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Showing posts from May, 2007

TradeRadar version 1.3 released

A new version of TradeRadar is available. This is kind of a minor release that includes a few usability enhancements. For example:
Download button is located right on the main screen now to load data from Yahoo. No need to use File menu.Less clicks are required to get your data and get your chart up and running.Tool tips to remind you how to set Start and End points on the charts. Data loader automatically detects when you are updating weekly and monthly data. When refreshing the weekly or monthly data, TradeRadar automatically strips off the suffix, configures itself for the weekly or monthly data download and tacks the suffix back on when it is finished. This ensures you can distinguish between daily, weekly and monthly data when searching for a stock symbol in the Search drop-down.Help file has been improved and includes several new tips.
As always, a full install is provided as well as a simple upgrade. Get it on the TradeRadar Download page.

Merger fever returning to REITs?

The iShares Dow Jones Real Estate Index (IYR) jumped $2.48 today; that’s over a 3% one-day gain. The surge was inspired by the Archstone-Smith deal. The apartment investment firm agreed to be acquired by Tishman Speyer Properties and Lehman Brothers for $22.2 billion. Shares of Archstone-Smith jumped $55.55, to $60.78, in afternoon trading on Tuesday.

Is merger fever returning to the world of REITs?

Twenty-two REIT takeovers were announced last year in deals worth $103 billion, says SNL Financial. That's compared with 11 deals for $29 billion in 2005 and 8 worth $25 billion in 2004. In 2006 half the takeover bids were from other REITs or real estate companies, half from the private equity gang.

As for Archstone-Smith, analysts predicted the price could go higher if another bidder steps in or shareholders hold out for more. With all the liquidity out there, the private equity folks have not been shy about raising their offers.

At $22.2 billion, the deal is large, but it is not uni…

Weekly Market Update - down slightly, what's next?

Weekly Market CallThe week brought a mix of merger activity, reports on jobs, the state of the retail and housing markets, higher oil prices then lower oil prices.

We had Intel announce an agreement with STMicro to combine their flash memory production in a separate company. Coke is acquiring Energy Brands, also known as Glaceau. NASDAQ is buying OMX, the Nordic stock exchange operator. Hologic is buying Cytyc.

Retail earnings this week were not as dismal as in weeks past with some notable bright spots in Target and Aeropostale. There were also some notable disappointments with Saks, Gap, Lowes and Home Depot.

Wednesday we heard from former Fed Chairman Alan Greenspan who noted that he fears a "dramatic contraction" in the Chinese stock market. This is not exactly big news but it did take the wind out the market's sails.

Thursday durable-goods numbers and weekly jobless claims were announced. The number of U.S. workers filing new claims for unemployment last week increased…

Interesting action in IYR

We recently pointed out that the iShares Dow Jones US Real Estate ETF (IYR) had dropped out of a trading range and had the potential to fall further. Today we saw some follow-through on that call.

Today IYR ended up down $1.25 at $80.72. This was a 1.5% one-day loss. What was notable, however, was the intra-day price action. After being down as much as 2.7%, in the last half hour of trading IYR jumped up 1.2% from its low on relatively heavy volume. Without that spike, it might have closed below $80.

Tomorrow it will be interesting to see if the IYR bulls can build on the last minute positive action. Today's closing price of $80.72 is just below some recent resistance. We should get a test right away.

By the way, since I made the call that IYR was poised to fall, the ProShares UltraShort Real Estate ETF (SRS) has had its usual wild ride. If, the day after my post on IYR, you had bought SRS at the open (on May 17 at $83.50) you would now have gained a tidy 4.1% over the course of…

Intel and STMicro no threat to SanDisk

With SanDisk (SNDK) one of the recommended TradeRadar stock picks, I wanted to know what impact the recently announced agreement between Intel (INTC) and STMicroelectronics (STM) would have on SanDisk. Here's how it looks:

The agreement whereby Intel and STMicroelectronics will be combining their flash memory business shows how to tough it is to prosper in this industry. It continues the consolidation that began with Micron Technologies buying Lexar and SanDisk buying M-Systems. It also continues Intel's strategy of looking for synergies with partners, an approach that was demonstrated by their teaming up with Micron to push into the NAND flash market.

Currently, Intel and STMicro primarily manufacture NOR flash memory. NOR flash is often used in cell phones but that has started to change. Indeed, NOR flash memory has been largely superseded by NAND flash memory for the hottest consumer applications like MP3 players, digital cameras and PDAs. The fact that NOR usage is declin…

Google and Salesforce.com - smart move

Google moves to further dominate the new technology paradigms and leave Microsoft behind.

