Trading Blog

The Markets This Week  June 18, 2017 - 10:10am

It could be an interesting week in the markets as we watch and see if they stay range bound or make a move. I am looking at support on the SPY between 239-240 and I am watch the QQQ to see if it holds the 55ema at 137.30 or looks to test the recent swing low at 135.97. I expect the IWM to remain range bound as it has been over the last few months.

Tesla (TSLA)  June 18, 2017 - 10:05am

Tesla Inc.’s lead in driverless-car technology would not be enough to insulate the Silicon Valley car maker from head-on competition with Apple Inc., analysts at Morgan Stanley said in a note last Wednesday. Tesla has dominated the spotlight in applying artificial-intelligence concepts to transportation, but Tesla investors “must prepare for serious competition for talent and investment capital in this market,” the analysts, led by Adam Jonas, said in the note. In an interview with Bloomberg TV aired Tuesday, Apple Chief Executive Tim Cook confirmed his company is working on what he called “autonomous systems,” and one purpose of such technology is driverless cars. Apple had for years dodged questions about its efforts to build an “Apple car.” Depending on how Apple plans to compete in the autonomous driving race, it could take a page from Google parent Alphabet Inc. which focuses on hardware as well as software with its Waymo subsidiary, or focus solely on software. The Morgan Stanley analysts believe Apple is likely to “eventually move beyond just software into designing a full car and/or launching a platform for third-party services and content over time.” TSLA is still at highs and if it can clear and hold 376.67 it could go on another run.

Alphabet (GOOGL)  June 18, 2017 - 9:58am

Shares of Google parent Alphabet Inc. sank Thursday, after internet-search giant was downgraded to neutral from buy at Canaccord Genuity. Analyst Michael Graham cut his rating, because he said he believes Alphabet’s current growth rate is unsustainable, particularly as it is seen coming from increased ad load. The downgrade comes amid a continuing selloff of technology stocks, with Graham pointing to increasing concerns over valuation among the large-capitalization “FANG” stocks. On Alphabet, Graham believes the company’s ad load, particularly on mobile search and YouTube, has helped the company achieve revenue growth in the past two years. That trend will be hard to continue as the company won’t want to overload its users. GOOGL is currently trying to hold the swing low at 940 on the chart.

Amazon.com (AMZN)  June 18, 2017 - 9:48am

Amazon.com Inc. said it would buy Whole Foods Market Inc. for $13.7 billion as the giant internet retailer makes a deeper push into the grocery space. Amazon will pay $42 a share for Whole Foods valuing the grocer at a 27% premium to its closing price Thursday. The deal is expected to close in the second half of this year. Amazon’s move tanked the stocks of grocery competitors as investors worried that Amazon could do to grocery the same as it did to booksellers. AMZN stock jumped on this news so now just watch the gap.

The Markets This Week  June 11, 2017 - 2:21pm

Friday was a rather unexpected volatile day in the markets with a big drop in SPY and QQQ followed by some buying into the end of the day. The IWM on the other hand popped and then sold off some into close. This is the second somewhat volatile day in the markets in the last month and the previous one, in mid May, we recovered from very quickly. It is hard to say what this week will bring but if volatility sticks around it will be a wild ride. If volatility subsides we should some sideways action.

Nvidia Corp. (NVDA)  June 11, 2017 - 2:12pm

Shares of NVIDIA finished down over 6%. The high-flying chipmaker found itself the subject of negative comments from short-seller Andrew Left of Citron Research, who said that numerous analyst upgrades have turned the stock into a vehicle for gambling among traders. Although Left acknowledges that NVIDIA's graphic processing chip franchise has substantial growth potential and could help drive further advances for the company as well, potential competition does exist that could hurt NVIDIA's pace of revenue gains going forward. Despite the drop, shares have still tripled in less than a year, and NVIDIA's promise in fast-growing areas like self-driving vehicles could become the catalyst for further long-term gains. Hard to say what happens in short term here with Friday's candle so wait to see what happens open on Monday.

Apple Inc. (AAPL)  June 11, 2017 - 2:06pm

Shares of Apple dropped almost 4% Friday in the wake of concerns about whether it will be able to deliver on promises for future product launches. Many investors are waiting impatiently for news on the iPhone 8 upgrade, and rumors have surfaced about a potential delay in when the 10th anniversary edition of the groundbreaking mobile device will be released to the public. In addition, a newer report suggested that performance of the iPhone modem could face competitive disadvantages. Yet with Apple stock having climbed so sharply in recent months, it's not surprising to see a quick pullback after a long run higher. Even with today's decline, Apple appears poised to keep benefiting from its popular consumer products for years to come.It held the support zone Friday but keep an eye on 146.40 going forward.

Citigroup Inc (C)  June 11, 2017 - 2:02pm

Shares of Citigroup Inc. shot up to an eight-and-half-year high Friday, after UBS backed away from its bearish case, as President Donald Trump’s policy promises appear less likely to be fulfilled. Analyst Saul Martinez raised his rating on Citi to neutral, after assuming coverage of the bank with a sell rating on Jan. 10. He boosted his stock price to $64, which is 0.7% below current levels, from $58. The stock rallied $1.24, or 2.0%, to $64.45, the highest close since Jan. 9, 2009. Volume of 31.1 million shares was more than double the full-day average of 15.3 million shares, and enough to make the stock the fifth-most actively traded on the New York Stock Exchange. Martinez said his bearish case was based on Citi having less exposure than its peers to the potential positives of lower taxes, faster economic growth and higher interest rates, all of which were expected from Trump’s promises to cut corporate taxes and increase military and infrastructure spending. In addition, Martinez said Citi had greater exposure than its money-center rivals to potential downside from protectionist policies, also something Trump espoused, and other geopolitical risks. There is still room to 66.20 at the 161.8 extension.

