Prism Morning Call 10-12-09
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2385 Executive Center Drive, Suite 400 • Boca Raton, Florida 33431 Phone: (561) 922-5266 • Fax: (561) 623-6235
CURRENT MARKET SENTIMENT A brawling fight on Friday, yet one that was worth it! The market closed at New Year high of 9864/1071 Dow and S&P respectively, a long awaited accomplishment. With a plethora of economic numbers coupled with earnings season, there are many catalysts for Dow 10,000. To name a few: FOMC Minutes, Initial Claims, Philadelphia Fed, Capacity Utilization, Industrial Production, Michigan Sentiment-Prel. With the Columbus Day Holiday, light volume may help push the Dow closer to the year high of 9937 and within a striking distance of the goal post. However, the down side should be limited to the weekly pivot of 9736/1056. If the focus this time around is the bottom-line, expect volatility. The upward march so far has been the unexpected, crawling tiger.
ECONOMIC NUMBERS AND DATA Time (ET)
Indicator
Date
Actual
Expectation
Range
Prior
-
NONE TODAY
-
-
-
-
-
TECHNICAL Indices
S2
S1
Pivot
R1
R2
INDU (DOW)
9731
9769
9831
9892
9930
SPUZ (S&P)
1060
1063
1068
1073
1077
DOW STOCK TO WATCH Strong IBM
Weak TRV
HPQ
MCD
CVX
T
JNJ
AXP
MARKET HIGHLIGHTS 10/12/2009
PRISM CALL
Columbus Day light volume, yearly high and positive outlook in earnings, All this is pointing the future to be higher and the Dow to move up. We are very likely to come close to 10,000. Don’t stand in front of freight train. Looks for leaders, upgrades and positive comments to enter trades. Ride your winners since the market may not come down in low volume.
Page |1 RISK DISCLAIMER: There is a very high degree of risk involved in trading equities. Trading is not for every investor and only risk capital should be used. Past results are not indicative of future returns. Prism Trading School, LLC (“Prism”) and all individuals affiliated with Prism assume no responsibilities for your trading and investment results. The indicators, strategies, articles and all other features are for educational purposes only and should not be construed as investment advice. Any person who chooses to use this information as a basis for their trading assumes all the liability and risk for themselves and hereby and absolutely agrees to indemnify and hold harmless Prism, its principals, agents and employees. All of the material contained herein is believed to be correct, however, Prism will not be held responsible for accidental oversights, typos or incorrect information from sources that generate fundamental and technical information. Prism does not warrant the completeness or accuracy of such information, and does not warrant any results from the use of the information. Your use of Prism materials is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade and make your own independent decisions regarding any securities mentioned herein. Prism affiliates may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.
COMMODITY PRICES Commodity
Price
OIL
73.10
1.33
GOLD
1056
7.40
FOREIGN MARKETS Market
Price
FTSE
5222.12
60.25
1.17
DAX
5800.51
88.63
1.55
HANG SENG
21299.35
NIKKEI
10016.39
CHINA
2894.48
-
%
200.09
-0.93
UNCH
0
17.232
-0.59
Page |2
UPGRADES / DOWNGRADES Stocks Upgraded JP Morgan upgrades Kroger (KR 22.31) to Overweight from Neutral and raises their tgt to $27 from $21 UBS upgrades Amgen (AMGN 59.42) to Buy from Neutral UBS upgrades Advanced Micro Devices (AMD 5.88) to Buy from Neutral JP Morgan upgrades Plum Creek Timber (PCL 31.84) to Neutral from Underweight Wells Fargo upgrades Infosys (INFY 47.74) to Market Perform from Underperform Societe Generale upgrades Alcatel-Lucent (ALU 4.70) to Hold from Sell Credit Suisse upgrades Grainger (GWW 90.74) to Outperform from Neutral Suisse upgrades MasterCard (MA 214.42) and Visa (V 72.94) to Outperform from Neutral GWW WW Grainger upgraded to Buy from Hold at BB&T Capital Mkts (90.74 ) ESE Esco Tech upgraded to Buy from Hold at BB&T Capital Mkts (38.58 ) AEO American Eagle upgraded to Positive from Neutral at SRE Sempra Energy upgraded to Buy at Jefferies & Co; tgt raised to $60 (52.12 ) Susquehanna Financial (18.36 )
Stocks Downgraded OXY Occidental Petro downgraded to Hold at Citigroup; tgt raised to $82 (79.54 ) UBS downgrades SanDisk (SNDK 21.44) to Sell from Neutral Weisel downgrades Dreamworks (DWA 33.87) to Market Weight from Overweight Suntrust downgrades Anadarko Petroleum (APC 67.39) to Neutral from Buy based on valuation... LMT Lockheed Martin downgraded to Neutral from Outperform at Cowen (75.82 )
Page |3
