We experienced the biggest sell off week in the past 5 years history, and many folks have been extremely waiting for bottom fishing. Sorry for my being absence for about one week before last on vacation which took me about one week to figure out what was going on the market. Let's take a quick review back onto those titles on the journalism again,
last week,the biggest titles include:
1. DOW hit record hight 14000
2. By year end, we will hit 15000
....
Seems everyone was extremely bullish for the mkt. But we have pointed out before, the rally we saw few weeks ago had not been confirmed by all the leading sectors previously. And the last run rally didn't come up as anticipated and directly jump into a correction. To make it simple, the sold off means that we probably will get into a relatively longer than anticipation correction period. I don't need to emphasize the chart here because all the charts can be read. But we need to understand what cause the reason to sell off the market. In my mind, those reasons include the following ones:
1. mkt has been waiting for an exclusive odds which is that we have a strong economy growth while the FED will has a rate cut. The energy sector soared previously due to gas price soar and eyes for stronger than expected economy. If we had good economy, can we expect a quick rate cut from FED? No, but that is what street hope for, and they will have nothing eventually. This is why we pointed out before we may get into a bear mkt after this last run of rally.
2. Shorter have covered most of their short position the week before last which mean the mkt is overheat at that moment. From a contrarian point, we should be cautious. I also made a mistake by leaving for vacation while keeping my account without watching. The sell off time came earlier than what I thought. The good thing is that I came back:)
Getting into the mkt itself, we will need to find out what sectors got hammered last week. If you pay attention enough, will find out that Energy sector, Finance sector got their biggest cut. Woops, doesn't that mean sth? The subprime woe has been there for quite a while and why should they react at this moment? Once you got the answer, could easily determine what strategy you could use. Do we see hope? yes I think so. Tech sector still outperform most of the sectors especially from the solid fundamental. AAPL,WFR,SNDK, AMZN, QCOM, BIDU, VSEA... all reported solid earning that support the hold-up of semi/tech sector. If mkt rebounce, they would be the first spot to indicate.
Strategy point of view for the next week
Mkt has got into extremely oversold area that could lead to a rebounce starting at the beginning of next week. But rebounce is rebounce, don't be fooled by holding your position longer after witness the possible rally. It would only be a time to reduce your cost and pls take your profit quickly. The force analysis between bull and bear currently implies a stronger force on the side of bear. Trading against the force could lead to mistake or huge lost eventually. So next week, cut your loss or take your profit asap when you see mkt rebounces. At the end of the week, if mkt rally more than 300 points, buying put or short will be a good consideration.
Sunday, July 29, 2007
Wednesday, July 25, 2007
How much could AAPL be valuated?
In my model, based on its current qter earning, it should be valuated at lower end $144, and higher end $158. But since too much speculation eyes on AAPL, it could go much higher than this number in a short amount of time.
Apple quarterly profit rises on Mac strength
Wednesday July 25, 5:41 pm ET
SAN FRANCISCO (Reuters) - Apple Inc. (NasdaqGS:AAPL - News) posted a higher quarterly profit that zoomed past expectations on strong Macintosh sales and said it expected to sell one million iPhones by the end of the current quarter.
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It also reported a surprising rise in its profit margin from the previous quarter on Wednesday because of less expensive components and strong direct sales.
Shares of Apple, up 62 percent since the start of the year when Chief Executive Steve Jobs unveiled the iPhone, rose 6.5 after the report.
"Apple destroyed numbers for this quarter. Its Mac numbers were very strong and above expectations," said Shannon Cross, an analyst at Cross Research.
"Their gross margin at 37 percent was extremely strong and bodes well for HP and Dell from a commodity-price perspective."
Apple's net income for its fiscal third quarter ended June 30 was $818 million, or 92 cents per share, compared with $472 million, or 54 cents per share, a year earlier. Revenue was $5.41 billion, up 24 percent from $4.37 billion a year earlier.
Apple had been expected to earn $644.4 million, or 72 cents per share, on revenue of $5.29 billion, according to the average analyst forecast on Reuters Estimates.
Gross profit margin was 36.9 percent, up from the 35.1 percent the company achieved in the previous quarter, a show of strength that the company had not predicted.
Chief Financial Officer Peter Oppenheimer told Reuters that component prices and strong direct sales by Apple helped drive the increase in profit margin.
Apple also estimated earnings of about 65 cents per share on revenue of about $5.7 billion for its fiscal fourth quarter.
Apple said it shipped 1.76 million Macintosh computers in the quarter, a rise of 33 percent from a year earlier.
Shipments of iPods were 9.82 million, up 21 percent from the same period a year earlier.
