Bill Cara's Blog for Feb 9, 2011 [See post-close report]

For the Apple "naysayers" out there, here's a man you can't argue with.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 per cent; by 2010 it escalated to 61 per cent. They are enjoying a tremendous growth trajectory with a 78 per cent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

Wondering if there any VIX traders out there, and if so, which vehicles they have been using, and what success they have had? Thanks.

Good morning.

6-8 Billion Dollar POMO Injection Today.

------

7:00 - MBA Mortgage Index (-5.5%)
10:30 - Crude Inventories

------

Cara 100 Earnings: ICE (1.35 vs 1.33), KO (.72 vs .72)
After The Close: ATVI CSCO WFMI

------

DIS - Disney upgraded to Buy from Hold at Wunderlich and raised its price target for shares to $50 from $41 following the company's Q1 results. The firm estimates Disney's organic long-term growth rate is 30% faster than the S&P 500.

FSLR - PT Lifted from $90 to $125 @ Wunderlich. Sell

SBUX - Starbucks initiated with an Outperform at Williams Capital. Target $40.25

------

"Now Egyptians are demanding to see President Mubarak's birth certificate. There's a rumor he was born in New Jersey." - Jay Leno

There's an ETF Conference going on in Florida this week. Contango impaired ETFs are supposedly a topic of intense conversation. Am hoping some of the presentations will be made available...

http://www.indexuniverse.com/insideetfsconference/...

Personally I think she is just muddying the waters some more - excuse the pun, but if anyone has any skin in CCME it may well be worth your time to read it. It appears fairly comprehensive of who and what are alleging against the company.

http://www.sequenceinc.com/fraudfiles/2011/02/09/c...

2s10s 189 bps

Any comment on the spread, Les?

Lets see if that trend persists.

"I hope the Brits can run the Toronto Exchange better than the idiots in Toronto"

Well I suppose there are a few Brits running the LSE. Not many. Like everything else it's a global affair.
http://www.londonstockexchangegroup.com/about-us/e....

"One of the odd aspects of the election campaign so far is that despite constant references to the EU-IMF deal, nobody seems to have pointed out that even by the IMF’s own calculations, the deal does not in fact provide enough money to fund the state for three years."

http://www.irisheconomy.ie/index.php/2011/02/06/im...

They want more dilution!!! Took me a couple minutes to buy back my calls and sell the shares but I'm out!
Earl

http://www.scimitarequity.com/blog/2011/02/04/aast...

A possible reason for the spread between Brent/WTI from a Zero Hedge post on February 1st:

There has been much talk about the oil situation. While Egypt produces 600,000 barrels a day, that is a drop in the bucket in today’s 84 million barrel/day global production. That is barely enough to meet domestic needs. A cut off of the Suez Canal would be problematic, but only for the short term. This explains why there has been a huge run up in Brent crude, to a record $9 a barrel premium over West Texas intermediate. But that is Europe’s problem, not ours. All of America’s crude from the Middle East comes around Cape Horn because the tankers are so large. If anything, this places a greater premium on Canadian tar sands producers like Suncor (SU), which are already rapidly replacing imports from other unstable sources.

Full post is here http://goo.gl/jDWH9 The above paragraph is third from the bottom.

(US) Fed Chairman Bernanke: The US cannot grow its way out of fiscal imbalances; reiterates that while there is ground for optimism on jobs that employment won't normalize for some time
- Believes pace of economic recovery will pick up in 2011.
- Will be several years before employment levels return to normal.
- Inflation is quite low and should remain stable.
- Reiterates Fed has the tools it needs to exit from accomodative policy steps.
- Reiterates that Fed bond buying does not add to debt.

On this last line, I'd like to ask... nah, never mind. I am not THAT curious

"Fed bond buying does not add to debt."

Getting shot in the chest probably won't exacerbate your arthritis either. What a weasel.

Two more:

DIS - PT Lifted from $37 to $42 @ UBS. Neutral

DIS - PT Lifted from $43 to $48 @ Miller Tabak. Buy

Where is bsi381 when we need him?

I see higher lows (minus the tail) and highs on VIX.

