Wild Wednesday Wrap-Up

Woo hoo – what a fantastic day!

We hit the nail on the head today, rolling down and buying out callers, bottom fishing some great plays and NAILING the turn in the market pretty much right on the button.  Thanks to a delay in the new Basic Membership launch, free readers can review the days comments HERE, we have been posting $25KP and Bottom Fishing Virtual Portfolio picks live during the day as the alerts aren't working yet and we want everyone to be able to follow along at home while we work out our bugs.

Given that you can read about the day if you are so motivated, I won't hash that out.  We're not out of the woods yet and it almost broke my heart to re-up my DIA covers at the day's end but rules are rules…  Our $25KP had an accidental $1,000 gain on EDU (I didn't mean to buy so many) and is up 6% in 2 days of trading and the new Bargain Basement Virtual Portfolio is already up 5% in 2 days but it remains to be seen whether or not we get any follow-through to yesterday's move, which only managed to bring us back to Friday's open after all that fuss.

I said in the morning post we needed to keep emotion out of it an watch our Big Chart levels and, while we are much improved from the horror of Tuesday morning, we are not out of the woods yet:

We've lost ground in Asia and Germany fell below our comfort zone with the DAX being the most important of the global indices so we really need them to pull it together this week.  I don't see how the Nasdaq is going to hit our "Feeling Better" level of 2,380 without first putting their SOX on – down 37% for the year in semiconductors is a hard thing to get around if we want to maintain the premise of a generally strong global economy.

The good news is we got in-line numbers from QCOM, which was Better Than Feared, which is my new term for companies that win in the new game we like to call "How Low Can Your Expectaions Go?"  QCOM jumped almost 10% after hours on a penny miss and The Street's headline says it all: "QCOM: Not Bad Considering Trouble in Handset Space." 

Things were 42% worse at COF, as they took a $95M charge for shutting down GreenPoint Morgage and missed low expectations by 5%. "We're acting decisively and aggressively to manage the company … in the face of cyclical economic head winds," CEO Fairbank said on a conference call with analysts.  "We're pulling back on loan growth, focusing on our most resilient businesses and closely managing credit with the insights and experience we have garnered in prior economic downturns."  This is why Fairbank isn't allowed to coach my girls' soccer team, the opening was good but that second sentence didn't exactly fire up the troops!

EBAY was no help this evening with downside guidance thrown in on top of a perfectly good beat in earnings.  The company is once again lowering its fees as they continue to make the mistake of turning themselves into a wholesale operation run for the benefit of the "power sellers" who only serve to make it less attractive for regular people to get involved (compete).  Meg is retiring and I don't know John Donahoe, but it will be interesting to see if he has any ideas for the company.  I offered to fix Ebay back in October of '06 but Meg ignored me and the stock has gone nowhere (other than my predicted Q3 spike) so hopefully Mr. Donahoe will give me a call next month as I still see a lot of potential in this company.

GILD was in-line and NFLX had great earnings (70% beat) but missed estimates of new subsribers by 7% so, hopefully there will be a buy opportunity in the morning as they have been hit very hard for no good reason it seems.  There is upside resistance at $24, where they hit the declining 50 dma, and that may be a good place for us to pick up some March $25s, which were $1.75 yesterday, hopefully for less than $1 on a rejection at $24 and the post-earnings crush in volatility.

The main catalyst for today's rally was a report that New York regulators and banks met to discuss a plan to raise capital for bond insurers – something we've been discussing for a while as the states cannot afford for their own bonds to lose their AAA ratings due to lack of insurance from MBIA, ABK and others.  This kind of rally makes me very nervous as it's based on rumor (the meeting was real but no "solution" yet), not facts, so follow-through will be key tomorrow.