The iPhone went on sale on June 29 but its impact on Apple's results was limited because it was available only in the last two days of the quarter and sales will be booked as subscription revenue over two years.
It sold 270,000 iPhones in the two days.
Sam Rahman, portfolio manager at Baring Asset Management in Boston, said the forecast for 1 million iPhone sales by the end of the first full quarter of sales was "a very big number" and predicted shares would move higher.
Apple shares rose 6.5 percent to $146.13 in after-hours trade from a close of $137.26 on Nasdaq.
Jobs at the beginning of the year set a goal of selling 10 million units in 2008, helping to fuel the stock run-up this year. Oppenheimer reiterated that goal in an analyst call on Wednesday. The shares trade at 30 times its expected 2009 profit, a level most analysts say represents a rich valuation.
Apple quarterly profit rises on Mac strength
Wednesday July 25, 5:41 pm ET
SAN FRANCISCO (Reuters) - Apple Inc. (NasdaqGS:AAPL - News) posted a higher quarterly profit that zoomed past expectations on strong Macintosh sales and said it expected to sell one million iPhones by the end of the current quarter.
ADVERTISEMENT
It also reported a surprising rise in its profit margin from the previous quarter on Wednesday because of less expensive components and strong direct sales.
Shares of Apple, up 62 percent since the start of the year when Chief Executive Steve Jobs unveiled the iPhone, rose 6.5 after the report.
"Apple destroyed numbers for this quarter. Its Mac numbers were very strong and above expectations," said Shannon Cross, an analyst at Cross Research.
"Their gross margin at 37 percent was extremely strong and bodes well for HP and Dell from a commodity-price perspective."
Apple's net income for its fiscal third quarter ended June 30 was $818 million, or 92 cents per share, compared with $472 million, or 54 cents per share, a year earlier. Revenue was $5.41 billion, up 24 percent from $4.37 billion a year earlier.
Apple had been expected to earn $644.4 million, or 72 cents per share, on revenue of $5.29 billion, according to the average analyst forecast on Reuters Estimates.
Gross profit margin was 36.9 percent, up from the 35.1 percent the company achieved in the previous quarter, a show of strength that the company had not predicted.
Chief Financial Officer Peter Oppenheimer told Reuters that component prices and strong direct sales by Apple helped drive the increase in profit margin.
Apple also estimated earnings of about 65 cents per share on revenue of about $5.7 billion for its fiscal fourth quarter.
Apple said it shipped 1.76 million Macintosh computers in the quarter, a rise of 33 percent from a year earlier.
Shipments of iPods were 9.82 million, up 21 percent from the same period a year earlier.
The iPhone went on sale on June 29 but its impact on Apple's results was limited because it was available only in the last two days of the quarter and sales will be booked as subscription revenue over two years.
It sold 270,000 iPhones in the two days.
Sam Rahman, portfolio manager at Baring Asset Management in Boston, said the forecast for 1 million iPhone sales by the end of the first full quarter of sales was "a very big number" and predicted shares would move higher.
Apple shares rose 6.5 percent to $146.13 in after-hours trade from a close of $137.26 on Nasdaq.
Jobs at the beginning of the year set a goal of selling 10 million units in 2008, helping to fuel the stock run-up this year. Oppenheimer reiterated that goal in an analyst call on Wednesday. The shares trade at 30 times its expected 2009 profit, a level most analysts say represents a rich valuation.
Tuesday, July 17, 2007
Novellus' outlook lifts chip-equipment stocks
Pls keep eyes on this group which in my mind will have a great show in this ER season.
hip-equipment stocks surged Tuesday, with Novellus Systems Inc. shares climbing 11% after the company offered a stronger order forecast than analysts had anticipated.
San Jose, Calif.-based Novellus said its bookings for the quarter ending in September would be flat to 5% higher than the three months ended June 30. The forecast pegs its bookings in the range of $316 million to $349 million.
Novellus (NVLS :
NVLS33.03, +3.34, +11.2% ) shares rose $3.34, or more than 11%, to close at $33.03 after reporting on Monday second-quarter earnings and revenue that beat Wall Street analysts' forecasts. Novellus earned $57.3 million, or 45 cents a share, on revenue of $416.3 million, while analysts had forecast Novellus to earn 43 cents a share on $413.13 million in sales.
Other chip-equipment makers followed Novellus north, with Lam Research Corp. (LRCX :
Lam Research Corporation
LRCX59.98, +5.53, +10.2% ) rising $5.53, or more than 10%, to $59.98, Varian Semiconductor Equipment (VSEA :
varian semiconductor equipmnt com
VSEA44.74, +4.03, +9.9% ) up $4.03, or almost 10%, to close at $44.74 and KLA-Tencor Corp. (KLAC :
KLA-Tencor Corporation
KLAC61.78, +5.08, +9.0% ) up $5.08, or almost 9%, to end the day at $61.78 a share.
