The Surf Report

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Annaland and I just returned from being sunburned on an island in the deep south-- who would get burned in December--the pasty and naive' northerners ask..... presently, drinking sexbeach/ blue surfer drinks and listening to mariachi bands while contemplating 2008 and the future. Back to the beach tomorrow, but with 30 SPF sunscreen this time...

Thanks for reading in 2008-- despite the market errors, some killer suggestions were made and tons was learned. we survived to go at it again.

2009 is going to be a great year, stay tuned!


happy new year!

surf
 
This final week of 2008 and start of 2009 is a lack luster, low volatility end to an explosive stock market year.

The Dow Jones Industrial Average, the world?s best known market barometer, fell an astounding 33.8%, the largest drop since 1931. Volatility spiked to all time record high levels with the VIX surging upwards, as investors scrambled to buy portfolio insurance in the form of options. During this time, the economically precious commodity oil spiked then fell hard, silencing the Peak Oil true believers with the real rules of supply and demand. The other widely followed commodity gold, spiked to $1033.90/oz early in 2008.

This market phenomenon put housewives and the general public at large into a gold buying/selling frenzy in Mary Kay/Tupperware type home parties as surging prices attracted entrepreneurs seeking to extract value from jewelry gold scraps, exploiting the price/access naivety of the public. Gold pulled back during the year, dropping into the high $600?s prior to resuming an uptrend toward the end of 2008. This final, holiday shortened week was mostly flat for stocks.

Monday was hit with the bad news of Kuwait pulling the plug on a major financing deal for Dow Chemical, however the indexes took it in stride closing only slightly down on the day. Good news of the Feds adding billions to the automaker bailout plan lifted stocks on Tuesday. The rally continued into Wednesday with positive news from the employment sector and further signals of government aid to the beleaguered automobile business. Markets were closed on Thursday for the 2009 New Years Holiday and are nicely positive thus far on Friday morning.

I remain solid in the belief that the government cash infusion, bargain hunters, and the tremendous amount of cash that's just waiting to be deployed should allow the bounce to continue despite the recent slow action. 2009 will likely be a slightly positive one for stocks. Of course, nobody really knows for sure, we can only do our best to accurately analyze market factors to project into the future.



Gen-Probe Inc (GPRO | Quote | Chart | News | PowerRating) - This San Diego based medical diagnostic company was just upgraded from a 3 to a 4 Long Term PowerRating. They are a global leader in development, manufacturing, and marketing of NATs for screening human blood to diagnose disease. The company had an amazing 3rd quarter with Earnings Per Share up 71% and a 19% increase in Revenues over last year. Gross margin is up and they are very confident about the future. Technically, price has bounced off a late November low of $30.00/share. Shares have met resistance at the 50-day Simple Moving Average currently at $40.96/share over the last 8 trading days. If price is able to break the 50-day Simple Moving Average, the next technical resistance currently appears at the 200-day Simple Moving Average at $50.43/share.

Royal Gold (RGLD | Quote | Chart | News | PowerRating) - The leading precious metal royalty company was just upgraded from a 2 to a 3 Long Term PowerRating. Free Cash Flow increased by 36% quarter over quarter and they just obtained a new $125 million dollar credit line. Gold appearing to have resumed its uptrend has helped this firm tremendously. Technically, price has been in a ripping uptrend since October, 27th, bursting through both the 50-and 200-day Simple Moving Averages while soaring higher.

Teva Pharmaceuticals (TEVA | Quote | Chart | News | PowerRating) - A drug company that was awarded top rankings in the Nasdaq 100 index with a 5 Long Term PowerRating. They just reported record net sales and a 20% EPS increase in the 3rd quarter. Technically, price is channeling between $42.00 and $43.00/share and has just broken above the 50-day Simple Moving Average.

Cephalon Inc (CEPH | Quote | Chart | News | PowerRating) - Another 5 rated drug stock in the Nasdaq 100. It remains the highest rated company in the Nasdaq index this week. It was recently announced that they exceeded both sales and earnings guidance for the 2nd quarter of 2008. Their new products TREANDA and AMRIX are experiencing vigorous interest and the company continues to innovate. Price has been in an impressive up trend, above both the 50 and 200-day Simple Moving Averages. Resistance appears at $78.00/share and again at $80.00/share. Price is flirting with the $78.00 level resistance today.

Stocks in the News

The final week of the difficult 2008 provided several news worthy stocks:

Akorn Inc (AKRX | Quote | Chart | News | PowerRating) - Jumped after the FDA approved the companies treatment for infections.

National Penn Bancshares (NPBC | Quote | Chart | News | PowerRating) - fell due to a heavy impairment charge caused by writing down the value of its preferred securities.

