Online Trading

Sorry for the lack of posts, new post in a few days

2005-09-13T05:50:00.000-04:00

Sorry for the lack of posts lately. I had an accident and I was hospitalized for some time, but I am recovering now, so I'll resume posting in a few days.

CNBC's raging bull

2005-09-01T16:05:00.000-04:00

An article about Jim Cramer's Mad Money (thanks to TraderMike for the link).

CNBC's raging bull
calendarlive.com
By Matea Gold, Times Staff Writer
August 29, 2005

ENGLEWOOD CLIFFS, N.J. — Stumble across Jim Cramer's show on CNBC and you may think you've come upon a music video featuring a balding, manic businessman.

It's "Mad Money With Jim Cramer," the former hedge fund manager's high-octane hourlong take on the world of stocks.

His fans track his advice with cult-like devotion, jumping to place orders for stocks as soon as he mentions them. Professional day traders have taken notice as well.

The result is a Wall Street phenomenon now known as the "Cramer effect:" The day after a stock gets a mention on "Mad Money," its price shoots up, at least temporarily, and its trading volume soars.

"It's amazing," said Damon Southward, manager of trader content on Briefing.com, an investor news service that began reporting Cramer's picks to subscribers a few months ago. "You see stocks that literally trade several times their average volume in reaction to Cramer."

Read further:
calendarlive.com: CNBC's raging bull

Today's Data

2005-09-01T08:32:00.000-04:00

Personal Income +0.3% vs ~~+1.0%~~ +0.5% (Briefing.com correction) consensus
Personal Spending +1.0% vs +1.0% consensus
Initial Claims 320K vs 315K consensus
Source: Briefing.com

Trading Through Katrina

2005-08-31T12:56:00.000-04:00

Trading Through Katrina
TheStreet.com
By Alan Farley
RealMoney.com Contributor
8/31/2005 8:55 AM EDT

"Hurricane Monday" gave traders their most volatile session since the London bombing in early July. Going into the morning, I started a diary to illustrate how I measured the risks and opportunities triggered by the event. This exercise will show you my thought processes when a quiet Monday gets turned upside down by bad news.

7:14 a.m. EDT: I'm at my trading screen. Katrina is down in size overnight. My weather graphics show the eye headed straight toward New Orleans. Crude oil opened Sunday near $71 and dropped off to $70 immediately, It's now hovering about 50 cents below this "round number" as traders gauge the storm's impact to the supply chain.

...

9:44 a.m. EDT: Halliburton (HAL:NYSE - commentary - research - Cramer's Take) is showing the biggest jump (up almost 4%) of all the energy stocks I'm watching. That's makes sense. Globex futures are trying to fill the opening gap. This isn't the right time for a big reversal, so I'm looking for renewed selling pressure once the market shakes out the short-sellers.

Read further:
TheStreet.com: Trading Through Katrina

Microsoft plans telephone service

2005-08-31T09:19:00.000-04:00

Microsoft plans telephone service
BBC
August 31, 2005

Microsoft is preparing to enable computer users to make a normal phone call from their PC.

The computer giant has increased its presence in the fast-growing internet phone sector by purchasing leading player Teleo for an undisclosed sum.

Yahoo is also in the process of introducing such a system, after it bought internet phone company Dialpad two months ago.

I am sure that Google is also planning to include PC-to-phone calls to their Talk program in the near future.

Read further:
BBC: Microsoft plans telephone service

See also:
Talking about Google Talk and Skype

Talim, Forecast to Become a Supertyphoon, Heads Toward Taiwan

2005-08-30T16:20:00.000-04:00

Do we see another spike in stocks that tend to jump on typhoons, hurricanes etc when the typhoon reaches Taiwan?

Talim, Forecast to Become a Supertyphoon, Heads Toward Taiwan
Bloomberg
August 30, 2005

Aug. 30 (Bloomberg) -- Typhoon Talim is strengthening and may become a supertyphoon as it moves across the Pacific Ocean in the general direction of the northern coast of Taiwan, according to the U.S. Joint Typhoon Warning Center's Web site.

