Market Rap 9.November.2009

The risk on trade was
on. Stocks strong, dollar weak as
gold keeps shining on.

S&P 500 - Daily

Spot Gold - Daily

Meanwhile, back at the office, I am convinced the internet is here to stay and is not going out of style anytime soon. As this profound thought struck me earlier today, I decided to have a call with my collaborators. They all agreed with my assessment. Then we shared some news of interest. I walked away with the following:

Some good info out of Fast Money today:

–Tim Seymour sees diversification away from US dollar to continue. He thinks the Dollar sees 75 before it sees 78. I agree that 75 is an important support level. If it breaks down further from here, It should find support at 75.

– Re: Google (GOOG) earnings this week. Upgrades around the table into the number after the bell Thursday. Analyst Christa Quarles from Weisel gave Google a $620 target. Joe T. mentions pay per click stabilization an important metric.

–Analyst Berger-former analyst at INTC, then Wedbush Morgan–thinks Intel goes higher after the number tomorrow afternoon because of “double reverse psychology.” My opinion: INTC is a tough call into earnings. My indicators say it peaked as it hit a high of $28.65 both today and August 28th. Demand leading up to today’s high has been much weaker than demand was leading up to the August 28th high, according to my calculations. That said, I appreciate the concept of “double reverse psychology,” and it’s potential ramifications.

–Doug Kass is the most bearish he has been and he nailed the bottom in March. The hot hand is the hot hand. Life works in streaks. Doug’s voice should be a loud alarm. After all: there were very few bulls in March. I was not. My notes from the march era are right here on these pages. I nailed the short in 2008, but I was not bullish in March. It was tough to nail the market both ways.

–There was a segment on Fast Money called “Double Down.” It’s good to see some coverage of money management as it pertains to trading. Along with position sizing, money management is an extremely misunderstood topic. It is good to see the media covering some aspect(s) of it.

In addition, I also note:

Robert Prechter

Prechter is bearish. He is the other hot hand. Kass called the fundamentals, Prechter called the technicals. Both of them are bearish here.

Whitney Cuts Goldman

As I reported earlier, Meredith Whitney Advisors cut Goldman Sachs (GS) to neutral from buy and removed the price target on the stock–it was $186. Meridith Made a huge call last Q–that Goldman would profoundly beat street numbers. She was right. Another hot hand. Take note.

Goldman on Asian Steel Sector

Analysts at Goldman Sachs (GS) raised the Asian Steel sector to Maximum Bullish. I read an extensive note by the analyst which I agree with. Most importantly, he notes to pay attention to Japanese steel names. As Asia moves to a more steel intensive economy, the position of China as a steel exporter may be reduced, creating demand shortfalls that will be filled by other regional players such as Japan. JFE and POSCO were raised to Conviction Buy. Nippon Steel, Kobe Steel and Hyundia Steel raised to Buy. Also speaks to current investor apathy. I think this will prove a great call.

Citi on Precious Metals

Analysts at Citi made comments on the European Mining sector. They remain positive. They also gave targets for precious metals: Spot gold to $1,025 in three months and at $1,050 in 6 to 12 months. Spot silver to trade at $17/oz in next three months; at $17.80/oz in 6 to 12 months.

UK Inflation Data

The UK September Inflation data is due in a few minutes at 4:30AM EST (8:30 GMT).

And the beat goes on.

Alexandria Real Estate Equities, Inc. Reports Exercise of Over-Allotment Option by Underwriters.

The underwriters (Barclays Capital, Credit Suisse and UBS Investment Bank) acted as joint bookrunning managers of the offering of 4 million shares of common stock. By fully exercising their over-allotment option to purchase an additional 600,000 shares, the net proceeds are approximately $235 million, after payment of underwriting discounts and commissions.

Some buyers some sellers and the middlemen. That’s a market.

Press Release

Much like the game show, The Joker’s Wild, tomorrow’s GDP report is the third number being gamed in a trifecta of reports. Translation: tomorrow’s GDP is final. GDP is announced three times per quarter. The Advance number for the second quarter came in at -1.0% on July 31st. The preliminary number came in at -1.0% on August 27th. Estimates for the final number, to be released Wednesday at 8:30 AM EST, are -1.2%. Keep in mind, we are looking at a number in the rear view mirror. Q2 ended June 30th. That was 3 months ago. In the first quarter of this year, final GDP was -5.5%.

Deduction

Rear view mirror as the number is, always check your blind spot. No one may be following you, but someone may be closer than you think. With final estimates at -1.2%, coming off a Q1 final of -5.5%, there will be plenty of positives to highlight. The sportscasters will be out in full force. More important than the final number will be it’s effect on analyst revisions to their Q3 and Q4 estimates. If analysts are forced to revise their Q3 and Q4 estimates downward, trouble will ensue. When trouble ensues, everyone tries to leave the theatre at once. When a quick exit is wanted by all, the doorways become jammed.

Vin Scully

Speaking of sportscasters–I am talking about the broadcast media. There are many contributors out there worth paying attention to. Two of note are Art Cashin and Guy Adami. Both have had a ringside seat next to the tape for a long long time, and neither of them like stocks here. Pay attention to them. They sit very close to the action. While it’s fun to poke fun at television, it’s contributors are one of many information sources–agree or disagree with their opinions.

Sportscasters, traders, bankers, estimates and revisions.

The beat goes on.

Nikkei 225 +0.9% at 10,100

Hang Seng +2.1% at 21,013

Australia S&P/ASX 200 +1.6% at 4,753

Korea’s Kopsi +0.9% at 1,690

Shanghai Composite -0.3% at 2,754

India’s Sensex 30 +1.0% at 16,852