Puget Energy (PSD | Quote | Chart | News | PowerRating) - Climbed after Puget Holdings obtained information to purchase the company for $7.4 billion.

Time Warner Cable (TWC | Quote | Chart | News | PowerRating) - Dropped after Viacom threatened to pull channels.

Dow Chemical (DOW | Quote | Chart | News | PowerRating) - Plummeted after Kuwait pulled $9 billion dollars in credit to fund the Rohm Haas takeover.

AgFeed (FEED | Quote | Chart | News | PowerRating) - The Chinese hog and feed maker fell hard after announcing an equity sale and cutting the planned share buyback plan.

Riverbed Tech (RVBD | Quote | Chart | News | PowerRating) - Wedbush Morgan cut its rating to hold pushing the stock down.

Jones Apparel (JNY | Quote | Chart | News | PowerRating) - The popular clothing maker dipped on disappointing holiday retail sales.

What To Watch For Next Week

Monday - Auto Sales

Tuesday - Factory Orders, ISM Services

Wednesday - Crude Inventories

Thursday - Initial Claims, Consumer Credit

Friday - Non Farm Payrolls, Unemployment
 
Here is a tasty stock tidbit from our stock research for the surf report readers:



In this day and age of bank bailouts and economic chaos, it is indeed rare to find a financial institution that feels confident enough to refuse government money. Our PowerRating Spotlight stock this week is one such confident institution, The Bank of Hawaii (NYSE:BOH - News). They were just upgraded from a 2 to a 3 Long Term PowerRating and definitely deserve a closer look by long term investors.



The ratings are dynamic which means the calculations are performed daily in the case of Long Term PowerRatings with the results expected one year from the day one sees the rating. This is in stark contrast to other static stock ranking systems you may see on the internet. Let's drill deeper into The Bank of Hawaii BOH.

The Bank was formed in 1897 and is the largest independent financial institution in Hawaii. They serve America Samoa, Guam, and the Pacific Islands, as well as Hawaii. The Bank divides its business segments into 4 divisions. These divisions are Retail Banking, Commercial Banking, Investment Services, and Treasury. The Hawaiian economy is slowing, however personal income growth continued to remain positive during the first half of 2008.

CEO Allan Landon stated that they had good financial performance in the 3rd quarter despite a challenging environment. Most revealing was the banks refusal to participate in the government bail out program believing these funds were not needed to maintain operations. This is indeed a positive signal from this regional banking institution.

The Board of Directors recently voted to increase dividends by 0.45 cents and increased repurchase authorizations by $50 million. These actions should impact the stock positively in a fundamental way. Technically, the stock has been in a slight up trend since December 1st. Price is currently pushing hard against the 50 day Simple Moving Average at $43.97.
 
We have calculated the first DJIA YM death channel for 2009.

8963----8893 YMH9 instrument


For those of you new to the surfer system--- one stays flat in the death channel, longs are executed when the top figure breaks, shorts when the lower figure breaks. how the trade is managed once entered is at your discretion based on position size in relation to risk tolerance. i will try entry 5 times at each break prior to profits----before figures are tossed as being in error.


good luck!

surf
 
I was not expecting to suggest shorts today, but the system fired short when the lower channel line of 8893 broke. short here with stops at 8877. 8903 is new upper channel line here.

good luck!
 
PowerRatings Across The Indexes: IBM, JNJ, CEPH, PAYX, ABT, GIS
Dave Goodboy
Tuesday January 13, 2009, 12:12 pm EST
Yahoo! Buzz Print Related:Abbott Laboratories, Cephalon Inc., General Mills Inc.

Related Quotes
Symbol Price Change
ABT 49.78 +0.08

CEPH 74.45 -1.22

GIS 59.26 -0.61

IBM 85.05 -0.66

JNJ 58.71 +0.37


{"s" : "abt,ceph,gis,ibm,jnj","k" : "c10,l10,p20,t10","o" : "","j" : ""} Stocks are mixed despite positive and uplifting words from Fed Chairman Ben Bernanke. This morning he stated that Obama's recovery plan could provide a significant boost to the economy but only if it included other measures. These other measures appear to be focused primarily on freeing up credit and a multi prong government effort to stabilize the economy.

We live in exciting times for traders and investors. Historic low valuations and the strong potential for the government stimulus to ignite a new bull market makes this a fantastic time to once again start looking at the stock market. However, one needs proven tools to put the odds in their favor when choosing stocks for long term investment.