Winds are expected to strengthen to 250 kph later today with gusts as high as 304 kph, the center said. That would make Talim, which means sharp, or cutting edge, in Tagalog, the language of the Philippines, a Category 5 storm under the Saffir-Simpson scale, or a supertyphoon under Pacific rankings.

Read further:
Bloomberg: Talim, Forecast to Become a Supertyphoon, Heads Toward Taiwan

See also:
Today: Katrina and Oil

Comparing the Two Indian Internet Stocks REDF and SIFY

2005-08-30T14:22:00.000-04:00

The Internet Stock Blog writes:

Look at this chart, and ask yourself why there’s such divergence in performance between these stocks [follow the link below to see the chart]...

Some (mutually exclusive) possibilities:

The REDF chart suggests that the stock has run up on sudden momentum, not fundamentals. In the longer run, the two stocks track each other relatively well.

REDF suddenly outperformed SIFY because REDF turned profitable in Q2, whereas SIFY is still losing money (including on a cash-flow basis)

REDF is a fundamentally better business than SIFY. Its revenue growth in the latest quarter was 53% in Q2, verus 31% for SIFY. More important, the Internet content business (REDF is a portal) should have far higher margins and operating leverage than SIFY’s corporate and retail Internet access business.

Final quick thought: If SIFY controls a large network of Internet cafes, can’t it make its own portal and services the default on the PC its customers use?

Read further:
The Internet Stock Blog: Comparing the Two Indian Internet Stocks REDF and SIFY

Stocks to Watch: ATYT

2005-08-29T16:17:00.000-04:00

ATI Technologies (ATYT) was halted just a little ago. News pending.

Update (August 29, 2005 4:26 PM):
ATI Tech lowers Q4 revenue guidance.

Update (August 29, 2005 4:34 PM):
ATYT revenue guidance for Q4: $465-480M, compared to the expected range of $550-580M provided earlier; Reuters cosensus $559M.
Despite ATYT is already at low historical levels, it will still gap down after the stock is opened for trading.

Update (August 29, 2005 4:55 PM):
ATYT down by 12%. Ouch.

Today: Katrina and Oil

2005-08-29T09:04:00.000-04:00

Today, Hurricane-related stocks in motion, see Briefing.com note below. High crude oil price is also affecting stock market.

Briefing.com:

09:03

Gapping Up

Hurricane-related stock moving higher on Katrina hitting New Orleans: ABIX +26%, TAYD +15%, IPII +13%.... Small cap energy plays running on Katrina: BDCO +15%, NGAS +13%, FUEL +13%, ABLE +9.4%, CNR +9.3%, ROYL +8%, IVAN +8%, GW +6%, Large cap energy also moving: SU +7%, SII +7%, CHK +4.6%, PTF +4%, VLO +3.3%, BP +3.1%, HAL +3%, FRO +3%, COP +2.6%... Alternative energy/fuel cell stocks also moving in part on Katrina: CPST +15% (also First Albany upgrade; tgt $6), MCEL +13% (also awarded Phase II funding), ENER +3.5%... Other News: NXXI +49% (FDA approves claim), NDC +7.3% (to be acquired by PSTI), MUSE +6% (Deutsche upgrade; $9 tgt), JOYG +3% (to join S&P 400), HD +2.6% (hurricane), LOW +2% (same), BMHC +2.7% (same).

The Power of Margins

2005-08-28T13:18:00.000-04:00

The Power of Margins
by David Meier (TMF HumbleServant)
August 17, 2005

If you want an edge in investing, you have to be able to think beyond the usual.

Traditionally, margins represent the efficiency by which companies capture portions of sales dollars. As an analyst, I find myself looking at small changes in margins and wondering what is going on. But that focus is too narrow. Margins can provide much more information.

Margins are important. But how you use margin information is more important to your investing success. So don't stay on the surface when analyzing margins. Your portfolio will thank you for it later.

