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Showing posts from June, 2007

Bearish on Zilog

Today MarketWatch wrote that Zilog Inc. (ZILG) cut its fiscal first-quarter sales outlook, saying it would be 11% to 13% lower than the fourth quarter's $19.1 million. Based on fiscal fourth-quarter results, the San Jose semiconductor company is expecting fiscal first-quarter sales in the range of $16.6 million to $17 million. The company also said it still expects to post a quarterly loss of 16 cents to 18 cents a share.

This will make it six quarters in a row that Zilog has lost money. And yet, as of earlier this month, it had tripled in value since its low point of about $2 back in March of 2006.

Founded in 1974, Zilog is a supplier of 8-bit microcontrollers. A microcontroller is a computer-on-a-chip that is optimized to control electronic devices such as motors, remote controllers and user interfaces on appliances and various other gadgets. Microcontrollers are essentially a small PC on a chip and typically include a central processing unit, different kinds of memory and various…

Training Video for SELL Signal Available

I would like to announce that there is another training video available. This one shows how you would go about generating a TradeRadar SELL signal.

Like our first training video for the BUY signal (click here to view that video now), this one is a WMV file that will play in Windows Media Player. Viewing both videos should prepare you to use the TradeRadar software and add a new tool to your technical stock analysis toolbox.

View the SELL signal training video now!

TradeRadar Training Video Available

I am pleased to announce that the first TradeRadar training video is available. Many of you have asked for guidance on how to use the TradeRadar software. I will admit, it is not intuitively obvious how it works.

This first video shows how to go about generating a BUY signal. SanDisk, an example from our model portfolio, is used.

The video is about three minutes long so, with a size of 4MB, it may take a minute or two to download. The video should be viewed in Windows Media Player, a version of which should be installed on all Windows-based PCs. I tried to find a balance between picture quality and file size. In any case, it is fairly easy to see what the training is trying to demonstrate. It will show all the steps needed to look for and assess a TradeRadar BUY signal.

View the video now!

Weekly Market Update - no follow through

Weekly Market CallAfter the markets finished the previous week on a very strong note, I expected to see some follow through that would lift the averages to new highs. Instead, the markets spent the first two days of the week meandering and then began their slide downward. By the time trading was done on Friday, the Dow and S&P 500 had lost 2%, the Russell 2000 had lost 1.6% and the NASDAQ had lost 1.4%.

The major catalyst this week was Bear Stearns and the problems with two of their hedge funds that had placed bad bets on sub-prime mortgages. Investors in the funds were about to auction off assets when Bear came through with a $3.2B loan to keep the funds afloat. The mood that swept the market was based on the fear that other funds holding heaps of securitized sub-prime debt might have to re-price their holdings as well. And that could lead to more fund failures or near-failures. Suddenly, it doesn't look like the sub-prime mess is so well-contained after all.

Another important …

Is it a Rally without the Financials?

Major averages ended Thursday with decent gains. Looking under the covers, however, we see a market struggling to move higher.

The Conference Board's index of leading indicators rose more than expected and the Philadelphia Fed's index of regional manufacturing jumped 14 points to a strong 18.0 and bonds sold off a bit, raising the yield on the 10-year note to 5.15%. This may not have had much effect on the overall market but it did seem to impact the interest rate sensitive sectors of the market.

The financials sold off strongly first thing in the morning. The Financial Select Sector SPDR (XLF) and the KBW Bank ETF (KBE) managed to just get back above the flat line by the end of the day. REITs, as represented by the iShares Dow US Real Estate ETF (IYR), sold off even more strongly and, despite a valiant effort, still ended the day on a down note.

Contrast that behavior with the action in technology stocks. The Technology Select Sector SPDR (XLF) and the Powershares QQQ Trust (QQ…

Yahoo and Google- get it over with!

I have written once before on how Yahoo was making some good moves in terms of phasing out unprofitable lines of business and increasing focus on core business functions.

Yesterday it was announced that Yahoo CEO Terry Semel had resigned and would be replaced with Yahoo founder Jerry Yang. Investors initially cheered this news but then concluded that Jerry Yang did not represent enough of a change. The stock ended today down 1.7%.

The bloggers and analysts are now speculating on potential directions for Yahoo. Mergers with or acquisitions by Time Warner, Microsoft and the other usual suspects have been mentioned.

My opinion is that Google should spend some of their billions and acquire Yahoo. The two companies are completely complementary. Google offers the dominant search and online advertising platforms on the web. Who needs Yahoo's Panama when you can sign up with Google?