NEWS ALERT DFS Discover Financial Services: Use weakness in credit card issuers on Friday as a buying opportunity as the FDIC is unlikely to disrupt ABS markets - FBR Capital (16.20 ) VPHM ViroPharma: Potential competitor in HAE receives FDA approval ThinkEquity (9.80 ) New chief of Patent Office takes aim at a massive backlog – WSJ DYAX Dyax: CSL Behring gets approval with narrower label than expected ThinkEquity (3.38 ) DT Deutsche Telekom Officer says doesn't see further US consolidation; want US organic growth - DJ (13.69 ) Dollar reaches breaking point as banks shift reserves - Bloomberg.com ORLY O'Reilly Auto added to US Focus List at Credit Suisse (34.18 ) FBR Capital's unemployment survey: Buy-side turns more optimistic North Korea fires two short-range missiles off east coast, according to Yonhap – Reuters JCI Johnson Controls removed from Conviction Sell list at Goldman; keeps Sell rating- Reuters (26.89 ) EL Estee Lauder added to Conviction Sell list at Goldman- Reuters (39.68 ) UK govt plans asset sales to cut debt burden – WSJ GOOG Google tgt raised to $600 at Kaufman; expects upside and neutral to positive reaction to 3Q results European market summary; FTSE hihger led by oil majors : FTSE +1.09%, CAC +1.2%, DAX +1.41% Asia markets summary; HK and Shanghai down on profit taking: Shanghai Composite -0.59%, Hang Seng -0.93%, Sensex +384 pts KBH KB Home discloses in Form 10-Q that SEC is investigating the co (16.46 ) Fed's Bullard: Don't underestimate inflation risk – Reuters BX Blackstone plans portfolio IPOs: Source - Reuters (14.85 ) MHP McGraw-Hill mentioned positively in Barron's (27.28 )
Page |4
NEWS ALERT X U.S. Steel mentioned negatively in Barron's (43.85 ) CEG Constellation Energy Nuclear joint venture receives U.S. Nuclear Regulatory Commission approval (32.96 +0.34) Democrats weigh tax on financial transactions – WSJ ARNA Arena Pharm's Lorcaserin to be featured in multiple presentations at obesity 2009 (4.21 ) OSK Oshkosh Truck awarded additional 923 M-ATVs valued at $408.5 million (33.59 ) GOOG Google: Thomas Weisel raises their tgt on Google to $620 from $530 Reuters (516.25 ) –Update Crude oil is now up $1.62 to $73.39. Nat gas is up 15.8 cents to $4.928. Gold is higher by $7.60 to $1056.20 and silver has gained 23.5 cents to $17.925 BDK Black & Decker sees Q3 EPS of $0.91 (vs consensus of $0.45), up from the previous range of $0.35-$0.45; now expects to report a sales decline of 23% and operating margin of approximately 7.5% for the qtr
Page |5
CURRENT MARKET SENTIMENT A brawling fight on Friday, yet one that was worth it! The market closed at New Year high of 9864/1071 Dow and S&P respectively, a long awaited accomplishment. With a plethora of economic numbers coupled with earnings season, there are many catalysts for Dow 10,000. To name a few: FOMC Minutes, Initial Claims, Philadelphia Fed, Capacity Utilization, Industrial Production, Michigan Sentiment-Prel. With the Columbus Day Holiday, light volume may help push the Dow closer to the year high of 9937 and within a striking distance of the goal post. However, the down side should be limited to the weekly pivot of 9736/1056. If the focus this time around is the bottom-line, expect volatility. The upward march so far has been the unexpected, crawling tiger.
ECONOMIC NUMBERS AND DATA Time (ET)
Indicator
Date
Actual
Expectation
Range
Prior
-
NONE TODAY
-
-
-
-
-
TECHNICAL Indices
S2
S1
Pivot
R1
R2
INDU (DOW)
9731
9769
9831
9892
9930
SPUZ (S&P)
1060
1063
1068
1073
1077
DOW STOCK TO WATCH Strong IBM
Weak TRV
HPQ
MCD
CVX
T
JNJ
AXP
MARKET HIGHLIGHTS 10/12/2009
PRISM CALL
Columbus Day light volume, yearly high and positive outlook in earnings, All this is pointing the future to be higher and the Dow to move up. We are very likely to come close to 10,000. Don’t stand in front of freight train. Looks for leaders, upgrades and positive comments to enter trades. Ride your winners since the market may not come down in low volume.
Page |1 RISK DISCLAIMER: There is a very high degree of risk involved in trading equities. Trading is not for every investor and only risk capital should be used. Past results are not indicative of future returns. Prism Trading School, LLC (“Prism”) and all individuals affiliated with Prism assume no responsibilities for your trading and investment results. The indicators, strategies, articles and all other features are for educational purposes only and should not be construed as investment advice. Any person who chooses to use this information as a basis for their trading assumes all the liability and risk for themselves and hereby and absolutely agrees to indemnify and hold harmless Prism, its principals, agents and employees. All of the material contained herein is believed to be correct, however, Prism will not be held responsible for accidental oversights, typos or incorrect information from sources that generate fundamental and technical information. Prism does not warrant the completeness or accuracy of such information, and does not warrant any results from the use of the information. Your use of Prism materials is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade and make your own independent decisions regarding any securities mentioned herein. Prism affiliates may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.