Read further:
Fool.com: The Power of Margins

Swing Trading vs. Scalping: The Pros And Cons

2005-08-25T17:39:00.000-04:00

Swing Trading vs. Scalping: The Pros And Cons
By TradingMarkets Research
Wednesday August 24, 11:21 am ET

The smaller a timeframe chart, the more random price action appears to be. The further one dials out a view to larger charts, the clearer price action movement becomes. That is fundamentally true because the action slows down. It is easier to hit a slow-pitch softball than major league fastball. Right or right? Get real good at hitting a major league fastball (along with a few other skills) and profit potential there is enormous. But how many new baseball players are truly able to do that?

Scalp trading successfully requires THE GREATEST degree of focus on charts, speed of decision making, personal discipline, everything that is necessary for success.

Read further:
Yahoo! Finance: Swing Trading vs. Scalping: The Pros And Cons

See also:
My Trading Room: Link about Scalping Vs. Swing Trading

Update: Stocks to Watch: BCON

2005-08-24T09:53:00.000-04:00

BCON is making another amazing trading day, currently at $5.26 (+10.97%), yesterday's high is at $5.10.

See also:
Stocks to Watch: BCON

Stocks to Watch: BIDU

2005-08-24T09:44:00.000-04:00

Baidu is finally fading. If it doesn't show any strength later today, there's a big possibility that Baidu shares are heading to major falloff.

BIDU is trading at 76.34 (-6.9%).

News about Baidu in Briefing.com:

Baidu forecasts a slowdown in revenue growth -- FT

Baidu.com, China's leading internet search company, expects revenues to rise by between 11 and 16 per cent in the third quarter compared with the previous three months, a marked slowing in the new Nasdaq star's sequential sales growth. The revenues mainly come from the sale of advertising links that appear alongside its website's search results, a model that emulates that of global search giant Google.

However, questions have been raised about the sustainability of its "MP3" online music search service, which accounts for more than 20 per cent of traffic to the site but which has been targeted by music publishers for allegedly promoting piracy.

Talking about Google Talk and Skype

2005-08-24T08:50:00.000-04:00

Google is widening its scope again, a few days ago it presented a desktop sidebar, now it announced a brand new instant messenger – Google Talk. They have also included the possibility to take voice calls.

Google Talk is really bad news for Skype. Although, Google Talk does not have the features that make money for Skye (i.e. Skype out), it is just a matter of time when these services are included also in Talk. Yes, Skype has some edge, they were the first in the market, but Google has enormous amount of money. And Google has "Google". That's why Google Talk will probably get more downloads in the first day than some other applications during their lifetime.

If Rupert Murdoch's $3 billion offer for Skype was not a rumour, I think Skype's venture capitalists lost their best opportunity to sell it.

See also:
Subzero Blue: Google Talk
Ambot ah!: Google Talk, the next best IM?
Connected Internet News: New Google Desktop - I'm not impressed
kottge.org: GoogleOS? YahooOS? MozillaOS? WebOS?

Coverage of $3 billion offer for Skype:
Asia Business Consulting: News Corp wants Skype - and what is their intention?
loose wire: Was the News Corp Offer for Skype Real?
Good Morning Silicon Valley: Fine, I'll just set aside the $3 billion for the bloody toll calls to Lachlan

Stocks to Watch: WES, WFSI

2005-08-23T15:00:00.000-04:00

Both, WES and WFSI are currently halted.

Briefing.com:

Westcorp confirms discussions regarding combination (63.30 +5.95)

Co confirms that it was in discussions regarding a possible business combination. Westcorp indicated that absolutely no determination has been made as to whether any business combination would be in the best interests of Westcorp's shareholders. As previously reported, the approval process for the conversion of Western Financial Bank to a California state commercial bank and the merger of WFS Financial into Western Financial Bank as a part of the acquisition of the minority interest in WFS Financial is taking longer than originally expected, and the co has been exploring other alternatives. Any such business combination would be an alternative transaction to the pending merger and related charter conversion, originally announced in Westcorp's May 24, 2004 press release. (Both WES and WFSI are halted.)

NYT on Providian Financial (PVN) Acquisition

2005-08-23T14:44:00.000-04:00

And They Call This Advice?
The New York Times
Gretchen Morgenson
Published: August 21, 2005

WILL shareholders of the Providian Financial Corporation, one of the nation's biggest credit card issuers, approve their company's merger with Washington Mutual?

