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Wednesday, July 30, 2014

$twtr still not overbought on the weekly charts

Interestingly enough, this big move has not put twtr in an overbought condition via the weekly oscillators. And sentiment seems fairly calm. 

Makes one think the move is sustainable, due to an increasing positive sentiment. 

Market Cap. now stands at $27B. Still very reasonable considering the growth we saw yesterday. (And in relation to WhatsApp purchase price.)

Tuesday, July 29, 2014

$twtr - twwwoooowwww

Numbers were pretty good. Revenue beat. User growth beat. Gross Margins at highs.

My only rubs: 

1. FB produced an 84% GM this past quarter, and consistently produces +70% GM. TWTR should be in a similar position. 

2. Operating Margin losses to decline faster.

twtr will be testing the 50 level resistence, if action holds.

Thursday, July 24, 2014

$amzn GM at highs, and clockwork

The gross margins are at highs, and the rest is business as usual.

The market seems to not like it this quarter. (3rd quarter in a row where aman sold off.)

The stock is approaching level of interest again. Looking for 325-330. (Also, from a growth, reach and market cap perspective, and the market cap is too low.)

Jobless claim at 8yr low. Somehow low rates are still justified.

Wednesday, July 23, 2014

$yhoo buyout speculation or technicals

Either the stock is reacting to a Forbes buyout article or its bouncing from its low channel range.

Tuesday, July 22, 2014

$aapl margins continue to improve and cash spikes

Looks like management buys back smartly.

Looking to add on weakness, via oversold conditions, to capture the run-up into the new product launch. Probably around mid 92.

Thursday, July 17, 2014

$googl report not that good

The report was decent. Not sure it justifies the +30 multiple for a +$340B company. The paid clicks and cpc were nothing special. 

Revenue growth is 13% yr-yr. (I see chatter simply cherry picking search revenue growth.) The one metric that MAY justify a higher multiple, is the faster growing operating income. It is growing 36% yr-yr, but most of this growth is due to the supressed income Motorola caused. (Normalizing for Motorola, growth is about 6-7%.)

Still trying to figure out why Google is allowed to have such a high multiple while growth is / has slowed, and much of there "initiatives" have little prospect for adding legitimate business lines.

For a mega cap stock, a multiple of 20-25 is considered pretty large. (But mega caps usually have capital allocation programs, making their cash productive. Google does not have such allocations.)

Better econ data, rates up. No, down. $tnx $spy

Nice jobless claim number and Fed survey. Keeps the narrative of a very healthy US economy. Better economy means higher or at the very least steady treasury interest rates, or so one would logically think.

Nope. Declines.

The housing number was off, but I believe that is more of a consequence to the difficulty in obtaining a mortgage. (The criteria now has become very detrimental to home own ship.)

Regardless, somehow this will be justified. But I'm still puzzled by it. Unless the treasury is the only market reflecting the true uncertainties around current geopolitical events. (See 'Market Thought... catalyst' post below.)

Wednesday, July 16, 2014

$bac book value rises

Tangible book: 14.24

Book value: 21.16

Stock price: 15.70 (as of current pre-market)

Once litigation concerns are behind them, the stock will start to appreciate to the 20s. For now, we wait.

Monday, July 14, 2014

$yhoo target revenue

To show the street yhoo is growing again, it needs revenue greater than $1.135B.

The street is currently expecting $1.08B.

IMO, if yhoo does anywhere between 1.08-1.135 the stock's reaction will be blah.

If it can show growth, the reaction will probably be +9%.

$yhoo and $aol

Never been a fan of the AOL / Yahoo chatter. I would rather see Yahoo focus on local search and acquire Yelp with its BABA cash. 

Despite the nice web properties Aol has accumulated and nourished over the years, the only aspect of an Aol / Yahoo merger that would make sense to me is Aol's unique video views.

A combined company would theoretically produce a unique audience that would come just behind Google, and may provide YouTube with some needed competition. (Although the below is missing mobile-share.)

Thursday, July 10, 2014

Market Thought... $spy dynamic

The SP500 got the bounce off of the 28sma on the daily. But the 5sma on the weekly is breaking.

Suggest the 14sma will be seen, along with the continued hugging of the 5sma of the monthly.

$spy catalysts

1. Greek debt did not spark good demand.

2. ISIS now has chemical weapons. Potentially setting up a scenario for a multi-lateral response from the UAL (what's left of it), G7 or NATO.

3. Israeli - Palistine conflict escalating. (Not new, but this tit-for-tat involving children is gut wrenching to watch.)

4. US job market is in a positive cycle. (Jobless claims, again, were very good.) signaling higher US interest rates sooner-rather-then-later.

5. Russia

6. The unknown. Geopolitical flare up has been very high over the last few years. Just feels like we are in a scenario where anything can flare up. 

Wednesday, July 9, 2014

Tale of two charts $tnx $spy

Fed will end bond purchase near Oct. and a strengthening economy over the next two years. Market reaction, buy teasuries?!?

Whatever is causing the buying in the treasuries has the opposite effect on equities.

Oh Ms Market, your complexities mesmerize me. 

Tuesday, July 8, 2014

Market Thought... riding high

Complacency is back to pre-crisis lows, although the vix has climbed over the other day.

The trajectory of this market is pretty clear.

Looking under hood, and there was obvious multiple expansion. The below graph highlights the expansion. (Because the market is forward looking, the below graph depict the forward quarter's SP500 PE. IMO, it shows how the SP500 adjusts with estimate revisions. The actual trailing multiples are higher.)

The June and Sept quarters are predicated on estimate as of July 1st. (Fyi, estimates have declined, but the markets have not yet adjusted for it.)

Below is the SP500 range as per the above PEs.

All the charts relate nicely. The low end ranges are supported by techical moving average supports.


A decent pull back gets the sp500 to the 5sma on the monthly chart (~1920).

A harecore pull back gets the sp500 around 1880. (Via horizantal support from the daily chart below.)

A continued push higher gets the sp500 past 2000, but that assumes sept estimates hold and the market does not start to discount rate increases. (Basically maintaining the trajectory dynamic of expanded multiple and neatly following the 5sma on the monthly.)

I am in the pull back camp, but not one that damages the trend structure. There is too much geopolitical uncertainty for the level of the Vix, and the US economy is acting too well for continued depressed rates.

Friday, July 4, 2014

Trades - $amzn $bac $fxi $yhoo

Looking to breach its resistance. 


bac (daily breached, wkly and mnthly awaits)

fxi approaching a long term resistance. 

yhoo looking to push toward the upper channel of its trading dynamic. 

Thursday, July 3, 2014

Very good jobs number, why are rates still at historic lows?

The jobs picture is officially better then then the pre-crisis. (Nice chart from Quartz)

Unemployment continues to decline and about to breach 6%. That's awesome.

The Fed has used other metric to somewhat dismiss the improved and improving jobs picture, but the simple fact is that more Americans are working. And the trend is clearly in a good direction, and has been for some time.

Even GDP is not matching well with the decline in treasury rates. 

When will the data begin to matter to the Fed?