Daily Wrap
DJIA -59.98 (-0.46%) to 12,965.60; S&P 500 -6.72 (-0.47%) to 1,409.46; NASDAQ -8.04 (-0.27%) to 3,002.20;
Today started with a small gap higher but by 10am we had lost the highs and never regained them for the rest of the day finally drifting into negative territory after lunch and pressing near lows at the close. We had some economic data today but the number talked about the most was the weak ISM which came in at 52.5 and while estimates can be different around Wall Street we saw 54.3 as the consensus. Oh yeah and then those people in Washington spoke some more and that certainty didn’t help.
Dell Computers (DELL) was a focus in today’s trading. A note out of Goldman Sachs upgraded Dell and noted them as a potential LBO candidate. The LBO candidate part has not really seemed to make a lot of sense to many on Wall Street and there seems to be many barriers but as far as the upgrade goes I like it. I do use analyst comments to help cut down on the review process for ideas and also I sometimes use the comments to help my contrarian view. Often time si feel the analysts just pile on after the fact so seeing someone step out is refreshing to me. My view on DELL, they have diversified their offerings and I recently went to Dell and found a TV cheaper than Amazon which surprised me. They also have Cameras, printers to go along side PCs, laptops, ultrabooks and tablets. Not as frequently discussed is their business and server side products. Michael Dell is a proud man and seems to trying to be positioning the company as a technology and business service hub. The stock, it could have legs into the $11-$11.40 range and then I would be a skeptic untila clearer pattern has time to develop. I think DELL will not be a name that goes away but the overall turn around will likely take time. I like the $6.50 in cash and the continued earnings but they need to pay down debt and show some stronger growth.
Also on the upside today was Deckers Outdoor (DECK). This has been a great trade for the site and today’s action was off another upgrade, this time by Sterne Agee with a $65 target. The $44-$50 range could start to prove difficult for the stock so traders have to decide what they want to do with positions. At this point there should be no excuse for this becoming a loser.
On the downside today was Nexflix (NFLX) which was down on reports that Coinstar’s Redbox (CSTR) and Verizon’s (VZ) relationship will begin December 6th. On Demand will initially not be ready but the new titles will be available at the CSTR kiosks. NFLX is a long term name I like but I missed this first move so I have been waiting for next opportunities and I did/do believe they will come.
No news on the Event’s calendar tomorrow but I do believe there is fed speak from Tarullo (I believe). If I can find the exact time I will post, otherwise I do not believe it will be market moving.
According to Briefing.com, the following noteworthy companies are scheduled to report earnings before tomorrow’s open: AZO, BMO, BIG, TOL, MTN
From this weekend the word for the S&P 500 and markets in general was caution. That is because of the unimpeded rally since 11/16. That is because we had technical resistance levels just above and the MACD recycling to the 0 level. That is because we have entered a period that seems to be touchy to headline risk. The word remains caution for me here but the S&P closed today at the 50% fib and I would expect a fight there and/or 1400 with the 20 Day trying to start curling up and sitting at 1393. Tomorrow should be telling. One last comment. We have been VERY fortunate with some great trades lately but like I mentioned with DECK, it would be a shame to see those turn into losers or even give backa great deal of the hard earned profits. If you have not scaled out of any positions, I think it is worth strongly considering.