The Markets This Week  June 4, 2017 - 11:28am

The markets are off to the races again pushing higher, however, we our getting close to Resistance on these charts. The SPY has some room to 245.7 and the QQQ to 145.3. The IWM is trying to get out of the range here and attempted a move to the recent swing high at 141.82 on Friday before pulling back. This week I am looking for a little more upside then some consolidation.

RH.com (RH)  June 4, 2017 - 11:24am

RH  the retail chain formerly known as Restoration Hardware, nded Friday down over 25% after cutting its earnings outlook for the year. RH reported a net loss of $3.4 million, or 9 cents a share, on sales of $562.1 million for its fiscal first quarter. After adjustments for amortization and other effects, RH claimed profit of 5 cents a share. Analysts on average expected RH to report adjusted earnings of 5 cents a share on sales of $556 million. The chain, which is moving to a membership model and launching cafes in its stores, said that it will try to liquidate inventory for cash while building out its in-store offerings, which will boost revenue but hurt profit. RH increased its full-year revenue guidance to $2.4 billion to $2.45 billion, from a previous forecast of $2.3 billion to $2.4 billion, but projected adjusted earnings of $1.67 to $1.94 a share after previously forecasting $1.78 to $2.19 a share. "We are taking a cautiously optimistic approach to our outlook given the uncertain macro environment in addition to the many initiatives and investments we are undertaking," Chief Executive Gary Friedman wrote in a letter that included the earnings information Thursday afternoon. RH could continue to find support here at 41.57.

Lululemon Athletica Inc. (LULU)  June 4, 2017 - 11:20am

Shares of Lululemon Athletica Inc.ended Friday up 11.5% after the apparel maker reported first-quarter earnings Thursday above expectations and announced a shake-up of its Ivivva brand, which caters to girls. Lululemon said it plans to close about 40 of its 55 Ivivva stores and fold about half of the brand's remaining stores to the Lululemon brand. Lululemon said it earned $31.2 million, or 23 cents a share, in the quarter, compared with $45.3 million, or 33 cents a share, in the year-ago period. Adjusted for one-time items, including restructuring charges related to Ivivva, the company said it earned 33 cents, compared with 30 cents a year ago. Sales reached $520.3 million, compared with $495.5 million a year ago. Analysts polled by FactSet had expected adjusted earnings of 28 cents a share on sales of $514 million. Lululemon said it plans to operate Ivivva primarily online, closing all of the brand's showrooms and other temporary locations, and that it will "streamline" its corporate infrastructure. Lululemon said it expects the Ivivva restructuring to cost between $50 million and $60 million in fiscal 2017, pre tax and including $17.7 million recognized in the first quarter, mostly to cover lease termination charges and asset impairments. The retailer said it expected full-year 2017 net revenue in the range of $2.53 billion and $2.58 billion and per-share earnings $1.97 to $2.07 for the full year. On the charts LULU has a gap to fill to 64.01.

Snap Inc. (SNAP)  June 4, 2017 - 11:18am

Facebook Inc. and Snap Inc. could be sitting on a $16 billion revenue opportunity. In her annual internet trends report released Wednesday, Kleiner Perkins Caufield & Byers partner Mary Meeker pointed to a gap in the monetization of mobile users in the U.S. Time spent on mobile had increased to 28% of total media consumption time in 2016, while advertising agencies were only allocating 21% of their spending there. Meeker thinks that is a huge opportunity waiting for online advertising platforms like Facebook, Snapchat parent Snap  and Alphabet Inc.’s Google. Forrester researchers expect advertising spend to more than double from 2016 to 2021. As of May 2016, the researchers pegged mobile advertising spending at 48% of online advertising spending in the U.S., which they expected to grow to 70%. SNAP is currently trying to fill the gap from the earnings drop to 22.87.

The Markets This Week  May 29, 2017 - 1:22pm

The SPY took a break Friday on low volume going into a three day weekend after busting through that 240 barrier on Thursday. On this breakout the first target is 242.8 then 245. I see more upside coming this week. The QQQ is in a very similar pattern with targets at 142.16 and 145.

Costco Wholesale Corp (COST)  May 29, 2017 - 1:13pm

Costco Wholesale Corp.’s third-quarter results demonstrated to Stifel that the warehouse retailer has what it takes to beat back competition from Wal-Mart Stores Inc. and Amazon.com Inc., analysts wrote in a Friday note. Costco reported earnings of $1.59 per share, up from $1.24 last year. Adjusted earnings of $1.40 a share beat consensus the consensus estimate of $1.31, according to FactSet. Sales of $28.86 billion were up from $26.77 billion a year ago but ahead of the $28.59 billion FactSet consensus estimate. Same-store sales were up 5% for the quarter, also beating the FactSet consensus, which called for a 4.1% increase. Shares closed up 1.8% on Friday. If the gap low doesn't hold at 177.52 could fill down to 175.05.

Lowe's Cos. (LOW)  May 29, 2017 - 1:07pm

Lowe's Cos. last Wednesday posted quarterly sales and adjusted earnings that fell short of Wall Street's targets. First-quarter adjusted earnings at the home-improvement retailer were $1.03 a share, compared with FactSet estimate of $1.06 a share. Lowe's said adjusted earnings were 87 cents a year ago. Net earnings were $602 million, or 70 cents a share, compared with $884 million, or 98 cents a share, a year ago. First-quarter sales came in at $16.86 billion, up from $15.23 billion in the year-earlier period, but below the FactSet consensus estimate of $16.95 billion. Same-store sales during the quarter rose 1.9%, said Lowe's. The stock took a hit on that earnings report but is working on a gap fill to 82.15.