COMMODITY PRICES Commodity
Price
OIL
73.10
1.33
GOLD
1056
7.40
FOREIGN MARKETS Market
Price
FTSE
5222.12
60.25
1.17
DAX
5800.51
88.63
1.55
HANG SENG
21299.35
NIKKEI
10016.39
CHINA
2894.48
-
%
200.09
-0.93
UNCH
0
17.232
-0.59
Page |2
UPGRADES / DOWNGRADES Stocks Upgraded JP Morgan upgrades Kroger (KR 22.31) to Overweight from Neutral and raises their tgt to $27 from $21 UBS upgrades Amgen (AMGN 59.42) to Buy from Neutral UBS upgrades Advanced Micro Devices (AMD 5.88) to Buy from Neutral JP Morgan upgrades Plum Creek Timber (PCL 31.84) to Neutral from Underweight Wells Fargo upgrades Infosys (INFY 47.74) to Market Perform from Underperform Societe Generale upgrades Alcatel-Lucent (ALU 4.70) to Hold from Sell Credit Suisse upgrades Grainger (GWW 90.74) to Outperform from Neutral Suisse upgrades MasterCard (MA 214.42) and Visa (V 72.94) to Outperform from Neutral GWW WW Grainger upgraded to Buy from Hold at BB&T Capital Mkts (90.74 ) ESE Esco Tech upgraded to Buy from Hold at BB&T Capital Mkts (38.58 ) AEO American Eagle upgraded to Positive from Neutral at SRE Sempra Energy upgraded to Buy at Jefferies & Co; tgt raised to $60 (52.12 ) Susquehanna Financial (18.36 )
Stocks Downgraded OXY Occidental Petro downgraded to Hold at Citigroup; tgt raised to $82 (79.54 ) UBS downgrades SanDisk (SNDK 21.44) to Sell from Neutral Weisel downgrades Dreamworks (DWA 33.87) to Market Weight from Overweight Suntrust downgrades Anadarko Petroleum (APC 67.39) to Neutral from Buy based on valuation... LMT Lockheed Martin downgraded to Neutral from Outperform at Cowen (75.82 )
Page |3
NEWS ALERT DFS Discover Financial Services: Use weakness in credit card issuers on Friday as a buying opportunity as the FDIC is unlikely to disrupt ABS markets - FBR Capital (16.20 ) VPHM ViroPharma: Potential competitor in HAE receives FDA approval ThinkEquity (9.80 ) New chief of Patent Office takes aim at a massive backlog – WSJ DYAX Dyax: CSL Behring gets approval with narrower label than expected ThinkEquity (3.38 ) DT Deutsche Telekom Officer says doesn't see further US consolidation; want US organic growth - DJ (13.69 ) Dollar reaches breaking point as banks shift reserves - Bloomberg.com ORLY O'Reilly Auto added to US Focus List at Credit Suisse (34.18 ) FBR Capital's unemployment survey: Buy-side turns more optimistic North Korea fires two short-range missiles off east coast, according to Yonhap – Reuters JCI Johnson Controls removed from Conviction Sell list at Goldman; keeps Sell rating- Reuters (26.89 ) EL Estee Lauder added to Conviction Sell list at Goldman- Reuters (39.68 ) UK govt plans asset sales to cut debt burden – WSJ GOOG Google tgt raised to $600 at Kaufman; expects upside and neutral to positive reaction to 3Q results European market summary; FTSE hihger led by oil majors : FTSE +1.09%, CAC +1.2%, DAX +1.41% Asia markets summary; HK and Shanghai down on profit taking: Shanghai Composite -0.59%, Hang Seng -0.93%, Sensex +384 pts KBH KB Home discloses in Form 10-Q that SEC is investigating the co (16.46 ) Fed's Bullard: Don't underestimate inflation risk – Reuters BX Blackstone plans portfolio IPOs: Source - Reuters (14.85 ) MHP McGraw-Hill mentioned positively in Barron's (27.28 )
Page |4
NEWS ALERT X U.S. Steel mentioned negatively in Barron's (43.85 ) CEG Constellation Energy Nuclear joint venture receives U.S. Nuclear Regulatory Commission approval (32.96 +0.34) Democrats weigh tax on financial transactions – WSJ ARNA Arena Pharm's Lorcaserin to be featured in multiple presentations at obesity 2009 (4.21 ) OSK Oshkosh Truck awarded additional 923 M-ATVs valued at $408.5 million (33.59 ) GOOG Google: Thomas Weisel raises their tgt on Google to $620 from $530 Reuters (516.25 ) –Update Crude oil is now up $1.62 to $73.39. Nat gas is up 15.8 cents to $4.928. Gold is higher by $7.60 to $1056.20 and silver has gained 23.5 cents to $17.925 BDK Black & Decker sees Q3 EPS of $0.91 (vs consensus of $0.45), up from the previous range of $0.35-$0.45; now expects to report a sales decline of 23% and operating margin of approximately 7.5% for the qtr
Page |5
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