Owners of Providian will vote on the proposed deal on Aug. 31. Under its terms, they will receive just under $19 a share in cash and Washington Mutual stock. That price represents a modest premium of 4.2 percent over the price of Providian just before the merger announcement.

David L. King, a portfolio manager at Putnam Investments, has said he will vote against the merger. The funds own 7.5 percent of Providian's shares. Officials at Providian have said that the deal is fair.

In its report, Glass Lewis said it believed that Providian was worth $21 to $24 a share. It said the company's business was performing well and could easily remain independent.

Providian Financial Corporation (PVN) is currently trading at $18.74, slightly below the possible take-over price.

Read further:
The New York Times: And They Call This Advice? (free subscription required)

It's a stock pickers market

2005-08-23T12:34:00.000-04:00

Jack Rothstein writes in his blog that the index funds are not performing well and it's a stock pickers market.

Cash rich in managed accounts this being the season of weakness. The shorts balance the longs in the fund. Selectivity is the key to success. It is a stock pickers market. You have little chance of index funds delivering a satisfying performance. The major market averages are flat to down for the year. It’s a flat market. Performing in a flat market requires the ability to pick stocks in a timely manner. Pick and clip advancing and declining stocks in a timely manner.

He highlights some long and short candidates and gives a comment for each (BCR, BEAV, GE, ISIL).

Read further:
Jack Rothstein: Longs & Shorts, Always

See also:
Saying Goodbye to Buy-and-Hold

Today's Earnings: WPTE

2005-08-22T16:05:00.000-04:00

WPTE crashes with earnings report:

Reports Q2 (Jun) loss of $0.02 per share, $0.06 worse than the Reuters Estimates consensus of $0.04. Revenues rose to $6.6 mln vs the $5.9 mln consensus. Overall gross margins were 33.7% in Q2 compared to 43.9% from prior year period. Co issues downside guidance for Q3, sees Q3 revs of $1.5-2.0 mln vs. $4.82 mln consensus. (Briefing.com)

WPTE currently halted.

ERES Insider Buying, Shares Up

2005-08-22T15:12:00.000-04:00

Insider buying in Eresearch Technology (ERES), Blum Capital Partners LP has bought a lot of ERES shares lately, see insider transactions at Form4Oracle.

ERES running up 5% today.

See also:
Roberto's NasdaqTrader: ERES Insider Buying

If the Contrarians Are at the Gate, They May Just Be Lost

2005-08-22T14:37:00.000-04:00

There is some reading about VIX in The New York Times:

If the Contrarians Are at the Gate, They May Just Be Lost
The New York Times
By Mark Hulbert
Published: August 21, 2005

The VIX currently stands at 13.42, which is lower than about 79 percent of the index's past readings. Its historical range extends from a low of 9.31 in December 1993, to a high of 45.74 in October 1998.

The exchange refers to the VIX as an "investor fear gauge," and the index quickly found a following among a group of market timers known as contrarians. They believe that the stock market rarely moves in the direction that the majority expects; therefore, they are bullish for the overall market when the VIX is high and indicating widespread investor fear. By the same token, they are bearish when, like today, the VIX is low and betraying investor complacency.

Researchers, however, have been able to find only partial historical support at best for this interpretation of the VIX. According to a recent Hulbert Financial Digest study, the stock market has indeed tended to turn in an above-average performance following very high VIX readings - just as contrarians say. But contrary to what contrarians believe, the stock market has also produced above-average returns following very low readings.

Read further:
The New York Times: If the Contrarians Are at the Gate, They May Just Be Lost

See also:
Raising Volatility
VIX conundrum
Low Market Volatility

Day Trader's Thoughts on Day Trading

2005-08-22T10:23:00.000-04:00

Trader Mike writes about his switch from swing trading to day trading. There are some good practical issues to memorize.

Mike writes about switching his commission structure at his broker and gives even a slight insight into his trading tactics. He also doesn't afraid to mention his win/loss ratio, which is 45.05% at the moment, but still making money (actually, it shouldn't be a surprise to anyone that it is possible to make money even if with a win/loss ratio below 50%, like it is possible to lose money with a ratio above 50%).

