Bill Cara’s Blog for January 26, 2010 [See post-close report]

Good morning.

AMAT - Upgraded to Outperform @ Oppenheimer. PT = $20

AMZN - PT Raised from $130 to $162 @ Oppenheimer. Outperform

EXC - Sun Trust Robinson Humphrey Initiates with a Neutral.

AAPL - PT Raised from $260 to $264 @ Broadpoint. Buy

AAPL - target, estimates raised at Credit Suisse. AAPL price target to $275 from $250 after posting a solid quarter. 2010 and 2011 EPS estimates set at $11.54 and $12.44, respectively. Outperform rating.

AAPL - estimates, target increased at Government Sachs. AAPL estimates were boosted through 2011. Higher Mac sales offset lower iPod unit volume. Neutral rating and new $230 price target.

MCD - estimates, target raised at UBS. Shares of MCD now seen reaching $72. Estimates also boosted, as the company appears to be gaining market share. Buy rating.

WMT - Raymond James Initiates with a Strong Buy. PT = $63

'bout time these criminals join Madoff...............Just don't know how you can prosecute those that are doing "Gods work."

http://www.nytimes.com/2010/01/26/business/26tarp....

Will he (Volcker)work his miracle once more? Will he be allowed to? This is just my opinion but I feel the "End Game" is 100% political. That does not bode well for our future; At least as far as I can see--maybe others can see further.
How are we ever going to get out of this God awful mess of debt, upon debt, upon debt. Forever in debt! Maybe that IS the political end-game.

It is my understanding that the plan to raise the debt limit to over $14 trillion may be halted now that Scott Brown is on the scene. While it is already above $12 trillion any halt will require cuts to something or there is not enough to pay for the health care snow job.

Am I dreaming?

Conference attendees will recognize this play immediately. Fresh one, just out of oven.

There was a guy on this board that created "predefined symbol lists for the cara community RSI tool" I used that all the time. Seems to not be there anymore. Is he still here? Has he moved it? That was a great little tool. Thanks

The predefined lists are gone, as far as I can tell, but the tool itself is still kicking around right here:
http://rsi.caracommunity.com/RSIApp/RSIApp.html

Could be a complete oversight on your part Bill, but you forgot to add GS to the Cara 100.... PE 7.8X..... .35 dividend.... trading up 26% since June 09....the first to repay TARP...... doing Gods work......on & on & on.

Hi, I'm new, watching for a few years and respect the posters on here. Just surfaced to second the plug for Food for the Poor. These people were walking the walk in Haiti long before there was any money in it.
On topic, isn't it amazing how we have come to accept that the NYSE now moves up or down as a single entity? I run through my watchlists and they are all red or all green. Maybe they should go back to open cry and ban blackbox trading. Makes you feel like plankton.

..... http://www.usatoday.com/news/washington/2010-01-25...

Only 4 of the 24 components in the gold ETF are under $400M - not very "junior"!

Also, portfolio construction is very mechanical.

It’s as if you sent 24 guys onto 24 different hills with pickaxes, and said, “I’ll give you all equal backing”! If there was ever a market where random = ridiculous, and judgment is EVERYTHING, junior gold exploration is it!

Here are the details:

The index universe is defined as all component stocks of the Dow Jones U.S. Total Stock Market IndexSM and the Dow Jones Canada Total Stock Market IndexSM that are categorized into the Gold Mining Subsector as defined by the Industry Classification Benchmark (ICB).

Stock Selection

Selected as components of the Dow Jones North America Select Junior Gold IndexSM are all securities in the index universe that pass the following screens for size and liquidity until a minimum component count of 7 is reached.
— A stock’s float-adjusted market capitalization must be less than or equal to 0.015% of the combined float-adjusted market capitalization of the Dow Jones U.S. Total Stock Market IndexSM and the Dow Jones Canada Total Stock Market IndexSM. For current components to be re-selected to the index, the threshold is 0.018%.
— A stock’s float-adjusted market capitalization must be greater than or equal to 0.0015% of combined float-adjusted market capitalization of the Dow Jones U.S. Total Stock Market IndexSM and the Dow Jones Canada Total Stock Market IndexSM.
— A stock’s average 3-month float turnover must be greater than or equal to 0.2%. If a security fails this screen in its home country, liquidity data from cross-listed issues will be considered.
— A replacement will be made if the component count is dropped below 7 during the quarter.

Don't forget stock buybacks. Anything they can do to buy stuff at a premium...

I wonder if gold is marking time for the FOMC meeting tomorrow?

once again available at http://www.tradersquest.de:8180/rsitool/

Tomorrow I will check whether the lists are up-to-date.
If you would like to have additional list included please
let me know: olaf@tradersquest.de

"Hearing bank selloff fueled by a competitor's bank analyst relaying details of his conversation w/ Volker- which had a very hawkish tone. Chatter of a block of citi to trade post close." from Zero Hedge today

That Middle Eastern Prince is bailing on his monumentally bad Citi position. Obama will offer hope with ye ol' party platform tomorrow?

http://tinyurl.com/yevdao4

Good luck to all.

