My US Macro view + why CNH and LVS may rally

Welcome back everyone, been out for a couple weeks adjusting to the new semester. Things at school seem to be pretty under control for now, so lets begin with some Macro highlights since last time..

As we see 2012 roll on through with January pretty much in the books, the S&P 500 is looking to have its best start in some time. Towards the end of the year, we saw the Dollar Index rally to near 2 year highs amid continued European concerns. It seems like that has blown over for now and we are back to the same old “risk on” game. Don’t fool yourselves though, Greece WILL eventually default/leave the Euro Zone. There really is no way for them to repay without more haircuts, and debt holders are already disgruntled about only getting 50% back. The only reason people are “less worried” now is because Germany could bail them out. Do they want to? No. Could the EZ force them? Maybe. This is why the Euro currency is such a problem, I can honestly say there has never been a situation this dire until they decided to bring about all of these countries to use a common currency.

Last Friday, Peter Schiff of Euro Pacific Capital did a Skype call with our Students in Money Management class discussing how US is going to be the next Greece. He went on to state our debt situation is pretty much out of control, and that poses risk for high inflation and default in the near future. I have to agree with him on this. Basically within a few years when China no longer wants to buy our debt, we will be in deep trouble. The US will be like Greece without Germany, no one wants to of will be there to bail us out. The reason why we have not seen rampant inflation and high yields is because the Fed has been buying the long end of the curve through Quantitative Easing, especially Operation Twist. This covers up the problem, but really you can only cover up a problem so long. Its fun to spend money you don’t have but we have literally shopped till we dropped.

What we need is job growth, and I know that everyone says this, but it is true. Government jobs do not count and make the situation worse. They are the reason corporations are not able to hire. Too many regulations and double taxation making large companies with profits give back to the government to do what with it? Give to people who don’t work? This is not the USSA it is the USA. At least 1/6 people here are on food stamps, our taxes paying for those who I’m sure would LOVE to work. There are plenty of people who WANT to work but can’t because of the reasons stated above. What we need is a change in Economic policy, we see that supply does not create demand and Keynesian ideology is completely wrong.

Above the US dollar index currently in a channel, expect this to move down and test the lower trendline with a possible break. I have changed views on US dollar now looking for short term bearish because of continued easing and low interest rates till 2015.

Earnings have been so-so to begin the year so far. Google’s numbers were not the best but Apple really did blow it out of the water with a monster beat. We are seeing pickup in global demand from Caterpillar and the larger industrials, along with tech reporting very well. This week I want to throw out a couple names to watch for.

Reporting on Wednesday is CNH Global. (CNH), a 11B mkt cap company headquartered in the Netherlands with business in both the agricultural and construction equipment industries. They manufacture Case and New Holland equipment. As we have seen recently from the very good CAT report, this is one that could go up after the report.
Fundamentally they look pretty good with a profit of 1.2 B in Q3 ’11 compared to 968M in Q1’11. Profit margin also increased 2% last year to near 6%. Costs have been going up, but were able to keep them under control and went down 10% Q/Q in ’11. Another plus was the 20% revenue growth from Q1 to Q2 ’11 which helped boost shares earlier last year. If you are one to believe in Emerging Markets and sustained but minimally slower global demand, CNH looks good to me. It is currently trading 1.4 BV 11.8 P/E, though does not pay a dividend. Expectations are 72 cents/share on $4.41B Revenue.
All time high is 66.00 and 52Wk high is 54.00.

Above some tech analysis on CNH, started off the year with a run up, but this is a buy high sell higher environment in the world of easy money. MACD is looking a bit toppy though so it could slightly sell off pre-report but looks good to buy long term.

Above a couple pictures of fundamental valuation, notice in the one right above, y/y increase in EBITDA/share, profit margin, and ROI.

Next I want to look at Las Vegas Sands. Right now, they have top market share in casinos and resorts in the world. A large percentage of their revenue comes from Macau in Asia. An article I came across this morning from yesterday: http://www.travelbizmonitor.com/las-vegas-sands-corp-interested-in-indian-market-15512
This would be HUGE for LVS and with the worlds second largest population, soon to overtake China in the next 10-20 years, what an opportunity to expand now. If you are a believer in emerging markets and the BRICs there is definite room for this thing to run.

