Cam at the Close 3.8.12

When weakness occurs in equities, this is generally what you want to see for confirmation. Even at $600, Apple’s valuation is not outrageous. If you are using next year’s forward EPS estimates of $48. That gives you a P/E of around 13x. This is still very reasonable, but my fear is that being long Apple is becoming a very crowded trade. Every day I hear someone talking about it and when the whole world thinks they know something special, it generally does not bode well as time goes on. The volatility in Apple is become much greater as well. In 2011, Apple rarely made intraday swings of 10-15-20 points, but now it is becoming normal behavior. Apple is the greatest company on the planet and there is no argument about that, but stocks do not go up in a straight line forever and that is a fact. It feels like investors are looking at Apple as an asset class, instead of a company that is driven by products. I firmly believe that Apple must close above $545 if the market continues to uptrend in order to continue its rise. If not great risk/reward short sets up might start to appear.

Written by Cameron Patrick
@Cam_Patrick

Halftime Report for 3.8.2012

Today, the price for Greek CDS bond topped par today for the first time. Live webcast of the ECB press conference reports, “still no plan regarding the Greek PSI.” US Initial claims miss expectations. This is the 3rd consecutive miss, first time this happened since Aug of 2010.  ES is up 12pts at the highest level of the day as Greek default might be priced in. Crude Oil rallied to the $107 or up .77 /(.73%) as geo-risk premium is still hanging its ugly head. The House of Representatives just passed the jobs act as there is still fear in the unemployment picture.

DO NOT FORGET ABOUT THE ALL IMPORTANT JOBS NUMBER!! Should be a Market Moving Event.

In the earnings line for tomorrow: HIBB (Hibbert Sports), STEM (STEM CELL RESEARCH) and TITN.

Movers and Shakers (MCD) down $3.19 (3.18%) to $96.99

Chart Glance: Breaking out of a neutral, sideways, trading zone. High volume shows distribution. MCD is not a volatile, exciting stock that moves a lot. Support 1: $97 Support 2: $90.19.

McDonald’s shares were down 3% in pre-market trade after its February sales missed estimates on weak Europe and Asia numbers. Even though sales expectations were “high” for McDonald’s, same-store sales were a “disappointment,” but global sales up 7.5%! Did the strong USD finally catch up to McDonald’s numbers? Sales growth slowed last month on weak numbers in the Middle East and Africa, where sales growth decreased by 1.6%. However, in the US, a new food item called, “Chicken McBites and the AMAZING Shamrock shake,” should improve McDonald’s balance sheet.

Morning Rage 3.8.2012

Earnings Today:

American Eagle- reports earnings after the bell. Options imply about a 9% move in either direction. American Eagle Q4 inventory is still high around +26%. However, a much better improvement from +42% in Q3 2011. Wall Street analysts expect the teen retailer to earn 38 cents a share on revenue of $809 million. In January 2012, ARO reiterated its fourth-quarter earnings outlook to be between 35-38 cents. Personally, I am staying away from most retailers. Their charts look topped out for the most part. Finally, Discounting the unwanted/unused winter merchandise will probably squeeze all retailers gross margins.

Bke- The average analyst estimate is earnings of $1.14 per share. Estimates range from $1.11 to $1.18. Weekly support is at $42.90, which was last week’s low. Buckle’s February same store sales up 14.8% vs 5.8% estimates. For the month of February, total revenue increased 17.4% to $86.7 million from $73.9 million in the same month last year. Buckle’s closing price yesterday was $47.88. Buckle’s 52 week range is $33.97-$47.88. In my opinion, Buckle is going to really have to to blow out earnings and raise guidance for this stock to make fresh 52 week highs today.

Cam at the Close 3.7.2012

As the market was getting pummeled yesterday, DECK still remained above a key support level at $75. This was not the case today and investors punished DECK. DECK fell 10% after cracking $75 and traded 8M shares. It traded 5x normal volume today. I would wait until DECK sees some consolidation and I would watch for buyers to step in before trying to bottom pick this name on the long side. The SPY saw a nice gap up around 8am PCT. It shot from $135.17 to $135.60 in a hurry. Corrections in an uptrend are extremely healthy and with the action seen today, it is clear that the uptrend is still very much intact.

Written by Cameron Patrick

@Cam_Patrick

Halftime Report for 3.7.2012

A Live blog from Apple’s iPad 3 media event (starts at 1PM Eastern) can be seen on various websites. Third-Generation iPad parts, suggest just minor changes to the new Apple 3 iPad. However, rumors are that the new iPad 3 has “never before seen touch technology.” Fake Retina Display pictures are all over the internet for the third gen iPad. Also, another rumor is that the iPad3 RAM will be 1GB (double the amount).


Morning Rage 3.7.2012

The DAX is trading lower all morning because of weaker than expected January factory orders. Crude/ Brent Oil are catching a bid this morning as there was a decrease in US gasoline inventories data and the USD has been under heavy selling pressure. It amazes me the rally the EUR/USD had in January from the (lows of $1.26). The reason I say that is because of the horrible data out of German non-Eurozone factory orders last night.

Today, markets are awaiting the all important US ADP employment revisions. Also, DOE oil inventory number will be announced at 1015 am.
By Greg Zimny

Trade of the Day (GDXJ) 3.6.2012

Unprofitable: This trade is unprofitable if GDXJ closes under $24.60 by April 20, 2012.  The most this spread can be worth is $1 minus the $.40 I sold it for, so my maximum loss is $.60.  I am risking $60 per 1 lot to make $40 on this spread.

Reason I Like This Trade: When GDXJ was trading $25.58, I saw someone sells 4250 GDXJ April 26 Puts for $1.50.  A also saw someone sell 2500 GDXJ March 28 Puts for $2.50 and then buy 2000 GDXJ March 27.63 Calls for $1.  This is very bullish activity, so I wanted to get LONG the GDXJ. 

UPDATE 3.9.2012 This is very similar to my DNDN trade, I am not taking profits, even though this trade is working out very well so far.  I continue to play to the upside in many stocks, but always defining my risk vs reward.

UPDATE 3.12.2012 With GDXJ with overlapping bars, I think that GDXJ has limited downside, so I will leave this Put Spread on for more potential profit.

UPDATE 3.15.2012 With time on my side, this trade has decreased in value even though GDXJ is the exact same level than where I sold the Put Spread, so I will leave this trade on for more upside potential.

UPDATE 3.22.2012 With Gold, Silver, and Oil all gettuing crushed, the Put Spread is now worth $.55, but I will leave this trade on as I think there will be Gold buyers coming into the market very soon.

UPDATE 4.9.2012 Another stock I am glad that I sold Put Spreads instead of Puts.  This spread will mostly expire worth $1, and the train moves on.  Will be sitting on the sidelines on the commodity based Longs for awhile.  

UPDATE 4.23.2012  I saved myself some money I worked out of the Spread when it was worth $.85, moving on to the next trade.