Reiterates Fed has the tools it needs to exit from accomodative policy steps

Ok, lets all talk in code.
POMO will end on.......

EEM gapped lower and is forming a nice and tight triangle, chances are a breakout will be down (or I will be selling my EEM puts).

Edit: Mr Market gave me an answer in not so subtle way. Trouble ahead for bulls.

BB just said he is not concerned with the recent rise in interest rates on long treasuries. Says it shows confidence that the economy is picking up. In answer to a question. What? Me worry?

illini- I see you possess a copy of the code book also.

Using his logic, May 06, July 07, and June 08 were also great times because yield were high and going higher.

for how long I don't know. Sell signal has been strengthening since open but we'll see how quickly the dip is bought.

-----------------------

sold SLW flat .72. Wanna get long with this in a decent way but I see downside from here. Maybe gap closure. It hit 50dma in daily time frame and has backed off.

Following up on yesterday's BRCM sell yesterday.
Posting this AM by Sean Udall (subscription required). BRCM may lose some business to QCOM on Verizon IPhone. Vindicates my sell of BRCM yesterday. If stock is acting funny shoot first ask questions later. Good lesson. Sitting on a good profit in QCOM but Sean points out it has underperformed the NDAQ by 20% and sees the stock $20 higher. They are in the thick of smart phone race and its fortunes are tied to some very strong horses.

http://www.fiercewireless.com/story/inside-verizon...

In the commentary at the top of the page.

Good morning Baz,
I'm taking a good look at GRO - I added another 5k BCON at .2635 this morning and plan to hold here for a while as long as there is no crummy news develope. That gives me 10k at $0.278, just under the .28 I was looking for... I'm sitting here on the fense with KERX and I may give it a little more time. I dumped some of my 10%+ loosers and split the dollas - bought 400 UXG and 200 CRESY - that ASTM I'm not caring for. I'm trying to get some quality in this mix so I can cut down on trading!!!
best to you,
Earl

Would anyone care to take a shot at reading these tea leafs?

Jan 10 to Feb 9 (22 days) average daily trade of 7.8468 million shares, avg cost 30cents total shares traded 172.63 million

Nov 8 to Jan 9 (44 days) average daily trade of 2.1484 million shares, avg cost of 23cent total shares traded 94.53 million

I think those in the 23 cent range have had plenty opportunity to take the avg 26% ROI – at least the ones not trading which may be a few.

This stock has not seen the kind of volume (in the last 22days) for the past 3 years. today we've completed the 60% retracement from Jan 10

best regards,
Earl

Curious to understand who the jockey is driving DHM.V after someone pointed it out as their pick for 2011 when it was called Golden Odyssey (GOE.V).

Seems Docherty made himself and his shareholders rich picking up Iron rights at the beginning of the decade as China was vacuuming up Europe's ore shipments. Boy did he choose the right time. By 2006 his development efforts were certainly on the radar as Iron ore prices were going nuts and deposits were increasing in size and a high grade source of graphite was found (of which no mine exists in the US). Quinto was bought out in 2008.

http://www.quintomining.com/i/pdf/SIF_Quinto_Tech_...

Here's a bio of Docherty at the time of his previous company Quinto:

http://www.quintomining.com/i/pdf/equities-11-07.pdf

So Bill making these remarks like GIX.TO firing on all cylinders as they get financing gets me curious as to what Docherty wants with $3 million bucks

http://www.alphatrade.com/news/stories/AM/2011-01-...

Seems the guy might be putting himself squarely in the path of the solar industry as the Deer Horn property has modest quantities of gold, silver, tungsten and moly and a possibly very important quantity of Tellurium, a rare rare earth that isn't increasing in deliverable quantities even as solar industry demand ramps up.

http://www.deerhornmetals.com/i/pdf/Presentation.pdf

so he's secured the $2.5 million budget anticipated for further aggressive expansion of deposits. It's not much but I'm liking this jockey at the moment.

long at .16

FSLR showing a bearish engulfing in the daily following a bearish divergence that's been building since the run up in January in stochastics with MACD crossover occuring today. Maybe some distribution happening.

edit: bearish divergence in weekly stochastics too.