Fundamentally, they look great. Q4 ’10 rev. came in at 2B and recent Q3 ’11 revenue at 2.4B so about 20% revenue growth y/y. Profit also went from 700M to 1.1B in this timeframe. Costs and taxes have stayed pretty much stagnant, profit margin up 4% to a current 18%. They have double the amount of cash they need to pay down short term debt and enough assets to cover the rest, another plus. They did not suffer from the Auguat selloff as they are now at near pre-Lehman ’08 levels and continuing to grow. 17/20 Analysts rate it a strong buy.

Above valuation shows just how strong this company is. Notice in ’11 they have increased cash, profit, EBITDA, ROE and reduced debt to EBITDA. As for now, I am looking to possibly buy some before the report comes out after the close Wednesday. To do this, I would need to sell my Frontier Communications holdings. I will discuss this later on.

LVS has been getting stopped out at $50 for the whole ’11 year, I think that with this news headline and blow out numbers, we can push above and sustain $50 this year.

Last, S&P dropped a bomb on my largest holding for my IRA fund, Frontier Communications. http://www.bloomberg.com/news/2012-01-27/frontier-falls-on-s-p-outlook-cut-to-negative-new-york-mover.html I will make my decision early this week to sell of hold, I thought things were going pretty well a few months ago, but you can never tell. So far, I have lost over 30% of my position in 2.5 years. (Bought at 7.00 Break-even after dividends would be mid 5.00’s). Live and learn.

Above 5min chart of FTR the past 2 days, nice to know someone knew about it the day before and got out. The SEC is doing a great job on that BTW.

That’s about all I have for this week, I’ll get back to these when able, you can always catch me on Twitter @peter_eller10 for more analysis and trade updates. Let’s make this a good week!

short review of last wk, long oil, MTB earnings

One week in the books, not too much happened on this 1st week of 2012, but let’s take a look:
S&P 500: up 1.6%
Dow Jones: up 1.17%
Nasdaq the winner up 2.65%

We saw some weakness in IBM, large weight on the Dow, so that was the lagger this week, though by Friday Apple closed at a new high (not intraday high) of 422.40. This is less than $4.00 from an all-time high which I will assume will happen sometime this week. There is still a lot to be bullish about on in this name, iPhones and iPads are still selling very well, and who is to say they don’t have another new invention down the pipeline? Long term, this looks good, and speculation of them paying a dividend or doing a share repurchase makes owning Apple more attractive.

The jobs report came out on Friday, and of course everyone’s reaction was to the headline where we created 200K jobs in December. I would give this a B, because at least 25% of those jobs were due to seasonality and the labor force continues to decline. The positive thing is at least we are not losing jobs, but one has to be careful of the rate. Unless you are looking at the U6 (measures discourages and unemployed “real unemployment) the rate that they give you on TV or in the news is the false. It is only a matter of time before people wake up and realize you can only decrease the labor force so much.

It appears to me like bullish sentiment is setting in for 2012, we are definitely seeing it in the crude oil space. Last week at the open, we saw a rocket higher above 100 and we managed to hold above 100 the whole week getting to almost 104. With continued games in the middle east including the Strait of Hormuz, expect oil prices to be around these levels or higher this year.

Below the narrow trading range in the ES last week, it seems like someone already knew about the jobs report Friday zzz… 20 handle range

This week begins Q4 earnings and what better way to kick it off than highlighting one name on my radar. M and T Bank $MTB is a smaller regional bank, mkt cap ~10B, headquartered in Buffalo, NY. Looking at their internals, the company over the last year has been dealing with declining net income due to selling expenses. As the entire banking sector still continues to teeter in the edge, I would not be a buyer of M&T here. Valuations do look cheap, but there are many headwinds. Current liabilities increased 20% from March to June of this year, though their cash pile also increased.

Above it seems like MTB is ready for a breakout, but this looks to me like the top of a range imo, be careful.

Short post, but last week at home until Spring semester starts, and its going to be pretty boring, might do a couple trades I’ll keep you all updated on twitter @peter_eller10 have a good week all.

