The Surf Report

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closing recap:


stocks skyrocketed today, exploding upwards in a massive rally despite crushingly negative consumer confidence numbers and rising oil prices. Bargain hunters and rate cut anticipation pushed the DJIA ahead by +889.35 to 9065.12, the Nasdaq soared +143.57 to 1649.47 and the broad based S&P 500 jumped an astounding +91.59 to 940.51. Word of a rate cut in Japan pushed the Yen to a steep decline against the U.S. Dollar.

AmeriCredit (ACF | Quote | Chart | News | PowerRating) - A dark spot on a stellar day in the market falling 23.01% or $1.36 to $4.55/share as high charge offs hit this auto lender of last resort.

AT&T (T | Quote | Chart | News | PowerRating) - Climbed 13.20% or $3.22 to $27.61/share after Morgan Stanley increased its holding in its portfolio.

Metavante Tech (MV | Quote | Chart | News | PowerRating) - Soared 32.69% or $3.88 to $15.75/share as the maker of banking technology products said it was increasing its forecast.

Plum Creek Timber (PCL | Quote | Chart | News | PowerRating) - Advanced 24.49% or $7.53 to $38.28/share due to increasing land sale revenue.

Oil climbed 0.73 cents to $63.95, gold added $4.50 to $747.40 and the VIX fear index dropped 16.36% to 66.96 as confidence seeps back into the stock market
 
Quote from marketsurfer:

Suggest entering Northrup here at 41.97 closing price

stops at 34.93


:D
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have been researching stocks that I believe will have the biggest bang for the buck combined with safety of principal when the market recovery hits.

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The soon to happen presidential election combined with the financial meltdown creates an environment of uncertainty and fear. Regardless of who is elected and how long the recovery takes, one thing remains a constant or increases, is spending on national defense.

Therefore, to support my theory, I searched out companies that are well known in this space and ideally had technically pulled back from the highs during the recent market rout to create historically reasonable entry points, yet remained fundamentally strong. A recent upgrade in the long term PowerRating was also a must factor in the choice.
EDIT EDITdfdsadfsdfsdcvxzavwrfqwfqsdewf9048r49r840r30r830r83r8r83r83r983r83r938r9438r943r84390r8490edit

. Let's take a closer look at our stock spotlight today, Northrup Grumman (NYSE:NOC - News).



NOC began as an aircraft company in 1939, when Jack Northrup began making planes for the military. It has since acquired a multitude of companies such as Westinghouse Electric, Logicon, Teledyne Ryan, Litton, Newport News Shipbuilding, and TRW among many other smaller companies. These acquisitions and internal innovation has built NOC into a leading company in the defense space, across many sectors and disciplines.

Fundamentally, the third quarter results were solid with EPS up 6%, guidance increased by 0.10 cents per share, and sales are up 6%. However, what I find most enticing fundamentally is NOC has $70 billion in new orders that are backlogged. This is a huge number and should work nicely in the companies favor, in my opinion. They were just upgraded from a 4 to a 5 long term PowerRating earlier in the week showing improvement in this important factor.

Technically, the shares appear to have found support in the $37- $40.00/share range after spiking down in what looks like capitulation selling on October 13th. The stock has since bounced being capped by a 4 plus point advance during the monster rally on Tuesday. I like the fact that price is still way below the 50 and 200-day simple moving averages at 59.53 and 69.93 in order. Technically, it appears that plenty of upside potential exists just to get back to the historic average price. Reversion to the mean is a powerful trading concept and it may play out nicely here with substantial gains in the price. Technically, fundamentally and long term PowerRating upgrade wise, NOC looks like a strong candidate for your long term portfolio
 
BE THERE AND BE SQUARE~


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Just returned from a traders monthly event at the world bar near the UN. decent turnout of suits and other assorted trader types. selling expensive but unknown glashutte brand watches by scientist looking characters in lab coats and microscopes. good to see people still having interest in such luxury, someone is still making coin on the street of dreams......

published recap on some stocks that caught my eye today:

The Federal Reserve slashed interest rates 50 basis points today to 1.00%, meeting the consensus forecast figure. Stocks had an unusual reaction to the news, first selling off, then rallying hard, ending mixed across the board. The DJIA staged an impressive rally in the final hour, only to be knocked down -74.16 to 8990.96 below the critical technical support level of 9000. The Nasdaq closed in positive territory adding +7.74 to 1657.21 and the broad based S&P 500 failed to hang on to gains losing -10.42 to 930.09. The slashing of rates launched oil into a substantial rally on the belief that lower rates will spur economic activity hence increase demand for Texan Tea.

Allis Chambers Energy (ALY | Quote | Chart | News | PowerRating) - This interesting company formed from a bankrupt tractor firm jumped 23.14% or $1.20 to $6.44/share after beating analyst third quarter earning estimates by 17% per the oil services firm.

