Take-Off Tuesday

Here’s my theory: If that news from Dell can’t kill the market then nothing can. I think investors will see anything other than a big sell-off as a tremendous sign of strength (like last year when London bombings didn’t kill the markets) and will start pouring in later today or tomorrow. We’ll see if I’m right but I’m thinking we only need to get past Cisco’s earnings tonight and tomorrow’s Fed meeting and we could be in very good shape. Asia doesn’t agree with me and gave up most of yesterday’s gains on average. The European markets are a bit higher though and I think the realization is hitting people that Dell’s problems are Dell specific and not an industry issue. The oil picture remains unclear as what was thought to be a peace offering from Iran has already been rejected by the White House (and now we are putting a General in charge of the CIA). http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42674&NewsKind=Current%20Affairs http://today.reuters.com/news/NewsArticle.aspx?type=topNews&storyID=2006-05-09T093035Z_01_N09243624_RTRUKOC_0_US-NUCLEAR-IRAN.xml&WTmodLoc=NewsArt-L3-Top+NewsNews-2 This lovely geopolitical nightmare should keep gold on a roll to $700 (as I predicted last week) but oil is still heading for a great fall as the fundamentals are just crushing in on it. Tomorrow’s inventory report will either be a nail in the coffin or a repreive but, without an actual war with Iran, the fear factor is already maxed out. Dell has now lost about $40Bn in market cap since last Summer and it’s pretty much gone straight to HPQ: http://finance.yahoo.com/q/bc?t=1y&s=HPQ&l=on&z=m&q=l&c=dell I’m not over-commiting until I see how the market holds up today but I really am getting excited about the market right now! Even GM made a profit last quarter!!! Watch rates today as we have a note sale pending and lack of foreign interest could be a market mover… ===================================== Do not, under any circumstances, buy GM! Although they are showing earnings it is purely an act of voodoo accounting and does not reflect the overall health of the company. The numbers they are talking up today include GMAC, which they just sold, leaving them with a production facility that loses $600 for every vehicle sold. With the increasing price of commodities and a 6 month turnaround time from assembly line to auto sale, one could argue that GM would make more money stripping the cars back down and selling them for parts! Let’s watch this one for yet another shorting opportunity! SNE is beyond confident with a $499 price tag for the PS3. Now I have money and I won’t pay that for a game console. I like computer games and play them on my PC and find it superior to what’s on consoles (but I don’t play shoot ’em up or driving games) and, even as an indulgent parent, I can’t see approving this kind of expense for Christmas. If Sony happens to hit a slumping economy as this thing rolls out it could be a catastrophe of biblical proportions. It will all come down to how important a role the blue-ray DVD feature can play in people’s buying decisions. The president of TM North America is resigning amid a sexual harassment scandal but I would buy on any dip. Another company benefiting from Dell’s woes is AAPL. I still like the $72.50s I liked yesterday, still at $1.50 and the $75s are still .60. As predicted last week, PKS had mildly disappointing earnings but I don’t expect anything exciting there. I got my EBAY Jun $32.50s for .90 yesterday, today we will see if I regret it. BVN should turn around next month after the elections. I really like the Jun $30s for $1.30 as the polls look like Garcia has a lock: http://weblogs.elearning.ubc.ca/peru/ QTWW looks like it’s ready for a breakout and should be getting a little press on a small order for hydrogen cars from Norway. I like the Jun $5s for .35 as a quick trade looking for a double but it’s very risky as the stock is easy to manipulate. Whatever HPQ (5/16) Jun $35s are going for, I’m buying them at the open on the Dell drop. As of yesterday they were .85 but hopefully they will come down a bit. INTC is also giving you another chance to get in as they pulled back on Dell worries. I like the Jun $20s for .70 or less. The Valero Rule is holding up very well in the oil sector and our Friday put list is still in great shape if oil moves below $69. MCD had great global growth and should be able to break over $36 on this run. I like the Jun $37.50 for .20 as a momentum trade but I don’t expect it to get there so take the money and run before $37. SYMC has earnings later today and the Jun $17.50s are just .75 after yesterday’s drop but this position can easily be wiped out by a bad report. Speaking of Cramer stocks (we were in yesterday’s comments) SRZ is postponing earnings for an accounting review. No one likes to hear that and the stock will drop hard today, probably back to the 50 dma at $37.50. To illlustrate how unloved health care is right now, THC beat by 100% and is still getting hammered because revenue dropped 3.5%! On that basis alone I will stay out of UNH… On Cramer’s bright side, HANS creamed earnings and is up 12%. I like this stock a lot but they cost $150 a share and have no options so I never play them.