One of the more interesting developments of "the crisis" has been watching the re-emergence of Volcker to the scene, 20-30 years after his influence peaked. I wonder how many people today remember just how strongly he was hated by Main Street during that time as he knowingly and willingly plunged the U.S. into its deepest recession since the thirties through his monetary policies at the helm of the Fed. Those policies also burdened poor nations (especially Africa) with crushing debt and a lost decade, culminating in the Mexican Peso crisis of '82.

I'm not going to argue whether he's an honorable fellow, or whether his methods were appropriate (probably yes on both counts). I just find it interesting, and a little bit sad, that in this time of tumult, the best the U.S. can come up with for leadership is an octogenarian, formerly-hated Fed chairmain, founding member of the Trilateral Commission, and long-time member of the Bilderberg group.

Where's the fresh talent?

The lesson of Volcker is that he showed true leadership by taking action that was necessary instead of that which was politically expedient. In all you can read about Volcker, the one thing you won't find is that he was anyone's puppet. His independence and conviction are what is most sorely needed today and precisely what is sorely lacking in all of Washington, D.C.

Obama will regain a great measure of credibility if he simply does EXACTLY what Volcker recommends to get us out of this dreadful mess.

No disagreement from me on that point, 2nd_ave. There's something warm and cozy about the folksy grandfatherly image we all hold dear. Thing is, that's an archetype developed by the indulges we received bouncing on our grandparent's knees as children.

Personally I always thought my grandpa was a great man, but that doesn't include any memories of him toiling away for J. Rothschild & Co., Chase Bank, and the Rockefellers all his life.

Found an interesting link on Volcker: http://www.econbrowser.com/archives/2007/02/how_pa...

The comments that follow are worth a read and point to some more historical links.

Deferred Gratification... speed, speed, speed.. everthing we do, say, think.. When a person gets away from ' the land ', working it, living it, loving it, reality takes on a whole new meaning. Sadly, that type of living is no longer available or feasible ... People say we have it better now... Really ? The subject of population growth should be openly discussed, as the large farm family is no longer necessary... Nuclear Family ? Say it ain't so, Joe....

If you like Chile and its political and economic stability and resources, look at SQM (nyse adr). Global supplier and dominant producer of the purest lithium (growth in batteries for vehicles) with endless reserves and massive market share of iodine production for medical imaging and computer monitors as well as potash production for soft commodity growth exposure. POT owns big chunk making it a buy out prospect.

No position right now.

The policy government for Codelco is again to maintain it like public company. The increase of capital in Codelco will not be done privatizing it. This specifically has been declared in the program for the new public government. The Chilean parliamentary policy is based on agreements in a bipartisan scheme, which assures a continuity and agreed improvement. It is incorrect to declare that this new president is the most successful and wealthy entrepeneur in Chile.

Interesting theory Mackinaw. Why do we bother listening to Bill, when there must be some fresh talent out there? Perhaps its that valuable experience that comes with age, combined with the rarity of wisdom and a personal integrity so sorely lacking in this time of oligarchic elitism that makes the difference? Go Volker Go! Time to take that bitter medicine America.

From Davos today,

"...many of the factors that helped cause the previous crisis -- a sustained period of low interest rates, high levels of consumer debt in the West and excessive risk-taking by financial institutions -- remain in place.

At the same time, supersized government bailouts could have created the conditions for future financial crises that will be larger and even more expensive than the one the world has just suffered."

http://tiny.cc/M9Mxi

EDIT: Many have spoken of this as a possibility. I suspect a lot of internet and phone traffic between central banks around the world is responsible for the alternating currency-of-the-day effect we see.

Q: Is SKF still a viable way to participate here? Are the ETFs a good way to go when major national economies begin to crumble again?

IMO, gold still looks like the best protection long term — unless there is a move to confiscate.

Anyone have some ideas when/if this comes about?

Bill,

thank you, it's very rewarding to hear folks liked it. Live trading was great fun. In retrospect, good to see that even in our very short time frame for that session (squeezing everything in just 3 hours), we still got major direction right: we did two shorts on CAT, and just look what happened to it since then and continues today.

Looking forward for the next conference

I think Vad is right. No machines were involved. Well - some machines might have made sure everything moved together, but I don't think they were in stop-hunting mode.

The spike in SPX and gold and oil was coincident with a fast and hard drop in the dollar at about 2:30. The SPX rally stopped as soon as the buck recovered.

I'm guessing Vad enjoys fOMC day quite a bit. :)