General Motors (GM | Quote | Chart | News | PowerRating) - Led the DJIA in gains, climbing 8.16% or 0.51 cents to $6.76/share after resolving major issues in merger talks with Cerberus Capital per Reuters.

Johnson & Johnson (JNJ | Quote | Chart | News | PowerRating) - Was the biggest loser in the DJIA slipping 4.14% or $2.66 to $61.53/share due to being downgraded to neutral by JP Morgan and additional harsh words from the investment bank added to the negative sentiment.

Sealed Air (SEE | Quote | Chart | News | PowerRating) - The bubble wrap maker popped down 22.13% or $4.65 to $16.36/share after failing to meet third quarter estimates due to falling demand.

Oil soared $4.77 to $68.13, gold advanced $13.50 to $754.00 and the fear index VIX jumped up by 4.48% to 69.96
 
Trading and Investing Expo in Sydney last weekend was more colorful and there was someone that looked remarkedly like Larry Williams wandering around as well.

You really need to expand your horizons Surf.

Nice to see your spirits up.
 
Quote from ProfLogic:

Trading and Investing Expo in Sydney last weekend was more colorful and there was someone that looked remarkedly like Larry Williams wandering around as well.

You really need to expand your horizons Surf.

Nice to see your spirits up.
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thanks, prof, nice to see you back. i betcha that was LW, not sure what happened with the heath ledger situation. will you be visiting the NYC expo this year? Gonna have the 4th annual surf fest, hope you can make it!!
 
Quote from marketsurfer:

thanks, prof, nice to see you back. i betcha that was LW, not sure what happened with the heath ledger situation. will you be visiting the NYC expo this year? Gonna have the 4th annual surf fest, hope you can make it!!
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It was LW . . .

I'm planning on the NYC Expo this year, the better half wants to do some shopping and I need my NYC fix.
I promise to dress for Surfest 09' too.
 
Quote from marketsurfer:

yes, you are correct. my market read for the future is generally early and require averging in generally. although the trade didnt work out, i stand by the call that all time highs in the US indexes by 4.1.2009.

the influx of massive capital can't be stopped and will FORCE equities to all time highs....

surf

"Oil climbed 0.73 cents to $63.95, gold added $4.50 to $747.40 and the VIX fear index dropped 16.36% to 66.96 as confidence seeps back into the stock market"
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who would have thought that a VIX could be 66.96 and still mean confidence was on the rise.......


Glad you had a good time at the tradersmonthly event.


I know many point to CROX to say your early but I actually made some good coin selling OTM calls on it as I thought it was overdone as well. I also think for the most part your spot on, and I have a huge amount of respect for your talent.

I think you early with this one with the 4.1.2009

I know huge amounts of money are pouring into the system as I can hear the printing presses all the way in Wisconsin.

At the same time I think some overriding things are in play.

1. The world is going into a slow down and while everyone talks about everything is made in China the fact remains we are the number one manufacturer in the world. This will be a negative force on profits and the rest of the US economy as a whole. One look at GGP/CBL shows how retail is doing.

2. The wealth destruction that has gone on in the markets and in real estate is not more than offset by the growth in money supply from what I can see.

3. having the Dems in total control of the legislative process AND with a political axe to grind (rightly or wrongly) on Wall St. it's not IMHO going to make people break out the checkbooks to buy some stock if capital gains / dividend income taxes go up


So for me, I don't see a new all time high in the market in the first half of 09 much less in the first three months plus a day time frame. I hope I am wrong and your right as I will make more money : o )


Best to you surf

Bob
 
Quote from 1Reason:

who would have thought that a VIX could be 66.96 and still mean confidence was on the rise.......


Glad you had a good time at the tradersmonthly event.


I know many point to CROX to say your early but I actually made some good coin selling OTM calls on it as I thought it was overdone as well. I also think for the most part your spot on, and I have a huge amount of respect for your talent.

I think you early with this one with the 4.1.2009

I know huge amounts of money are pouring into the system as I can hear the printing presses all the way in Wisconsin.

At the same time I think some overriding things are in play.

1. The world is going into a slow down and while everyone talks about everything is made in China the fact remains we are the number one manufacturer in the world. This will be a negative force on profits and the rest of the US economy as a whole. One look at GGP/CBL shows how retail is doing.

2. The wealth destruction that has gone on in the markets and in real estate is not more than offset by the growth in money supply from what I can see.

3. having the Dems in total control of the legislative process AND with a political axe to grind (rightly or wrongly) on Wall St. it's not IMHO going to make people break out the checkbooks to buy some stock if capital gains / dividend income taxes go up


So for me, I don't see a new all time high in the market in the first half of 09 much less in the first three months plus a day time frame. I hope I am wrong and your right as I will make more money : o )


Best to you surf

Bob
More...


Thanks for the thougts and kind words. time will tell!

all the best,

surf
 
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