More signs of market conditions could come this week, with all the companies scheduled to update analysts at Semicon West, the industry's trade show held in San Francisco.
Novellus noted that "several memory chipmakers were in the process of re-evaluating capacity needs, and the results of this analysis could have implications to bookings in the quarter," wrote Deutsche Bank analyst Steve O'Rourke, who maintained his sell rating on Novellus shares.
The direction of industry sales this year and into 2008 likely will be tied to spending for equipment to make DRAM memory chips used in PCs and NAND flash chips, which are used in portable music players, such as Apple Inc.'s iPod.
"More promising signs from NAND flash memory suppliers could be the underlying factor behind Novellus' more optimistic outlook, and these spending trends could emerge sooner than we even anticipated," wrote Stifel Nicholas analyst Patrick Ho, who reiterated his sell rating on Novellus based on market share and valuation concerns.
On Tuesday, semiconductor researcher iSuppli upgraded its near-term rating for DRAM suppliers to neutral, from negative.
It cited signs of increasing market momentum and an end to the severe price erosion that has hammered DRAM makers. DRAM chip prices have plummeted about 70% this year.
Chip-tool providers overall are facing a lull in demand, mostly due to the memory-chip market, with industry-wide sales forecasted to cool this year as electronics makers digest new equipment and weigh new orders.
Researcher Gartner Inc. predicts revenue will rise 2.7% to $43.1 billion after surging 23% in 2006
hip-equipment stocks surged Tuesday, with Novellus Systems Inc. shares climbing 11% after the company offered a stronger order forecast than analysts had anticipated.
San Jose, Calif.-based Novellus said its bookings for the quarter ending in September would be flat to 5% higher than the three months ended June 30. The forecast pegs its bookings in the range of $316 million to $349 million.
Novellus (NVLS :
NVLS33.03, +3.34, +11.2% ) shares rose $3.34, or more than 11%, to close at $33.03 after reporting on Monday second-quarter earnings and revenue that beat Wall Street analysts' forecasts. Novellus earned $57.3 million, or 45 cents a share, on revenue of $416.3 million, while analysts had forecast Novellus to earn 43 cents a share on $413.13 million in sales.
Other chip-equipment makers followed Novellus north, with Lam Research Corp. (LRCX :
Lam Research Corporation
LRCX59.98, +5.53, +10.2% ) rising $5.53, or more than 10%, to $59.98, Varian Semiconductor Equipment (VSEA :
varian semiconductor equipmnt com
VSEA44.74, +4.03, +9.9% ) up $4.03, or almost 10%, to close at $44.74 and KLA-Tencor Corp. (KLAC :
KLA-Tencor Corporation
KLAC61.78, +5.08, +9.0% ) up $5.08, or almost 9%, to end the day at $61.78 a share.
More signs of market conditions could come this week, with all the companies scheduled to update analysts at Semicon West, the industry's trade show held in San Francisco.
Novellus noted that "several memory chipmakers were in the process of re-evaluating capacity needs, and the results of this analysis could have implications to bookings in the quarter," wrote Deutsche Bank analyst Steve O'Rourke, who maintained his sell rating on Novellus shares.
The direction of industry sales this year and into 2008 likely will be tied to spending for equipment to make DRAM memory chips used in PCs and NAND flash chips, which are used in portable music players, such as Apple Inc.'s iPod.
"More promising signs from NAND flash memory suppliers could be the underlying factor behind Novellus' more optimistic outlook, and these spending trends could emerge sooner than we even anticipated," wrote Stifel Nicholas analyst Patrick Ho, who reiterated his sell rating on Novellus based on market share and valuation concerns.
On Tuesday, semiconductor researcher iSuppli upgraded its near-term rating for DRAM suppliers to neutral, from negative.
It cited signs of increasing market momentum and an end to the severe price erosion that has hammered DRAM makers. DRAM chip prices have plummeted about 70% this year.
Chip-tool providers overall are facing a lull in demand, mostly due to the memory-chip market, with industry-wide sales forecasted to cool this year as electronics makers digest new equipment and weigh new orders.
Researcher Gartner Inc. predicts revenue will rise 2.7% to $43.1 billion after surging 23% in 2006
Sunday, July 15, 2007
Market Recap and Anticipation
yet to come on Sunday :)
No surprised at all, we saw Market closed strong on thursday with a amazing 283 points gain which clearly clean out most of the shorts . Folks are all happy but can you really answer why we see such a big rally? How will the market perform in the coming weeks? Good, if you have thought about those questions, better you have got some ideas about why market can rally 283 points a day.
