7 February 2011 12 Billion M & A Fans Can’t be Wrong
Just got back from a great meal at Hanna’s and couldn’t wait to get started on the blog tonight because we almost hit our target for the S & P this week at 1,329. It closed today at 1,319. 12 Billion worth of Merger and Acquisitions were announced today and it got everyone hot and bothered in the market.
Consumer credit blew away everyone’s expectations at 6.1 Billion. Our guess of a disappointment makes us wonder why we guess. (Because when we get it right, it makes us all warm and fuzzy.) We also had a bit of a drag in the NASDAQ despite a great day for AAPL. (More about that later cha ching.) Despite all of that, volume was a tad light. Tensions eased in Egypt as banks opened and businesses opened (kinda like we suggested last week), so the threat that wasn’t took oil prices down a notch. (What a bummer as I was only 5 dollars short of a Franklin to fill the Escalade this weekend. We have noted when it takes a hundred to fill the SUV, traffic on the freeways drops considerably.
As promised we did get into the SWKS position and we decided to use a very short term call to start. We picked up some February 19 35 dollar calls for 1.60 each. We also closed out of a quick deal we initiated last week with AXL American Axle. We got into the February 19, 2011 $14.00 calls for 90 cents a contract and we took our profits today with a 28% gain. Not bad for 2 trading days.
We sold out of one of our core holdings today. KO Coke has run a bit out of steam and we have better ideas for the money. After being as high as 23% up, we are taking 11% off the table today. It was a sizeable position so it frees up some cash.
We also took a nice call off the table for AAPL. It was the call we had mentioned here in November. It was a $330.00 call and we bought it and sold it a couple of times. The net gain after trading fees (Someone said I must be spending a fortune on trading fees-I am) was 27.4%. We are quite happy with that and we are glad to contribute to Charlie Schwab’s wealth.
Stupid is as stupid does
As a brief update today of our house rebuild, we were greeted with a plumber who had to cut away some cement to plum some gas for our new range.
This genius was cutting away being sure to wear a mask and have a fan on himself as he created a 40,000 cubic foot cloud of cement dust that infiltrated every nook and cranny of our home. No dust containment at all. Visibility was under 5 feet. I cannot repeat my conversation with him as my aunt reads this and we have at least two occasional readers who are priests. Needless to say for those readers I did two Our Fathers, Two Hail Mary’s and one Glenlivet on the rocks at Hanna’s.
There’s a Bad Moon on The Rise
We usually have a few good stocks to tell you about, but tonight we have a few that if you own, you want to watch really close. Keep an eye on CTSH Cognizant Technology Solutions Corporation provides information technology (IT) consulting and technology services, as well as outsourcing services in North America, Europe, and Asia. They reported well but expectations were high enough that forward looking comments were disappointing. Here is a quick chart.
You can see a box from last year and it clearly breaks out of the box and has a nice run. Today’s announcement triggers a huge institutional sell off. This could be some profit taking OR abandonment. Be careful and if you own it and see a couple more days of heavy negative volume, take some profit. If it falls through 71, you might be in for along fall. DO YOUR HOMEWORK.
Also hold on to your seat bealts if you own TE TECO Energy, Inc., through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy in Florida. It had some weak forward looking comments and it is about ready to fall another 15-20 percent. Danger Danger Will Robinson.
This is not a pick of the day but worth watching. NCR Corp NCR Corporation provides technologies and services that help businesses primarily in the financial services industry to connect, interact, and relate with their customers worldwide. It reported well but look at the volume and the direction over the last two days. Somebody knows something. WE DO NOT OWN, but, watch it.
Ok it’s late and we have an early video conference that we have to attend. I am actually looking forward to not meeting with contractors tomorrow morning.