2011 in review, my take on 2012, some earnings

Another year in the books, and what a year it was indeed. Huge volatile swings first beginning with Japan in March, soon leading us to the highs of the year in May, back down to the lows in August-October over European debt contagion and US default fears. For long term investors, this was probably the worst they have suffered since ’08, though the S&P 500 ended only 4 pennies below unchanged. We saw a large inflow of capital into the utility sector and large outflow from the financials. Looking at the XLF the financial sector SPDR, it was down roughly 20%, near levels not seen since July ’09. Financials finished the year near the lows, some including Bank of America, down 70%. We continue to see fear in the US banking sector over toxic mortgages and home foreclosures. Until the housing market turns around and the banking sector once again has credibility, we will continue to see weakness in this sector. The inflow of capital into utilities tells me that those long the market in the hope of a recovery are fearful and are looking for a place to hide out. If investors were to be betting on a global recovery, we would be seeing more buying into the emerging markets.

Below are two charts, one of the XLU and the EEM. You can see the inverse relationship take place, especially after the large drop off in August. I expect this trend to continue until we get some clarity in our global markets.

One positive thing we did see this year was the rally in the US dollar. This strength will benefit those who consume, giving them more of a bang for their buck. As I have stated before, 70% percent of US GDP is consumption.

Lets take a look at what happened with me this year:

Above shows trades/transactions I have made. As you can see, 2011 for me was not the best. My worst was betting on a steel rebound. I got long AKS a bit over 12 at the end of July, then got completely crushed after a straight shot to 8 ish. I got out at the end of August before it continued down to break below 7.00 and continued to stay weak and close out the year down 50%. Second worst trade, though I did not lose too much money, was going long AMR after the initial plunge under 2.00 at the beginning of October. I should have sold a week after, but waited too long and actually sold a week before they filed for Ch11 and closed under a dollar.

Above are my current holdings, worst performers being Invesco and Frontier, both of which I am holding for my IRA. I plan on selling out of Kodak within the next 2 weeks before they have to delist for a pretty substantial loss. THQ is a small position hope play for now.

This week I want to highlight 2 possible positions to take follow earnings releases. Keep in mind Q4 2011 earnings will be in full force starting January 9th. On Wednesday, we get Mosiac, and on Thursday Constellation Brands.

Looking at Mosiac, this has been beaten up pretty bad this year on fears of global slowdown, weather concerns, and glut of vegetation. Down about 25% in 2011, I see this as a long-term value play on the need for more seed/potash for global agriculture. As population increases, not necessarily in the US but other countries, there will be a greater demand for food. The income statement by quarter over a year looks a bit rocky with continuing increases in revenue, though costs also increasing, so profit margins are being squeezed. One positive note I could was the decreased amount of borrowing they have had to do from 439K on the Feb report to just 6.5K in the August report. Borrowing less creates more cash on hand for future purposes.

Some fundamental analysis shows that MOS is still doing very well, increasing amount of cash per share and profit margin since Feb.

Basic technical analysis show it a buy also.

I probably will not act on this, but will give it a buy now for a long-term investment.

Next, we will look at Constellation Brands. Per the company’s website, they sell wine, sprits, and beer of brands such as: Corona, Svedka, and Black Velvet. A large majority (core business) of their sales are done in North America (primarily USA), Canada, and New Zealand. Having done a marketing presentation on Franzia, I know about the amount of people who drink and even during hard economic times, alcohol is not terribly expensive, and people are still going to use it, hopefully responsibly, to have a good time on weekends/special events. Looking at their fundamentals, Net Income nearly doubled from May to August, 40% less borrowing also took place with revenue increasing 5%.

Fundamental analysis show STZ holding up well, decreasing EBITDA debt, increasing EBITDA/share, cash per share also stable and profit margins still increasing and very strong.

Basic technical analysis also show this a buy here and might I add on cheap valuations. P/E under 10 is basically a steal and a good place to put $ on a US recovery.

Not much in the way of earnings this week, these are just a couple that stuck out to me. I also see that Family Dollar is reporting, an earlier post of mine described my bullish sentiment on DG, basically the same business and I would also get long that name as well.

The New Year is here and it’s time to get a fresh start. I wish all of you the best of luck in 2012, catch me on twitter @peter_eller10 I’ll be here all week, lets all make some $$!!

Looking for a place to settle out

Welcome back, it’s been a while since I’ve written here so let’s look at what has happened since then.

