Short Week for the Market but A Long Week in School... Google Looking Good

I have not been blogging lately because I have all of my school finals this week. I will try to blog as much as I can, but can't promise anything. This week being a short trading week I may not have posted too much anyway. Today was an ugly day for the bulls, but the good news is volume was lighter. Today I added to my long term portfolio and bought some shares of Google. With GOOG reporting next week it may have been my last chance to get them below 400 a share. I think Google will beat numbers, because the numbers have been revised so low, that it should be an easy beat for GOOG. On the other hand I didn't buy as many shares of Google as I could, because if they miss we could see Google back around 300 a share, and I saved some money to buy more if that happens.

I have a website I run for my family business Golden Age Cheese Co. and I paid Google more this year than any year previous year for click costs (as well as Yahoo and MSN for that matter). Sales were down, clicks were slightly higher (this is because during recessions people find alternate ways of entertainment such as: playing video games, watching TV, and surfing the web... If more people search the web using Google this will reflect in Google's quarter- another reason I think they'll beat), but the price per click was higher; this is because the Internet space is still growing, and the bid per click is increasing. Many analysts leave the increasing cost per click out of the picture. The sponsored keyword market (these are the sponsored results Google puts on the right hand side- an easy and guaranteed way for any business to get to the first page of search results if they bid enough $ per click) is a giant auction where businesses compete by offering a higher bid for each keyword. In 2001 I was top bidder on the keyword cheese for 10 cents a click... I bet I couldn't touch that keyword now for under $1 a click. This is one way Google will be able to continue to grow their profits in the years to come. I am very bullish on Goog! The low end estimate is $4.61 per share and the high end estimate is $5.36 per share with the consensus being at $4.98 per share. Google's last quarter earnings were $5.10 per share. The chart below shows that Google has resistance at around 380 per share, and with a good earnings report and help from the market that should be an easy short term price for Google. If we can break Google above 380 we can see next resistance at around 410 and then around 450 per share. However on the downside if Google breaks below 335 per share which could easily happen with a bad report, we could see Google back down to around 290 per share (click on the chart to get a larger more clear picture).




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Palm Still on FIRE! Update to Palm Pre Release Date and Pricing Information

Palm continues to show strength as it is approaching $10 per share. Today Palm had a little help from the great earnings report from Research In Motion (RIMM) last night. However my prediction on Palm to release more info on the PRE phone by today did not happen. The street is still very excited about this device, as the price per share has soared over 56% since the market opened on March 10, 2009. Today Palm made a fresh 52 week high at $9.69 a share and signals are still very bullish! The Bull/Bear ratio on Palm is 10:2 (for more info see my Bull/Bear ratio defined post on my hottest blog posts), with the two bearish statistics being CVAD, and Stochastic(5). Looking at the options market for Palm, there is a 30% chance we'll see palm over $11 per share by April expiration! 1799 April 10 Call contracts traded for Palm today at $35-$60 per contract, and 287 April 11 Call contracts traded for Palm today at $20-$25 per contract. There are just 15 days (less non trading days) left until these contracts expire! Another extremely bullish sign on Palm.

I received an email from Palm yesterday announcing a glimpse at some upcoming apps for the new Palm Pre, so I have to believe that the phone pricing and release date information will be made public soon! Below is a picture of the phone with the applications, and here is the text taken directly from the email about these new applications: "FlightView, which features built-in notifications so you know when your flight’s delayed. Or Fandango, which lets you buy movie tickets from your Palm Pre phone and add the times right to your calendar. Call it webOS integration or call it thinking ahead. Either way, it’s a beautiful thing."



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Update to Visa April Trading Strategy on March 20, 2009

Quick UPdate: I just lightened up on my Visa contracts for the April expiration and I have already made profit on the entire deal. I also have some contracts left and I have until the April expiration to possibly make some more profit. I just repurchased my April 65 Call options back (buy to close after I sold them to open them on March 20) for $30 a contract (a loss of $20 per contract), but I sold my Visa 62.50 April Calls for $100 a contract (a gain of $75 per contract). Therefore the net gain is $55 per contract. I had to sell into this strength, but Visa still looks like a BULL and looks like it may even breakout to the 62-64 area.



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One of My Methods to Finding Bullish Stocks

I have defined what the Bull to Bear ratio is, now I will define another method of how I find strong stocks. It is through Investor's Business Daily and requires a membership and some idea of strong stocks before hand. One great feature of this site is that every day there is an updated list of "stocks on the move" both up and down. The "stocks on the move" ranks 5 stocks being BOUGHT/SOLD heavily by institutional investors. This is a great way to find strong and weak stocks on a daily basis.