EDIT


The DJIA

International Business Machines (NYSE:IBM - News) - This long time computer powerhouse has earned a 5 Long Term PowerRating. It is the number one rated stock in the DJIA. They turned in excellent 3rd quarter results with income up 20%, EPS edit edit




Johnson & Johnson (NYSE:JNJ - News) - The giant drug company is presently the second highest ranked stock in the DJIA with a 5 Long Term PowerRating. The firm reported 3rd quarter results with sales up 6.4% and EPS increasing by 10.edit




The Nasdaq

Cephalon (NasdaqGS:CEPH - News) - The drug company remains the number one Long Term PowerRated stock in the Nasdaq index. The company was just added to the S&P 500 and has earned a 5 rating. Their TREANDA drug is thriving and they reported record sales in the 3rd quarter. Technically, price is trading above the 50 and 200-day Simple Moving Averages around $75.00/share. However, shares were rejected off of the $80.00 level after a recent sharp up move.




Paychex (NasdaqGS:PAYX - News) - This outsourcing benefit, payroll and human resources company has been awarded a 4 Long Term PowerRating. Fiscal 2nd quarter 2009 was strong with a 6% increase in Revenue and a 7% increase in Net Income. Price is currently below the 50-day SMA and has been channeling between $25.00 and $27.00/share.




The S&P 500

Abbott Labs (NYSE:ABT - News) - The number one ranked stock in the S&P 500 with a 6 Long Term PowerRating. They just reported a 17.6 increase in sales for the 3rd quarter and raised the EPS outlook. Price is below the 50 and 200-day Simple Moving Averages but appears to be channeling between $49.00 and $54.00/share.




General Mills (NYSE:GIS - News) - This giant consumer food company has earned a 6 Long Term PowerRating. Fiscal 2008 results were strong with a 10% increase in net sales and a 6% increase in operating profits. Technically, price is below both the 50 and 200-day SMA and appears to be channeling between $58.00 and $61.00/share.
 
Quote from ProfLogic:

Your party still on for the Expo?
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yes for saturday evening 2.21. still nailing down a venue, will send out invites and post here when confirmed. looking forward to meeting you!
 
I have always loved high technology and gadgets. Product marketers would consider me to be an early adopted for bleeding edge high tech gadgets and gizmos. Although many of the gadget/gizmos I have tried have quickly faded into the dustbin of history, two purchases stand out as being truly iconic, society changing items.

The first one is the Motorola Brick Phone; this giant precursor to the portable cell phone looks downright ancient now. The classic scene in the movie, Wall Street with Gordon Gekko giving Bud Fox his wake up call from the beach looks ridiculous now and clearly dates the movie as 1980's classic. My second most prescient high tech purchase was the Palm Pilot. This shirt pocket sized organizer provided everything and more that the paper based organizers, Day Runners and Filofaxes did. However, the Palm Pilot did it in a much more elegant, cooler and smaller package.

In 1996, this was a truly innovative product. I was a huge fan of the Palm line of products, upgrading into every new generation until mid 2008, when I finally jumped ship into the iPhone.

Today, I noticed that Palm was upgraded from a 1 to a 2 Long Term PowerRating and recalling my positive feelings about the

EDIT EDIT EDIT EDIT

Palm (PALM | Quote | Chart | News | PowerRating) is one of the leading innovators of personal organization and communication devices. They currently face stiff competition from companies such as Research In Motion (RIMM | Quote | Chart | News | PowerRating), and Apple (AAPL | Quote | Chart | News | PowerRating) among many other smaller players in the space.


EDIT EDIT EDIT


The second quarter of their fiscal 2009 was far from positive with a 13% decline in smart phone sales and an astounding 39% decrease in smart phone revenue. However, positive words from CEO, Ed Colligan, concerning breakthrough new products and platforms kept hope alive in the Palm true believer camp. On an interesting note, Bono, yes that Bono from the Irish rock band U2's Hedge Fund, Elevation Partners, just injected $100 million dollars into the company. Bono and his partner Roger McNamee truly believe in the company, that it will continue to transform the cell phone industry and regain its top dog status.

Over the long haul technically, price spiked to the $40.00/share range in the 2000 era, dropped back down to low single digits, then climbed again where it sat in the $20.00/share range until late 2007 when price began another descent to near penny stock status. Recently, shares have bounced hard off the lows of early December, 2008 climbing through both the 50 and 200-day Simple Moving Averages. Price is currently hugging above the 200-day SMA at around $5.50/share. Is this the start of a new era for Palm, or simply a dead cat bounce? As I stated earlier, there are influential people betting big dollars that Palm will once again return to greatness. The company is definitely worth a close look here.

surf
 
Quote from marketsurfer:

yes for saturday evening 2.21. still nailing down a venue, will send out invites and post here when confirmed. looking forward to meeting you!
More...

I'm coming this year . . . I promise no flip flops. :D
 
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