The S&P 500 has been on the trek down and has broken a key resistance 1,220 level on Wednesday, after Ben Bernanke said that there will be no immediate monetary easing, though interest rates will continue to stay low through mid 2013, which we have already known. With no fed intervention, we will see the US dollar strengthen, and the market weaken a bit, which is what has happened since Bernanke’s speech Tuesday afternoon. This combined with continued European uncertainty, and possible Euro printing, we could be in for the start of a rough 2012. Though a strong US dollar is not a bad thing; to make a country grow, we need GDP growth. Macroeconomics 101 says that GDP = C+I+G+NX. 70% of that equation is the C which is consumer spending. With a stronger US dollar, consumers’ money goes further. Oil prices also come down, like we have seen; off of the $100 dollar mark and making its way down to $90. With a stronger dollar and lower oil prices, consumers now have more $$ to spend.

I estimate that the broader market (S&P 500) will close out the year roughly unchanged (my range is 1,245-1,270 which is 1% above and below flat on year 1,257). Between now and then, I don’t anticipate on anything being solved, but be aware of false rumors, which seem to run this market day by day.

Above the S&P 500 and my ranges

As I also discussed, the US dollar index, which is a measure of the strength of the US dollar compared to a basket of six of the most used currencies in the world, is another important indicator to watch for economic strength/weakness. More than half of the weight to compose the index is from the Euro (58%) and the rest is from the Japanese Yen (JPY) 12.6%, Pound Sterling (GBP), 11.9%, Canadian dollar (CAD), 9.1% Swedish krona (SEK), 4.2% weight Swiss franc (CHF) 3.6%. Recently, we have seen a big push up above the 80 level, one not seen in quite some time. This index tends to inversely relate to the S&P 500.

As you can see there has been a quite nice U shaped recovery in our currency, up 5 pennies since the beginning of last month to relatively flat for the year. It is in a bullish pattern now, with long-term resistance looking to be 75 ish, I see the US dollar holding strong through the beginning of 2012, given no easing tactics.

This week I want to focus in on my long positions. Currently, I have $1,500 for my long fund ($700 in $FTR and $800 in $IVR.) I bought $FTR at $7.00 a little over 2 years ago and $IVR at 19.70 early this summer. On Monday, I came across an article with a nice picture showing a technical breakdown in both charts. This analyst had a very negative sentiment on both names, so it looked like I missed the boat on pulling the trigger here. This past week, Frontier broke below $5 for the first time going back to the 1980’s. The bad news of lower revenues and having to continue to payout a large dividend has hurt their bottom line, and weary investors can see that. My take is that the bad news has been priced in, seeing the stock has dropped roughly 50% this year alone. Invesco Mortgage Retail has also suffered after the August collapse, though not as bad, and slowly but surely crawling back to respectable levels. They will be paying out a smaller dividend than their last, so this could possibly be good for some share growth.

Above the technical breakdown in both names this year, remaining optimistic for ’12.

Above Frontier Communications Corporation, RSI, VWAP and BBands

Made one trade on Dec 8th, bot 300 $THQI on a big move under a dollar, on headlines looks like the company will be reporting not so good sales on their next report, guided down. Saw moves like this from ERTS couple yrs ago, they have come back and I think that a move below a dollar is overdone. I want to protect myself though and limit my losses to .70 and upside to a minimal gain @ .98.

Above $THQI

Not so much in the way of earnings reports this week, with it being very slow and before the holidays, don’t expect the market to move much, but look out for ConAgra Foods. I actually have a sell on this name based on valuations. Their profit margin has decreased since the beginning, of the year, Cash flow/share is down, Debt to EBITDA is up, and EBITDA/share is roughly flat. These are a few warning lights for the company, even though it is trading at a respectable 13 P/E ratio.

Above these 4 charts show what I’m saying, the stock is up about 15% for the year, so it has beaten the broad market, but in comparison to other names in the related space, like General Mills, who also report this week, are at all-time highs. CAG’s problem appears to be larger expenses with decreased revenue. Notice in the picture below the drop off in income q/q from their last report, that is huge.

Expect the broad market to not do much this week, volume will be very thin. (or could we get another rumor?)

Have a good week everyone, catch me on twitter @peter_eller10 for updates!

Has Europe been saved?