Inside the market, we have found constructive buildings of fundamental. During the time of market break out, we monitored the leading sectors also breakout, especially in Tech sector and Energy Sector. The gas price approachs to the new high, in another sense, supports such a breaktout. That is what we call fundamental supportive breaking out, which is really healthy to the market. Tech sector continue to show strength especially we have seen the performance in INTC/TXN/BRCM/NVDA/SIMO/RIMM/AAPL,all derseve enough attention in coming weeks. With the healthy market condition, ( in our market monitor, short are covering), we would expect another confirmation day will show in the next 7~9 days. What we really need to look at will be the coming OE volatility. However, nothing could stop the market from going higher at this monment.
I don't wanna add too much comments on those promising stuffs, just buy at any dip if you can.
Being ready and being aggressive will be the tone for the next several weeks.
No surprised at all, we saw Market closed strong on thursday with a amazing 283 points gain which clearly clean out most of the shorts . Folks are all happy but can you really answer why we see such a big rally? How will the market perform in the coming weeks? Good, if you have thought about those questions, better you have got some ideas about why market can rally 283 points a day.
Inside the market, we have found constructive buildings of fundamental. During the time of market break out, we monitored the leading sectors also breakout, especially in Tech sector and Energy Sector. The gas price approachs to the new high, in another sense, supports such a breaktout. That is what we call fundamental supportive breaking out, which is really healthy to the market. Tech sector continue to show strength especially we have seen the performance in INTC/TXN/BRCM/NVDA/SIMO/RIMM/AAPL,all derseve enough attention in coming weeks. With the healthy market condition, ( in our market monitor, short are covering), we would expect another confirmation day will show in the next 7~9 days. What we really need to look at will be the coming OE volatility. However, nothing could stop the market from going higher at this monment.
I don't wanna add too much comments on those promising stuffs, just buy at any dip if you can.
Being ready and being aggressive will be the tone for the next several weeks.
Thursday, July 12, 2007
Our view of big market is further confirmed
Any correction will be short and any correction will lead to higher high of the market!:)
Let's drive the last run!!
Let's drive the last run!!
Tuesday, July 10, 2007
Today could mark the first day of distrbution
Today will mark the first day of distribution. Our concerns last weekend has come out. And you may see that those Tech sectors: AAPL,TXN, SNDK, MRVL,BRCM hold well. When those guys hold well, we could expect another rally after this possible run of correction. This will market the last run of correction which could extend to 3% down of the market. However, any correction will , in our eyes, be short term. Just try to switch your postions to those sectors who could rally after that.
Friday, July 6, 2007
Market Short Recap
As we have continously pointed out, we are in bull market. After window dressing, we apparently see that market is under strong accumulation. RIMM, BIDU, BTJ, GOOG, AAPL all lead the market high , also creating NAZ 6 years high. But here you may wanna think about another question, do we reach the top?
Before answering this question, it would be more sense to ask which sector could outperform next better than asking whether the market top. If you watch market closely, will be able to find that Tech sector step out 9% in the second quarter, only 2% behind the energy sector 11%. Therefore we have enough reason to believe that these two sector s will continue to outperform in this coming quarter.
In term of next week, market has pulled out from the oversold region in Window dressing period. Also Our market indicators still point to rally though have been weaken a little bit after NAZ reaches new high.
More to come during this weekend.
To be continued.
Normally we want those leader sectors to confirm each other. However it doesn't show this time, signing a weakness of the market. Based on our experience and projection, another run of correction is possible but not highly possible as we pointed out last time. To avoid any unexpected catch up, in our opinions, focusing on sector in energy, tech and financials could lower the probability of failure in trade. And Not as aggressive as we were since the end of last month.
Several stocks could deserve speculation:
DNDN: this was a old flyers previously, however its recent booming call options and limited downside space may lead to another huge and short rally move.
VSEA: a fundamental solid corp who has been dropping after its sounding er last qt could possibly get another 20% run starting from here.
We recommend to be defensive trading last week , which mean we don't really recommend to get your account exposure more than 70% in the next trading week. Staying away from a risky week will be the best way for general purpose.
Before answering this question, it would be more sense to ask which sector could outperform next better than asking whether the market top. If you watch market closely, will be able to find that Tech sector step out 9% in the second quarter, only 2% behind the energy sector 11%. Therefore we have enough reason to believe that these two sector s will continue to outperform in this coming quarter.