The platform is the Internet. SAAS, Software as a Service. These are among the newest buzz words in the corporate IT world. The proposed Google - Salesforce.com linkup brings together two of the top players in these segments and creates a whole that is greater than the parts.

Google has been making inroads slowly but surely with their Internet-based versions of the classic desktop tools like spreadsheets, calendars, email, instant messaging, word processing, etc. They clearly dominate Internet search and online advertising but also provide powerful facilities for specialized search that can be used on corporate web sites. They are also making their APIs open for developers to build applications around them. They are driving to make what has been a desktop toolset into a web-based toolset.

Salesforce.com specializes in customer relationship management (CRM) software provided online as a service…

Weekly Market Update - a mixed market

Weekly Market CallThe markets moved in a mixed fashion this week with the large caps (the Dow, the S&P) making yet another weekly gain and the small caps (the NASDAQ, the Russell 2000) falling a bit. Once again, the gains were driven by liquidity: merger and acquistion news continues unabated. Examples: Cerberus Capital Management is buying an 80% stake in Chrysler for $7.45 billion, Mylan Labs is buying Merck KGaA's generic drug unit for $6.6 billion, Bausch & Lomb is going private for $4.5 billion and Microsoft is buying aQuantive for $6 billion. Citigroup got a big pop when it was announced that hedge fund manager and Sears Holdings chairman Eddie Lampert had taken a large stake.

On the economic front, the reports were meager and did little to drive the market. CPI came in at expectations excluding food and energy. Food and energy are, of course, where the price increases are but as usual investors shrugged that off as too volatile to matter. New claims for unemployme…

TradeRadar Software Update to Version 1.2

A new version of the TradeRadar software is now available on the Download page.

New Features:
Top chart zooms in to display price action; no empty space below higher priced stocks. Prices will no longer be squeezed into the uppermost portion of the chart. You'll be able to clearly see price patterns and relate them to the TradeRadar signal in the lower chart.The SELL zone marker has been adjusted a bit higher to give quicker SELL signals.The dashboard indicator for Kurtosis takes the time period into account. When there are less than 12 months being analyzed, a good Kurtosis reading will be indicated more accurately.A small bug when choosing the last data element in a time period has been corrected.When importing data, hitting the Enter key has the same effect as clicking the OK button.
TradeRadarWeb has also been updated. All the enhancements listed above have also been implemented in the online version of TradeRadar. Try it out.

As always, both a full install and an upgrade are a…

Watching NASDAQ with interest

Having made the determination that the NASDAQ was heading for a fall, I watched today's action in the Powershares QQQ Trust ETF (QQQQ) with interest. Initially, QQQQ was somewhat weak but then we got a good bounce up. Checking the charts, however, I see that we have a lower low and a lower high.

Much of today's action was the result of billionaires buying Dow companies (Bausch & Lomb) or buying stakes in Dow companies (Citi, Union Pacific, Norfolk Southern). I can see that kind of activity pushing up the Dow but it doesn't especially do much for NASDAQ listed companies.

To me, it still looks like the Q is making a top.

Look out below - iShares REIT ETF drops today

The iShares Dow US Real Estate ETF (IYR) just fell out of a trading range today. Looking at the chart below, you can also see it happened on a pickup in volume.



I have written previous posts on how the problems in subprime mortgages were not really affecting the commercial side of the real estate market and, indeed, real estate investment trusts have held their value much better than the home builders. Unfortunately, the continued dismal news from the housing sector lately must finally be taking its toll on the REIT sector, too. With the value of real estate falling in some markets, perhaps rental properties and condos are not the attractive investments many REITs originally thought they were. With reports of retail sales down, building or owning malls may not be as lucrative as it once was either.

I have mentioned before that there is an inverse ETF that more or less tracks IYR. It is the ProShares UltraShort Real Estate fund (SRS). You may want to check it out. IYR will probabl…

Why I think the NASDAQ is in trouble

I wanted to write a small post to describe what steps I took that led me to believe it was time to bail out of QLD, the ProShares Ultra QQQ ETF, and jump into QID, the ProShares UltraShort QQQ ETF.

First, general intuition came into play. I was not alone in feeling that the markets were over-bought. There was plenty of discussion on this topic in the financial press and on financial web sites and blogs. The economic news continues to be somewhat downbeat so the current healthy earnings season and rising stock prices came as somewhat of a surprise. This lack of correlation between the economy and stock prices sounded a cautionary note.

