bitched about them so I am going to complain about my underperforming stocks more often. Between Uncle Carl and Harry Potter, I think TWX will be great next week.
I think that SYMC has Microsoft competition safely baked into the price at this point so I am now looking at this as a long. I would love it if something else hits it next week but I’m not going to let it get away from me either.
Google marches on which makes me want to take a close look at CME which bounced nicely off its 50 dma. Interestingly, CME diverged from Google on almost the same day the Conoco diverged from Sunoco!
http://finance.yahoo.com/q/bc?s=CME&t=3m&l=on&z=m&q=l&c=goog
I’ve looked into Calpine some more and I won’t be putting my 10 cents in after all. The company looks good on paper but they have been buying up tremendous amounts of energy production capacity that turns out to be mostly using natural gas as a fuel – that is a very unfortunate strategy since the price of gas has increased 6x from when they started buying in ’01…