-----------------------

SPXU trade closed +.11 another bullish divergence building in SPY. Damn everyready batteries.

edit: EDZ closed +.28. I won't be caught holding the bag this time baby.

http://www.youtube.com/watch?v=3WCvULMRUq8

Solar stocks have always had a high correlation to oil prices, which appear to be getting batted down from the high end of OPEC's $70-90 sweet spot.....most of the solars on my list are in the red today.

Interesting to see Congo making what seems to be an effort to accomodate growth in gold mining.......

"Congo Plans to Split State-Owned Gold Company in Three
February 09, 2011, 7:53 AM EST

Feb. 9 (Bloomberg) -- The Democratic Republic of Congo said it plans to split the nation’s state-owned gold mining company, which has formed ventures with operators including Randgold Resources Plc, into three regional units to ease administration.

Dividing up Societe Miniere de Kilo-Moto will make the company easier to deal with, Congo Mines Minister Martin Kabwelulu said at the Mining Indaba conference in Cape Town today, without giving further details of the proposal.

The government-run company, known as Sokimo, has formed ventures with mine operators to try to kickstart production in the northeast of the country. It’s about to sign an agreement with Mwana Africa Plc to explore the Zani-Kodo deposit, Willy Bafoa Lifeta, director general of Sokimo, told the conference.

Randgold is expected to begin production at its Doko deposit in 2013, he said, while Sokimo has also signed gold exploration agreements with Sivahera AG and Ferro AG."

http://www.businessweek.com/news/2011-02-09/congo-...

Should have payed heed, but C'est la vie. We'll see how long it stays down. 13m traded since close, now down $1.40

lol, I love this headline, As if we were expecting them to do some thing else while 6-8 Billion Dollar POMO Injection today was taking place, what a FARS.

So what is it going to be for tomorrow BH? Another 9 Billions :), in that case let’s be prepared for tomorrow’s headline to read like this:

"Dow Manages to Eke Out Gain, Sees 9th Straight Day Up"

Don't you love that Les and Grym :)

Taking off with the loot.

I sold Feb 29 puts on ECA thinking the price of Natural wasn't going up anytime soon but in this case it would have been better to buy the stock. It's up almost 11% in after hours due to the sale of part of its assets. I wonder if the timing of the announcement today has anything to do with earnings reporting tomorrow.

Encana To Establish Joint Venture With PetroChina Through Sale Of 50 Percent Interest In Cutbank Ridge Business Assets For C$5.4 Billion

"We know that we're playing a game that is somewhat rigged..."

Somewhat rigged :D, why not say fully rigged buddy, read on:

"Try being a strategist," says Rick Bensignor, chief market strategist at Dahlman Rose in New York. "It's frustrating that the market continually sees a bid. We know that we're playing a game that is somewhat rigged...But the sustainability is evident and can continue to be evident for a while."

http://finance.yahoo.com/news/As-Stocks-Push-Highe...

A big fat Greek tanker with 2 million barrels of Kuwati oil headed to the US Gulf was hijacked by Somali terrorists.
I hope admirals are in a huff and the Seals are getting suited up.

Instead of bullshitting around in Afghanistan and other aimless military pursuits, we should use our military power to put these Somali criminals out of business for good.

Where is our Supreme Commander when we require his duties? Out to lunch.

I guess it goes to show that things really are different this time around. This time, we have a quicker market recovery, because we've decided to borrow a higher equity market index price from the future for a time. Just a policy choice, I suppose.

From where I sit, it feels a bit like the Fed is grabbing the fuel gauge needle with tweezers and yanking it over to read "Full" even though back where the actual gas is stored we're getting quite close to empty.

Turns out, if you play with the unit of account, you can really make things look different. Did you know that the SPX, measured in little gold bar units, is still 40% below its September 08 high? (it took 1.6 oz to buy SPX in Sep 08, and now it just takes 0.97 oz).

Jeremy Siegel, another in a long line of academic apologists who couldn't find their asses with both hands tied behind their backs, comes to conclusions and then by stealth and ruse neatly fits 'statistics' ipso facto as proof of his premise.