IBD ranks over thousands of stocks, they do not rank ETF's. Let's say you want to see what Google ranks, you'd enter GOOG into the "evaluate stocks" tab and it will return a score known as the "composite rating". To get a more detailed list you'll need to click on the ticker symbol after "quick ratings for (GOOG in this case), or for a more detailed report click "go to Full Stock Checkup". They will give a score for each of 5 categories defined below and a composite score.

Now for the method IBD uses to rank stocks. (all descriptions below are taken directly from the IBD website)

Composite Rating: The IBD SmartSelect Composite Rating combines all 5 SmartSelect® Ratings into one easy-to-use rating. More weight is placed on EPS and RS Rating, and the stock's percent off its 52-week high is also included in the formula. Results are then compared to all other companies, and each company is assigned a rating from 1-99 with 99 being the best. A 90 rating means that the stock has outperformed 90% of all other stocks in terms of its combined SmartSelect Ratings."

EPS Rating: Exclusive rating found in Investor’s Business Daily's SmartSelect® Corporate Ratings. Stocks are rated on a 1 to 99 scale (with 99 being best) comparing a company’s earnings per share growth on both a current and annual basis with all other publicly traded companies in the William O’Neil + Co database. Stocks with EPS Ratings of 80 or above have outperformed 80% of all publicly traded companies in earnings. The EPS Rating combines each company’s most recent two quarters of earnings-per-share growth with its three- to five-year annual growth rate.

RS Rating:This IBD SmartSelect® Corporate Rating is a measure of a stock’s price performance over the last twelve months, compared to all stocks in our database.

The rating scale ranges from 1 (lowest) to 99 (highest).

Initial Public Offering (IPO) stocks will be assigned a “1” rating until the data from five trading sessions are available for calculation.

Group RS Rating: A measurement of a stock's industry group performance over the past six months utilizing A+ to E scale. All 197 groups are combined and distributed into 13 rating groupings: 12 of near equal size and one comprised of industry groups with "E".

SMR Rating: A proprietary rating pioneered by Investor's Business Daily to help investors identify companies with superior Sales Growth, Profit Margins, and Return on Equity ratios.

The SMR Rating data item is one of five Investor's Business Daily SmartSelect® Corporate Ratings. This data item combines into one simple "A" to "E" rating system, four fundamental factors used by analysts:

Accumulation/Distribution Rating (Acc/Dis Rating): Exclusive rating in Investor's Business Daily. One of the IBD SmartSelect® Corporate Ratings, it tracks the relative degree of institutional buying (accumulation) and selling (distribution) in a particular stock over the last 13 weeks. Updated daily, stocks are rated on an A+ to E scale.

A = Heavy buying
B = Moderate buying
C = Equal amount of buying and selling
D = Moderate selling
E = Heavy selling

The rating is enhanced by "+" and "-" signs to show additional detail on institutional activity; a "B+" indicates greater accumulation than a "B" rating, whereas a "B-" indicates less accumulation than a "B" rating, and so on.

Above are the 6 rankings IBD uses, and have allowed me to know when is a good time to buy and sell a stock. Although IBD charges an annual fee it is much cheaper and accurate, in my opinion, than many other quantitative analysis sites I've come across.

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U.S. Stock Market Plays an April Fool's Joke on Everyone

Since early last night the futures were down significantly, and this morning we opened very low on horrible ADP data. However the market turned around shortly after 10 AM and went positive and actually finished the day very positive. A very nice way to start off the quarter indeed! With tomorrow's decision coming out about suspending mark-to-market accounting it will certainly be a game changer for the market. I have a feeling we'll see this rule suspended and have a very nice rally, however you may want to lighten up ahead of Friday's profit taking and March unemployment number. I may buy back some SDS or BGZ (double and triple leveraged short ETF's) if we get a rally and sell into any weakness on Friday or next week. But if we do not get this mark to market accounting rule suspended, I will not be buying SDS or BGZ, and if I do end up getting either of them I will set a tight stop loss on them, in case market continues to rally on Friday.


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How to Fix Upside Down Videos on Youtube for April Fool's Day

Today for April Fool's Day Youtube decided to be funny and flip the screen upside down for the featured videos. It is an easy fix and all you have to do is fix the URL a little bit Here is an example of a URL that is flipped: http://www.youtube.com/watch?v=zLCtY4fm3us&feature=rec-HM-r2&flip=1 all you need to do to get the video restored is take out the "flip" part of the URL after div& so the new URL is http://www.youtube.com/watch?v=zLCtY4fm3us&feature=rec-HM-r2&=1

Very creative by Youtube and I do have to say it got me. Thought I might just share the way to fix it in case it was driving you nuts!

Happy April Fool's Day!



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