Sunday, October 04, 2009

BAGAKOAA July 7, 2009


July 7, 2009

Last week, I suggested using stops to protect your positions. Hope you did. We were at DOW 8570 and we are in the 8200 range as we speak and I don’t think the down side is over. Watch the S & P 500 if it breaks 880. My guess of 700 down from 8500 is real. Tomorrow will be a Bell Weather day for the 2nd quarter earnings as AA is reporting. Everything I had read and the Argus (HOLD) and Ned Davis (BUY) reports for AA were mixed leaning towards a hold for 12-18 months. About 30 minutes ago Klaus Kleinfiled, CEO of AA, in an exclusive with Bloomberg had some very bullish comments about recovery in China and aluminum demand. IF this is the precursor for the earnings announcements for tomorrow we could be in for a pleasant surprise. You gamblers (YOU KNOW WHO YOU ARE) might want to get in on some sub $10 AA and see what happens tomorrow. IF we get a nice report (the estimate is a minus .32 a share) it might lift the whole market.

As I was putting this together S & P just came out with very negative report on AA saying sell and a worse than estimate of minus .40 a share so you gamblers are going to be really gambling. Get in below ten and hold on to dear life. Back it up with a stop at 9.00.

Last Friday’s Mad Money, Cramer did about a 10 minute piece on valuing stocks in this crazy market. He gave some interesting insight into looking for companies that still issue a dividend, and to look for yields in the 3-5% range. (Take the year dividend divided by last price). If you want to see it and I recommend you do, it is on iTunes as a podcast FREE AND YOU CAN WATCH ON YOUR PC WITHOUT AN IPOD OR ITOUCH. It was the second segment of the show.

Could be an interesting day or two in the markets. Here is the link to the AA conference call scheduled for tomorrow afternoon. 5:00 pm EST. Or you can get the transcripts at on Thursday Morning.

Salve Lucrum


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