In term of next week, market has pulled out from the oversold region in Window dressing period. Also Our market indicators still point to rally though have been weaken a little bit after NAZ reaches new high.
More to come during this weekend.
To be continued.
Normally we want those leader sectors to confirm each other. However it doesn't show this time, signing a weakness of the market. Based on our experience and projection, another run of correction is possible but not highly possible as we pointed out last time. To avoid any unexpected catch up, in our opinions, focusing on sector in energy, tech and financials could lower the probability of failure in trade. And Not as aggressive as we were since the end of last month.
Several stocks could deserve speculation:
DNDN: this was a old flyers previously, however its recent booming call options and limited downside space may lead to another huge and short rally move.
VSEA: a fundamental solid corp who has been dropping after its sounding er last qt could possibly get another 20% run starting from here.
We recommend to be defensive trading last week , which mean we don't really recommend to get your account exposure more than 70% in the next trading week. Staying away from a risky week will be the best way for general purpose.
Thursday, July 5, 2007
Marvell is doomed to rally ?
Mrvl has steadily corrected its problem with SEC, and with his production line and sale of iphone, this guy should be able to catch the late run of market.
Marvell Tech late Monday filed its fiscal 2007 annual report and several other quarterly securities reports that had been delayed as the chipmaker restated its historical financial results. The company still must file its 10-Q for the first quarter ended April 28 with the Securities and Exchange Commission. It said it plans to do that as soon as possible.
As expected, Marvell Tech (MRVL :
marvell technology group ltd ord
N booked a noncash stock compensation charge of $327.4 million.
The filings helped eased the concerns of investors. Marvell Tech shares rose 1% to $18.32 in trading Tuesday. The stock is down 4% so far this year.
"We believe the much-delayed financial restatement is a big step toward helping investors finally move on," wrote Stifel Nicolaus analyst Cody Acree, who rates the stock a buy.
Based in Santa Clara, Calif., Marvell Tech designs chips used in hard disk drives, mobile phones, Wi-Fi functional electronics and Internet networking gear.
Its largest customers are Western Digital Corp. (WDC :
Western Digital Corporation
Toshiba Corp. , and Samsung Electronics Co. (SSNGY :
SSNGY
which account for 39% of Marvell Tech's total revenue.
The restated financial statements did raise some concerns.
Craig Berger, analyst at Wedbush Morgan Securities, said Marvell Tech's annual results were "a bit worse" than he had estimated in terms of gross margin and operating expenses, excluding stock-based compensation costs. He reiterated his hold rating on the stock.
Marvell Tech is one of the chipmakers tapped by Apple Inc. for its new iPhone. The company is contributing the Wi-Fi chip that costs $6. End of Story
Marvell Tech late Monday filed its fiscal 2007 annual report and several other quarterly securities reports that had been delayed as the chipmaker restated its historical financial results. The company still must file its 10-Q for the first quarter ended April 28 with the Securities and Exchange Commission. It said it plans to do that as soon as possible.
As expected, Marvell Tech (MRVL :
marvell technology group ltd ord
N booked a noncash stock compensation charge of $327.4 million.
The filings helped eased the concerns of investors. Marvell Tech shares rose 1% to $18.32 in trading Tuesday. The stock is down 4% so far this year.
"We believe the much-delayed financial restatement is a big step toward helping investors finally move on," wrote Stifel Nicolaus analyst Cody Acree, who rates the stock a buy.
Based in Santa Clara, Calif., Marvell Tech designs chips used in hard disk drives, mobile phones, Wi-Fi functional electronics and Internet networking gear.
Its largest customers are Western Digital Corp. (WDC :
Western Digital Corporation
Toshiba Corp. , and Samsung Electronics Co. (SSNGY :
SSNGY
which account for 39% of Marvell Tech's total revenue.
The restated financial statements did raise some concerns.
Craig Berger, analyst at Wedbush Morgan Securities, said Marvell Tech's annual results were "a bit worse" than he had estimated in terms of gross margin and operating expenses, excluding stock-based compensation costs. He reiterated his hold rating on the stock.
Marvell Tech is one of the chipmakers tapped by Apple Inc. for its new iPhone. The company is contributing the Wi-Fi chip that costs $6. End of Story
Tuesday, July 3, 2007
The Close of today will determine sth
Now the window dressing is over, and as we pointed out before, those fund managers need to sell their holding and bought it back yesterday, the first trading day. Today will be a second day for confirmation of rally yesterday. More important , today 's close will further assure that they will buy back the share they sell. We need to be more courageous to hold and buy into this trend.
Monday, July 2, 2007
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