Google realizes they need to augment their presence with more content; hence, the purchase of YouTube.…

Weekly Market Update - Inflation OK, Markets Pop

Weekly Market CallThis past week was filled with economic data that turned out to be mostly positive. Whereas the previous week saw a significant rise in interest rates and a corresponding drop in the market averages, this week saw reports of minimal inflation that caused rates to ease a bit. Nevertheless, it's been a wild week or two in the bond market. On Friday, the yield on the 10-year Treasury note fell to 5.15% from 5.22% on Thursday and a high of 5.31% reached on Tuesday.

Investors, who were beginning to fear the Fed might have to raise rates, came to the conclusion that the Goldilocks economy was still alive and bid up stocks aggressively. The PPI and CPI numbers that were announced on Thursday and Friday, respectively, showed that core rates were very close to the Fed comfort zone.

May retail sales also came in reasonably strong and supported the expectation that the economy continues to grow though at a rate that is below long-term trends.

The market call for the coming we…

More on Agnico-Eagle Mines

Since Agnico-Eagle Mines may not be well known in the US, I went looking for some analysis that might provide support for the TradeRadar BUY signal. The following is an excerpt from a Business Week article from June 7 titled "Canada's Resource Boom: Five Great Plays" where AEMLW is one of the five:


The weaker U.S. dollar, inflation concerns, and rising demand from the jewelry market out of India, China, and the Middle East with their growing economies have made gold a hot commodity lately. With mining production slipping from a peak in 2001 and more physical bullion being socked away in bank vaults as collateral for gold exchange-traded funds, the supply-demand imbalance has also favored higher prices.

Toronto-based Agnico-Eagle Mines Limited (AEMLW) has only one mine, in Quebec, currently producing gold. But it's poised to grow rapidly as it brings three additional mines in Quebec and projects in Mexico and Finland onstream in the next couple of years. The company ha…

Agnico-Eagle Mines - flashing the TradeRadar BUY signal

If anyone is interested in gold mining stocks, Agnico-Eagle Mines Limited (AEMLW) is flashing a TradeRadar BUY signal.

AGNICO-EAGLE MINES LTD. is a gold producing company and is involved in the acquisition, exploration and development of precious metal properties. The company's operations are located principally in Northwestern Quebec, with exploration and development activities in Quebec, Ontario, Mexico and Nevada, U.S.A.

I can't say that I have any expertise at all in analyzing gold mining stocks. In checking the charts of some stocks with potentially bullish options activity, I came across AEMLW and took a look at it using the TradeRadar software. Based on a time period starting in December, it gave a BUY signal just last week. Not the strongest signal but good enough to give the green light in the TradeRadar dashboard. You can see a pretty clear signal peak has formed in the bottom chart in the image below.



The stock trades on the Toronto Stock Exchange and the New York Stoc…

Mixed Picture on Real Estate in Fed Beige Book

Today's release of the Fed Beige Book lit a fire under the markets. The Beige Book painted a picture of an economy that was growing at a modest pace without suffering undue wage pressure or other inflationary impacts (except the usual jumps in food and energy prices).

The situation in the real estate sector was another story.

Residential construction is still in the doldrums. There were declines noted in new and existing home sales as well as falling prices and rising cancellations of new home sales. My expectation is that home builders are not yet out of the woods and ETFs like the SPDR S&P Homebuilders (XHB) will see more weakness in the near term. Today's results for XHB, however, were anything but weak as investors, caught up in the euphoria of an overall benign read on the economy from the Beige Book, bid up shares in defiance of common sense. Maybe they didn't read the paragraphs on residential real estate.

The commercial real estate sector appears to be gaining…

Video Stock Analysis added to Investor Toolbox

A quick note to let readers know that we now feature videos of stock analysis courtesy of 3StocksOnFire.com.

Their three most recent video analyses are provided on the TradeRadar Investor Toolbox page under the Stock Analysis heading. Check them out. There is a nice presentation of the chart situation and a discussion of their valuation model. A voice-over explanation is provided throughout so be sure your speakers are turned on.

Weekly Market Update - rate worries take center stage

Weekly Market CallIn last week's Market Update post I wrote that interest rate worries took the wind out of the sails of the market on Friday. This week, the trend continued and the markets sold off.

In the beginning of the week, the markets ignored an 8.3% decline in the Shanghai Composite index and set new records. The next three days saw declines as interest rates moved decisively over 5%, at one point hitting an intra-day day of 5.24%. Bill Gross of Pimco weighed in by declaring we are now in a bear market for bonds.

