the Trade-Radar + TradingStockAlerts blog

It is well publicized that the financial industry is undergoing cataclysmic changes in terms of survival of companies, industry leadership, etc. Is there is another industry that is undergoing a similar transformation? iSuppli , the market research firm, thinks so. They recently released a report indicating that major changes have been taking place in the semiconductor industry. Granted that the changes have been quieter and less dramatic. Margins decrease -- They begin by saying that over time semiconductor industry profitably has shrunk. They point to a downtrend in margins and provide the following graph: The surprising quote from the article, written byDerek Lidow, president and chief executive officer of iSuppli, is as follows: "The semiconductor industry now is less profitable as a percentage of revenue than the notoriously low-margin PC business... the long-term trend indicates that the semiconductor industry—which historically has been good at capturing profits in the el...

The ProShares UltraShort Financial ETF (SKF) had a big day today as the market plunged. The ETF didn't do a bad job of tracking the double inverse of its underlying index, the Dow Jones U.S. Financials Index. It is appropriate to contrast the performance of SKF with the performance of IYF, the iShares Financial ETF which also uses the DJ Financials index as its underlying. Today IYF fell more than 9% and SKF gained less than 19%. The two ETFs seemed to track each other pretty well. Short selling ban having an effect? As you may know, when the SEC instituted the ban on short sales of financial stocks on September 18, ProShares made a decision to stop creating new shares of SKF. The company explained it on their web site as follows: "...we thought there was the potential for extraordinary demand to create new shares of these ETFs. We were concerned there might be limitations in getting sufficient short investment exposure to cover any new shares of SKF or SEF. So we decided it w...

The hits just keep coming. This has been yet another week of wild action in the markets. This week's financial victim was Washington Mutual. It's getting so that we don't even flinch any more when titans of the industry collapse. Congress also did its part to keep investors on edge, managing to disagree amongst themselves as well as with the administration. Markets attempted to rally in the latter part of the week as it seemed that the dissolution of WaMu was handled in an orderly manner and the politicians began to seek points of consensus. Still, it was too little too late with all the major averages declining significantly: a 2.2% loss on the Dow, a 3.3% loss on the S&P 500 and big 6.5% declines on both the S&P Midcap 400 and the Russell 2000. With respect to fundamentals, there were terrible numbers related to home sales, durable goods and jobless claims. Even as it looks like the bank bailout may allow us to dodge a bullet in the credit markets, it appears that...

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ . Each week we scan over 7200 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify those stocks undergoing reversals, either to the upside or to the downside. Well, Congress didn't get the bailout plan passed but the president assures us it will pass eventually. Another "mission accomplished"? We shall see. In any case, the uncertainty surrounding the bailout, compounded by terrible numbers related to home sales, durable goods and jobless claims served to push the markets down again. Losses on the week for the major averages ranged from 2.2% on the Dow to a whopping 6.5% on both the S&P Midcap 400 and Russell 2000. Damage to our Alert HQ technical indicators continues. Against this backdrop, we see SELL signals o...

There were two interesting news items about Yahoo! today and I thought I'd pass them on and provide my opinion. Talks with Time Warner? The Yahoo! board has reportedly approved moving forward with talks with Time Warner (TWX) to buy AOL. This is certainly good for Time Warner. AOL is a premier web property but, much like Yahoo!, its potential seems to remain unfulfilled. It is unlikely Time Warner can unload the Internet access business on Yahoo! so that millstone will remain around CEO Jeff Bewkes neck for the time being. The more interesting question is whether Time Warner would be willing to sell Platform-A, their online advertising network. This is also unlikely as that division is one of the largest ad networks on the web and is profitable as well. My fear is that the new board will drive Yahoo! into a bad deal. AOL is a virtual duplicate of Yahoo! only, in my opinion, not quite as good and not quite as deep in terms of what it offers. What possible benefit would Yahoo! derive...

I recently wrote a post (" Who benefits from new short selling rules? ") discussing the impact of the new rules that ban "naked" shorting. My position was that this would probably increase the trading volume in the ProShares ultra short ETFs. Since then we have seen the imposition of yet another rule. In an attempt to protect financial stocks, the SEC has prohibited short sales of shares of certain financial companies. The list of protected financial companies has now expanded to over 900. While many of the ProShares ultra short ETFs continued to trade in a manner that is decently tracking the action in the underlying index they are shorting, the Ultra Short Financial ETF (SKF) ran into huge problems. After getting hammered on Thursday and Friday of last week, SKF barely opened on Monday. It was almost noon before it started trading in earnest. Remember, Monday was the day when the well-known Financial Select Sector SPDR ETF (XLF) fell over 8%. SKF should have jumpe...

The men who hold high places must be the ones to start, to mold a new reality, closer to the heart. - Rush, Closer To The Heart And so Reality now sets in... Markets rallied last week on the announcement the Treasury and the Fed had developed a plan address the problems at U.S. financial institutions. Now, the reality of how things are done in Washington takes over and the momentum is bound to slow. If there was complete agreement on the Paulson plan, perhaps we could be hopeful for a quick adoption of the legislation required to put it into law. As we see below, there may be agreement on the broad necessity of doing something but there is anything but agreement on the details. We will look at the major groups of protagonists and list the issues that will be points of contention. By our count there are 16 issues that will have to be resolved before the plan becomes law. The legislators -- The Wall Street Journal reports that legislators are working to put their own stamps on the rescue...