Trading Blog

The Markets This Week  January 14, 2018 - 11:37am

The SPY has blown through any resistance levels I can put on the chart whether it be the daily or weekly. The QQQ have pushed daily chart resistance but show there is still room to go to 169 on the weekly and the IWM has just gotten started moving on the daily chart and has room to 162. The charts and logic say that the indexes need to take a break at sometime but there are no signals of that happening at the moment. The best thing to do here is just go with it and keep trading long until that signal presents itself.

Facebook (FB)  January 14, 2018 - 11:26am

Facebook is making major changes to its News Feed, prioritizing personal posts from family and friends over videos and posts from businesses and news media, co-founder and Chief Executive Mark Zuckerberg announced late Thursday. In a blog post, Zuckerberg said the sweeping changes are being made to “encourage meaningful interactions between people,” even as he acknowledged it may hurt the company’s bottom line. “As we roll this out, you’ll see less public content like posts from businesses, brands, and media,” Zuckerberg wrote. “By making these changes, I expect the time people spend on Facebook and some measures of engagement will go down. But I also expect the time you do spend on Facebook will be more valuable.” Users were finding that business and media posts were “crowding out the personal moments that lead us to connect more with each other,” Zuckerberg said. He added that academic studies and internal research found that feeling “more connected and less lonely . . . correlates with long term measures of happiness and health.” Watch the recent low of 174.67.

JPMorgan Chase & Co. (JPM)  January 14, 2018 - 11:21am

JPMorgan Chase & Co. said Friday that fourth-quarter profit fell 37% as one-time charges from the new tax law cut into profit at the nation's biggest bank by assets. Shares ended up 1.65% Friday after the report. The bank reported a profit of $4.23 billion, or $1.07 a share. Excluding estimated costs of $2.4 billion from the tax law, and other items, earnings were $6.7 billion, or $1.76 a share. Analysts polled by Thomson Reuters had expected earnings of $1.69 a share. On a reported basis, or under generally accepted accounting principles, earnings per share were expected at $1.16, reflecting the tax-law charges. JPMorgan, run by Chief Executive James Dimon, is one of a trio of big banks kicking off fourth-quarter earnings season for U.S. financial institutions. Together, the firms -- which include Wells Fargo & Co. and PNC Financial Services Group Inc. -- offer investors a snapshot of a quarter that analysts were expecting to be characterized by a slight pickup in loan growth and continued trading headwinds. There is still room to 116 on this move.

Kohl’s Corp.(KSS)  January 14, 2018 - 11:15am

Kohl’s Corp. shares were up 4.5% in Friday trading after the retailer was upgraded at both RBC Capital Markets and J.P. Morgan as both firms become more bullish about growth prospects in the wake of a strong holiday season. RBC analysts led by Brian Tunick say much has changed since it launched on Kohl’s in May 2016 with an underperform rating. At that time, its growth initiatives were in early stages, and many of the steps it planned to take had been done by the competition years prior. Kohl’s also looked like it might be hit with an onslaught from both the off-price sector and Amazon.com Inc. But 6.9% same-store sales growth during the November and December portion of the holiday season has changed their minds. Even with this move KSS still has room to 69.00 short term.

The Markets This Week  January 7, 2018 - 12:11pm

The SPY and QQQ are pushing at the 161.8 extensions which in theory should mean the moves take a break here and at the same time the IWM looks as it is getting ready to break out. For this week I expect stocks to continue their moves even if the SPY and QQQ do pause at these levels.

Intel Corp. (INTC)  January 7, 2018 - 11:46am

Intel Corp. admitted Wednesday that its chips have a vulnerability that will require software patches, but denied a media report that said other companies’ chips were not affected and that the software updates will have a major effect on devices’ performance. Intel shares had their worst day in eight months Thursday, but pared deeper earlier losses after disputing some of the details of Tuesday evening’s report from online technology news site The Register. That report said Intel chips has caused Linux coders and those at Microsoft Corp. to patch their operating systems for security reasons. Most damning, however, was that the report said these patches will slow down performance by 5% to 30% in certain systems with Intel chips, and that Advanced Micro Devices Inc. processors were not affected. AMD later said there was a “near zero” chance its chips could be affected. Even after all of this INTC is still hanging near its all time high at 47.64.

Tesla (TSLA)  January 7, 2018 - 11:30am

Tesla Inc. said late Wednesday it delivered 29,870 vehicles in the fourth quarter, slightly less than expectations, and pushed back a Model 3 production target to the second quarter of this year while seeking to assure investors it had figured out the “bottlenecks” that have plagued the sedan’s early production. Tesla said it delivered 1,550 Model 3 sedans, 15,200 Model S sedans, and 13,120 Model X SUVs in the fourth quarter, and that more than 800 Model 3s were in transit. Analysts polled by FactSet had expected about 30,000 vehicles delivered in the quarter, with about 4,000 expected to be Model 3. The Silicon Valley car maker said it made “major progress addressing Model 3 production bottlenecks,” with the production rate increasing “significantly” toward the end of the quarter. It added, however, that it now expects to reach a production rate of 5,000 Model 3 sedans a week by the end of the second quarter. Tesla had promised shareholders it would ramp up Model 3 production to 5,000 sedans a week in 2017 and then on to 10,000 a week in 2018, but production bottlenecks disclosed in October had led the company to push back its 2017 goal to late in the first quarter of 2018, putting pressure on the company’s cash position. TSLA needs to hold this 300 area or the recent downtrend will continue.