Read further:
Trader Mike: Thoughts on Day Trading

NYSE Short Intrest At Record Highs

2005-08-22T10:13:00.000-04:00

Roberto's NasdaqTrader:

Short interest on the New York Stock Exchange rose 2.7 percent to a new record high in August, signaling bearish sentiment, according to information the exchange released on Friday. As of Aug. 15, the number of short-selling positions not yet closed out rose to 8.59 billion shares, up from 8.36 billion a month earlier.

Notes about Trade-Ideas

2005-08-19T04:32:00.000-04:00

I added Trade-Ideas container on the left sidebar, it brings you real time market alerts. There is some positive feedback on Trade-Ideas, so I wanted to try it out myself.

If you have tried it, please share your thoughts with others.

See also:
Trader Mike: Watchlist for August 16, 2005 (comments about Trade-Ideas)
My Trading Room: Trade-Ideas
My Trading Room: Prime Trading Setup:Intraday Example

Update: Interview: Jim Rogers, co-founder of Quantum Fund

2005-08-18T16:02:00.000-04:00

Two months ago I posted a link to an interview with Jim Roger's. Now, there's another interview taken place with him (I saw the links on Random Roger's blog) by Investment U.

Investment U: Should there be a hard landing in China, do you anticipate a major consolidation in commodities?

Jim Rogers: Yes, I do. Something’s going to cause consolidations in commodities. We always have consolidations in every bull market in history.

Again, I wish I were smart enough to tell you exactly what’s going to cause them, and the timing, but I’m not. It’s pretty obvious to me that if we suddenly see headlines in the Wall Street Journal of some kind of turmoil in China, that commodities would be having a correction, or would go into a correction. But that would be a chance to BUY commodities.

You know, in the ‘80s and ‘90s, we had some huge corrections in stocks.

Likewise, in ‘94 or any of the other corrections along the way in the bull market in stocks in the 1980s and ‘90s, you made a lot of money. So if you see those headlines, I urge you to buy all the commodities you can. Probably buy all the China you can, too; but certainly, buy all the commodities you can, too.

Investment U: Commodities seem so simple on that level - supply and demand... How does investing in commodities compare with stock investing in terms of the average investor?

Jim Rogers: It couldn't get any simpler. And if you start looking into commodities, you'll see that commodities are a lot simpler and easier to analyze than stocks.

For instance, natural gas is pretty dumb stuff. If there's too much gas, it's going to go down. If there's too little, it's going to go up.

Natural gas doesn't know who Alan Greenspan is, or care; it just cares about supply-and-demand. And once you've made that analysis, it's a lot easier to buy and sell natural gas than to start analyzing 300 natural gas companies around the world, where you have to worry about management and balance sheets and stock markets and unions and environmentalists and dozens of other things.

Investment U: And you believe commodities can be less risky than stocks, too?

Jim Rogers: Well, Enron was a natural gas company. Enron went to zero. Natural gas can never go to zero. It can go down, obviously, but it can never go to zero.

Read further:
Investment U: Jim Rogers on China's Currency Revaluation (Part 1)
Investment U: Jim Rogers: Hot on Commodities (Part 2)

See also:
Interview: Jim Rogers, co-founder of Quantum Fund

Google plans to sell $4 billion of stock

2005-08-18T07:50:00.000-04:00

The most important news for today:
Google files to sell 14.2 million shares. GOOG is trading at 276.11 (-3.15%) in pre-market.

AP (Yahoo! Finance):
MOUNTAIN VIEW, Calif. (AP) -- Google Inc. said Thursday it has filed with the Securities and Exchange Commission for a proposed public offering of 14.2 million class A common shares.

Google shares, which have tripled since going public one year ago, closed Wednesday at $285.10 on the Nasdaq Stock Market, giving the offering an estimated value of $4 billion at that share price.

Read further:
Reuters (Yahoo! Finance): Google plans to sell $4 billion of stock
AP (Yahoo! Finance): Google Files to Sell 14.2 Million Shares