Checking the StockConsultant.com site, which is one of the tools provided on the TradeRadar blog, my overbought assumption seemed to be reinforced. The site showed QQQQ, for example, to be at the top of their proprietary RallyBand and the reversion to the filtered trend or down to the bottom of the RallyBand seemed to be the most likely next move. In…

Yahoo management makes the right moves

Yahoo (YHOO) could be a buy now. Many analysts disagree but I think there are reasons to expect better days ahead for the Internet giant.

Remember the "Peanut Butter Manifesto"? Back in November, a staffer at Yahoo wrote a blistering missive criticizing the scattershot strategy in place at that time.

Since then Yahoo has released Panama, their update to their advertising engine.

They've released earnings that disappointed the Street (an 11% drop in profits in Q1) and seen their share price drop accordingly.

They've been at the center of rumors about being in talks to be bought out by Microsoft and seen their share price spike up though most analysts think there is little chance of this actually happening.

Now they are announcing the closing of marginal business segments. The latest victims are their photo-sharing site and auction site.

The photo site is being replaced by Flickr, an astute purchase by Yahoo back in 2005 that has since become ubiquitous on the web.

Yahoo ha…

Weekly Market Update - Momentum Slows

Weekly Market CallThis week the markets appeared to take a breather. It's been a while since we didn't post a sizable weekly gain in every major index. Indeed, the NASDAQ and the Russell 2000 finished slightly lower and the other averages barely managed fractional percentage gains.

Wednesday, the Fed held rates steady, as expected, and their policy statement pretty much had nothing new to say.

Thursday saw a big sell-off, mostly due to poor same-store sales reports from a group of major retailers. This threw confidence in consumer spending into doubt and most averages lost about 1.4% on the day. Adding to the negative tone, a larger than expected trade deficit was reported, driven in large part by rising oil prices.

Friday saw a bounce (as most analysts expected) when the Labor Dept. announced that producer prices eased in April. The core rate was unchanged again, pushing the year over year rate to 1.5% and giving investors hope that inflation will be trending lower. This was,…

Flipped from Bull to Bear today

Like many other investors, I have been enjoying the recent run-up in equity markets but have worried that it has been a bit overdone. It seems that every piece of news, good or bad, resulted in the market advancing. This is something that can't go on forever.

This afternoon, with QQQQ down about 1%, I pulled the trigger and sold the ProShares Ultra QQQ ETF (QLD) and bought the ProShares UltraShort QQQ (QID) again.

QLD was sold at $90.28 for a 2.7% gain over the course of under three weeks.

QID was bought at $48.39 and ended the day at $48.53 for a 0.4% gain.

If the mood of the market is going to change now that the enthusiasm of earnings season is over, bad news will be interpreted as bad news, not ignored. For a list of all the things wrong with the market these days, check out this post by Doug Kass.

Cisco - Earnings Commentary

Cisco reported after the close yesterday. Though earnings were up 34%, guidance was not to Wall Street's liking.

Did Cisco guide downward for the next quarter? No, not really. They reduced the lower limit of expected revenue.

Did they say growth would be poor across the board? No, they said large corporate customers in the US were showing sluggish demand and that growth in that segment would be reduced from 20% to mid-single digits. That sounds bad until you realize that's only about 13% of Cisco's business.

Sales to large enterprise customers in international markets is still expected to grow strongly and in consumer markets, growth has been in double digits and is expected to continue at that rate. Cisco now gets more than half of it's sales outside the US and thus is less dependent on the domestic market.

So should we rush to sell Cisco shares after today's gap down? They were down 6.5% today and will probably weaken further over the course of the next week or…

Weekly Market Update - bulls prevail (again)

Weekly Market CallIn general, company news and economic news were all pretty positive this week. Plenty more earnings were announced and it now appears as if earnings growth for the first quarter will come in around 8.5%, a revision upward.

On the economic front, we had a flat reading on core personal consumption expenditures for March. This is one of the Fed's favorite measures of inflation. The year-over-year increase dropped to 2.1% which, for a change, is within the Fed's 2007 forecast of 2% to 2.25%. We also had better than expected readings on the ISM surveys for both manufacturing and services and an uptick in March factory orders. More important was the 88,000 increase in April nonfarm payrolls that gives a more direct indication that growth continues and the consumer is safe to keep spending.

Merger activity did its part to keep the markets happy. We had news of Microsoft making a play for Google, News Corp. offering a huge premium for Dow Jones and Cablevision loo…