Fed chief Bernanke made it clear once again that inflation is uppermost on the Fed's mind and added that he expects tighter lending standards to continue to constrain housing demand.

Against this background, anything that confirmed economic growth was viewed as one more reason the Fed would not lower rates. A strong ISM Services Index was therefore viewed as bad. So-so retail sales could not undo the situation.

Around the world, there were more interest rate incr…

Thursday's Market Action: Rates rise, stocks don't

My two favorite bearish plays have had a good run the last few days. The ProShares UltraShort QQQ (QID) and the ProShares UltraShort Real Estate (SRS) ETFs have been the only glimmer of pleasure in the portfolio lately.

I posted over the weekend that I was struggling with the idea of hanging onto QID in the face of the latest set of new highs on the major averages. I am glad that I did. The precipitous drop in the NASDAQ bears out my fears that the current rally was over-extended. The rise in interest rates and the realization that a market supported by liquidity was vulnerable to rate increases took its toll the last few days. With QQQQ well below its 20-day moving average and close to its 50-day, the chart is looking weak.

As for SRS, it more or less tracks the iShares Dow Jones Real Estate Index (IYR). And, boy, does the IYR chart look bad! Rising rates are a killer for real estate, even REITs, and IYR is certainly taking it on the chin. Having fallen below a trend line a few wee…

Is Qualcomm decline a buying opportunity?

Qualcomm (QCOM) engages in the design, development, manufacture, and marketing of digital wireless telecommunications products and services based on its Code Division Multiple Access (CDMA) technology. It receives significant revenue streams through royalties as well as through manufacturing of chips used in wireless applications. Its products are in wide usage in North and parts of South America, Japan, India and Korea and are generally viewed as cutting edge.

A key competitor to CDMA is GSM, which is prevalent in Europe, parts of Asia, parts of South America and Canada. GSM is considered an older technology. It cannot provide the speed or capacity that CDMA-based technologies offer. GSM systems, by their very technical nature, will eventually approach bandwidth limits.

GSM carriers are moving to a standard called UMTS or Universal Mobile Telecommunications System. This standard is based on WCDMA. WCDMA is short for Wideband-CDMA, a high-speed 3G mobile wireless technology that can …

Introducing TradeRadar Live Market Monitor

Those who read this blog know that in addition to writing about the stock market I also dabble in writing software. I have been experimenting with web widgets lately and I have created a page to monitor the market action during the trading day. It's called the TradeRadar Stock Center - Live Market Monitor.

The page provides a configurable list of quotes that is updated every 30 seconds. There are four small charts that can each be set up to display an individual stock, ETF or index. The charts also update every 30 seconds. (Quotes and charts are courtesy of Yahoo!)

The Stock Market Update feed from Briefing.com is provided. This feed is updated every hour or half hour throughout the trading day. I have provided the feed with a refresh button so you can get the latest update without having to reload the whole web page and possibly lose what you have set up.

If you see something interesting happening on your charts or your quote list, analysis tools are provided so you can searc…

Property Prices a Barrier to More REIT Buyouts?

I recently wrote a post that discussed the potential for another round of buyouts in the REIT market. In that post, I came to the conclusion that there was a good chance we are now witnessing the beginnings of another burst of buyout activity.

There are indications, however, that we may be closer to the end of this cycle of buyouts than the beginning. The Wall Street Journal recently published an article that looked at property prices and how they are affecting dealmaking.

Commercial property, the kind that REITs typically invest in, used to be valued for the stream of payments that could be derived from rents over future years. The ability to raise rents or sell the property at a premium price was looked at as added, but uncertain, value.

Now, deals are being structured that assume both rents and property prices will rise significantly. Therefore, the prices for these deals are much higher than they would be otherwise. It now appears that property prices are reaching levels that ar…

Weekly Market Update - good news and rate worries

Weekly Market CallMarkets were determined to go higher this week. They shrugged off another sizable drop in Chinese stocks and embraced the non-event of the release of the Fed minutes from the last FOMC meeting. More merger news provided a continued underpinning for the bullish action and there was actually some pretty good economic news.

The core personal consumption expenditure (PCE) deflator was up just 0.1% for April. That was below an expected 0.2% increase and brought the year-over-year gain down to 2.0%. That is at the top of the Fed's forecast range of 1.75% to 2.0% for 2007 for the first time since the Fed stopped raising rates and indicates a moderation in inflation. May nonfarm payrolls were up a larger than expected 188,000 and indicated that growth in jobs will support consumer spending and a growing economy in general. Consumer confidence registered an uptick and the May ISM was up slightly and still registering positive growth. First quarter GDP was revised sh…