For obvious reasons the tenured idiots at prestigious (another fallacy) institutions of higher learning have long known of the term 'publish or perish.' What they publish in their books, blogs and in other nefarious forms bears absolutely no resemblence to the real world.

Siegel's inflation-adjusted total return index is just plain WRONG! I'm going to send the poor wretch a basic CASIO calculator so he can get his sums and takeaways correct.

Most financial books are cooked legally even at our big corporations and statistics, especially the government kind are as crooked as a dogs hind leg. I really don't condemn ALL economists. Just 98% of them. I don't condemn ALL accountants, just 101% of them. The FASB is the last best tit where they all suckle proclaiming their innocence as being part of a herd of pencil necked near sighted synchophants that are paid per diem and on contract to transpose items of importance to an offshore account to some banks server on an island whose government officials are well paid to look the other way.

Inflation adjust the market between 1966 and 1982 and throwing in the dividends to boot, you lost half of your purshasing power. Inflation adjust the market between 1929 and with dividends you broke even in 1949!

Market pundits are simple mercenaries with super egos who are paid up front or de facto by the money-men with agendas. The more money thrown to support their agendas, the more ridiculous the premise.

I own a painting by a not so famous Russian artist. It's my favorite. It is an oil on canvas and depicts hills with windmills where giraffes are grazing. In the middle is a 12th century castle with a moat where dolphins are playing. At the bottom of the canvas is a river with a huge open clamshell with a baby as the pearl while a naked pregnant woman water skis on fast water pulled by a giant carp. There are 20 more nuances of like type. The artist titled his work "Genuine Reality."

The more I contemplate that work, the more I'm convinced that what I'm living today is equally surreal.

Lies, damned lies and stastics and in that exact order. Truth is obfuscated by buying off the media and renting the opinions of hackneyed pseudo celebrities including rubber chicken circuit dinner economists like Professor Seigel..

We have yet to see shame. There have been so few mea culpas. History is revised to benefit those at risk for clawbacks of monies illicitly coerced from Boards of Directors who never gave a fairies God Damn about the stakeholders that they were sworn to represent...They got show up money and options. I beats actually working for a living. Add to that the incestious nature of paybacks in the form of tit for tat. I believe it's called 'interlocking' boards. I don't condemn them but had I the power, I'd hang them.

I await with great expectations the appointment of an SEC head who will carry a lantern (and a gun) at noon time searching for an honest set of books.

Gotta go feed my unicorns. You kids have fun in the casino. Try not to cheat the bank or at least try not to get caught.

"John Anton, Anton Sport's founder, saw the price of cotton shooting up, and decided to act. Last month, when his T-shirt suppliers warned about the fourth price rise in six months, he borrowed $300,000 through his home-equity line of credit and bought more than a year's supply. Mr. Anton typically has about 30 boxes of shirts on hand at one time, but now has more than 2,500."

http://online.wsj.com/article/SB100014240527487047...

I dunno, I think these business types might be making a very bad decision here. Uncle Benny said no inflation, so I don't know what to think. Who do I believe more...?

Bernanke's worst nightmare indeed:

http://www.bloomberg.com/news/2011-02-10/bernanke-...

In the UK:

Food prices rose 4.6pc, up from 4pc the previous month and the steepest rise since June 2009, the BRC said in its Shop Price Index compiled by Nielsen. Overall shop prices increased 2.5pc from a year earlier.

http://www.telegraph.co.uk/finance/economics/inter...

Dave & Ilya,

I see us as in a period of "selective reality". Perhaps it's because so many in media, civic leadership jobs and financial punditry grew up in a video game world. They are detached and clueless about the genuine issues.

An example:
We are often asked on TV to, "Go to our website and tell us if you think the markets will continue to rise." As if a simple vote can change things.

Last night our local newscaster warned the homeless of the dangers of a -17 wind-chill, told of a number of warming stations, and then... "Go to our website for the locations." TV announcement? Homeless on a laptop?

Siegel is obviously too old to fit the category, so I'm led to assume he refuses to face reality which repudiates his "Stocks For The Long Run" book. I think Keynes is the one who said, "In the long run we are all dead."