Constellation Brands (STZ)  January 7, 2018 - 11:13am

Constellation Brands Inc. said Friday it had net income of $491.1 million, or $2.44 a share, in its fiscal third quarter to Nov. 30, up from $405.9 million, or $1.98 a share, in the year-earlier period. On a comparable basis, the company had EPS of $2.00, beating the FactSet consensus of $1.89. The distributor of Corona beer and Robert Mondavi wine said sales fell to $1.799 billion from $1.811 billion, below the FactSet consensus of $1.867 billion. The company raised its 2018 EPS outlook to $8.50 to $8.60 and its comparable EPS outlook to $8.40 to $8.50. The FactSet consensus is for fiscal 2018 EPS of $8.43. The company said its board has approved a new $3 billion share buyback program. Shares fell 2.6% Fridaythe first gap down in the last four reports.

The Markets This Week  January 1, 2018 - 1:25pm

Although there was some pretty good selling into the close Friday the indexes are generally still trading in a range. Typically the new year brings some inflow of funds to the markets so we will watch for that this week with a good eye on the 266 level on the SPY.

Amazon.com (AMZN)  January 1, 2018 - 1:20pm

Ken Allen, manager of the $5.4 billion T. Rowe Price Science & Technology Fund, said cloud-computing stocks are bound to generate outsized returns for years to come. “I think of cloud being more of a data service, like Amazon Web Services or the Microsoft Azure data center,” Allen said in an interview Dec. 20, while explaining an expanded definition for “cloud.” Allen considers Amazon undervalued, despite its amazing return this year (56% through Dec. 22), as long as an investor can make a long commitment. It’s easy to be frightened away by Amazon’s valuation. The stock closed at $1,168 on Dec. 22 and traded for 147 times the consensus 2018 earnings estimate of $7.97, among analysts polled by FactSet. But investors have grown used to high price-to-earnings ratios for Amazon while focusing on the company’s increasing revenue as it disrupts various industries, and creates and expands new services. The company’s third-quarter revenue rose 34% to $43.7 billion, while sales for Amazon Web Services were up 42% to $4.6 billion. AMZN has been trading in a range for the last few weeks.

Tesla (TSLA)  January 1, 2018 - 1:10pm

Tesla Inc. shares slid last week after KeyBanc analysts slashed their fourth-quarter estimates for Model 3 deliveries to about 5,000 from 15,000. Analysts Brad Erickson and Elliot Arnson said they expect the numbers for the mass-market sedan that was launched in July to be unveiled early next week. “While it is likely to be a few quarters before the company’s true Model 3 gross margin judgment day arrives, we remain sector weight as we think the [Model 3] margin ramp will disappoint and investors will have to acknowledge no [Model S and Model X] growth at some point, which is not reflected in the shares,” they wrote in a note. The revised estimate is based on conversations with salespeople at 18 Tesla stores around the U.S., said the analysts. “We talked to stores in California doing as many as a dozen per week with around 10 being the average, and we estimate stores outside of California were doing something closer to half a dozen per week,” said the note. TSLA looks to be headed to the recent low of 300.00.

Alibaba Group (BABA)  January 1, 2018 - 12:58pm

Chinese e-commerce giant Alibaba Group Holding Ltd. is the most likely of six leading internet rivals to reach $1 trillion in market cap by 2020, MKM Partners analyst Rob Sanderson said Friday. That would put it ahead of the other four companies, namely Apple Inc., Alphabet Inc.,  Amazon.com Inc. and Facebook Inc. Sanderson wrote in a note. Apple is currently closest to $1 trillion and a case could be made for it to achieve that threshold by 2019, he wrote. "We think it's most likely 2021 when the barrier is broken by an Internet company, but think BABA may have the best chance for 2020 despite being the smallest of the mega-caps today," he wrote. To get there, the company would need to exceed the current earnings consensus by 20% in calendar year 2018, grow EPS by 45% in calendar year 2019, have an outlook for 40% growth for calendar year 2020 and maintain its 24 times forward price/equity ratio, he said. For BABA to continue the current strong trend it needs to push through 181.17.

The Markets This Week  December 23, 2017 - 7:36pm

Markets were sluggish across the board last week and at some point this range will break. If we are going to get any kind of Santa rally it has to be this week. On the SPY watch 268.50 on the upside and 266.8 as support.

Square Inc. (SQ)  December 23, 2017 - 7:32pm

Shares of Square Inc. slumped 2.04% Friday. The company said last month that it was allowing a "small number" of users of its mobile money-transfer service, Square Cash, to buy bitcoin from its app. It is now trading below the support zone that it has held for weeks.

Advanced Micro Devices (AMD)  December 23, 2017 - 7:27pm

Shares of Advanced Micro Devices Inc. sank 3.2% in active trade Friday, enough to pace the S&P 500 decliners, as they were pulled down by the chip maker's connection to cryptocurrencies, which were plunging in morning trade. Volume topped 21.5 million shares, making the stock the most actively traded on major U.S. exchanges. AMD has key support at 9.67.