Tuesday, January 12, 2010
ENTANGLING TERRAIN
Notice I have changed the BATTLEFIELD TERRAIN to “entangling” again, just as it was before the Christmas week breakout. We had a nice rally to end the last and start the new year but now we are side stepping a little. We were able to take advantage of the move with our plays over the last two weeks, closing them all out except for two. One of the remainder I closed today for a small profit. The other was bruised today with the general market but still stands a chance to work. As we have discussed, this is options expiration week in a market that may be overheated. Add to that a sour note from AA to kick off earnings season and you have a recipe for possible consolidation. The keyword again is patience as we wait for the next possible trade opportunities. There may be some up, some down, or none at all. Whatever the market is willing to give we will be willing to take. Just not willing to enter into any new trades here as the market works through a little anger management.
THE MARKET IS NOT YOUR FRIEND
One of the stocks I watch, CRM, hit the Street with some negative news after the close last night. CRM is taking on some debt through the issuance of senior convertible notes. Keyword here is DEBT. CRM dropped over $5 on the news today, giving back in one day what it had gained in over 10. News is news and can affect any stock one way or the other but what is of interest is the analyst upgrades for CRM over the last week. Deutsche Bank raised their target on CRM on January 6 to $100. Wedbush did the same the day before, raising its target price to $85. I wonder how many investors bought the stock on this recommendation? Not saying CRM cannot recover and soar higher, because it can. Take a look at AAPL. Nothing but bullishness for this stock with all the news swirling around about all the new products and earnings right around the corner, yet AAPL has been falling hard the last few days, dropping from $215 a few days ago to $207 today. Not saying AAPL cannot recover and push past the $215 mark. What I am saying is that no matter how many analysts are bullish or bearish on a stock (as is the case for CRM and AAPL), traders and their collective reaction and/or expectation of the news have the final say. Just look to CRM and AAPL as prime examples.
BATTLES WON (PROFIT TARGETS HIT):NONE
BATTLES LOST (LOSS TARGETS HIT): NONE
SURRENDERED (TRAILING STOP HIT): MDR
NO NEW ENTRIES TODAY.