What a week it was indeed, seems like everything is back to normal, right? We saw all of the broader market in the green: SP500 +7.4%, Nasdaq +7.6%, Russell +10.4% Oil +3.3%, Gold +3.7%, Copper +9.1%. The Volatility index saw a huge drop -20.2%. Year to date we are still in the red, but not by much: SP500 -1.1%, Nasdaq -1.0%, Russell -6.2%.

To me, for the fed to intervene like this and basically stimulate the world, what does this say about the stability of the global monetary system? Clearly something was going wrong and something was bound to SNAP any second. From the close the previous Friday to this Friday at the open in the AM, we saw a 100pt S&P rally, we saw this before in the beginning of October, which that rally lasted 3 weeks. Then again, we did sell off pretty hard last week, so on a fundamental/technical basis, we were due for a correction up.

As we saw Friday, unemployment is still weak, anyone who reads the headline will get all high and jittery, but the reason we dropped .4% off the unemployment rate was due to discouraged workers leaving trying to find a job, 300,000+ of them infact. Do you think that is a good thing? It seemed that this news was almost ignored due to the fed intervention earlier on, and by Friday, the buying programs were out of juice.

Above the S&P 3 week chart, I have 1,260 as short-term resistance now. We could not break above that barrier on Fri morning before we slowly chugged down 20 handles to close the day flat. We need a 3-4 day hold above this level to be long, then 1,289 would be the next level, seen at the end of October. As Evan McDaniel said (@sellputs) “Interventions and headlines regarding the Fed or hand of God like tactics can nullify tech analysis on smaller time frames” With that said, watch out and position correctly.

This past week I lost about a $100 on a pretty stupid trade on my part. I really don’t know what I was thinking when I bought $FTWR after it dropped from $1.00 to .30 about 2 weeks ago. I have lost 50% of my position this week, did not read into it that much to see just how bad off this thing is. I will sell my position on the open Monday and learn from my mistake.

Above $FTWR huge downturn this week.

This week going to highlight a few names to trade off from earnings reports. First is Dollar General. Looking at their internals, they continue to do very well, with a q/q increase in revenue and profit by 10%. Notice also how they have been compared to the broader market in terms of outperformance. Since the downturn in August, they are up roughly 30%, this could be due to the number of people still unemployed who need cheap items. Dollar stores will continue to do well in a weak economy. At the close on Friday, they are a little over a dollar off of their all-time highs that were seen last week. I’m sure there has been some buying into the report, nevertheless I have a buy on it, and would expect a selloff from the report, that would be when you get in. The last report has the stock sell off about 8%, since then it has rallied 15%. They do not pay a dividend, but would not be surprised if they instated one soon.

Above Dollar General, notice the tight range it has held the last 2 months compared to large gyrations in broader market. The report will be coming out Monday.

Next name on my list is National Beverage Corporation $FIZZ. This is also another name that will be reporting Monday and quite an interesting one infact. They are the makers of Shasta and Faygo products. I remember years ago my grandfather a huge fan of Faygo, he probably drank a 2 liter a day, was eager to find out the maker of the product and assumed they were doing well, and they are. Between the beginning of this yr and June, they have managed to almost double their income from 7.4M to 13.4M. with a p/e of 18 it is a bit on the expensive sign, but an incentive long term is their special dividend with started in 2009. It has increased from $1.35 to $2.30 in 2010, I expect them to pay out more from the great year they have had, up over 20% and trading near all-time highs.

Above $FIZZ I anticipate a slight selloff in the name, but I would buy, company looks very strong, and as stated above, large yearly dividend helps.

Last one is one I first reported to here on their prior report, AutoZone. This name is another good one for long-term growth. A good percentage of the time, it tends to selloff a good amount, usually 5-10%, then run it right back up to all time highs. This year, they have more than doubled their income from 148M to 301M, the do-it-yourself auto repair still looks to be the space to be in, as people do not have enough $$ or do not want to spend to buy a new or used car and will squeeze as much out of the one that they have using these products. The only thing concerning is the large price of the shares. To make the company more attractive to invest in, In my opinion they need to do a 10x split do lower price to 30ish bucks.

Above AZO showing the continued move up

My thoughts this week are that we will see some profit taking from the huge run up we saw last week, we need to hold a key 1,200 this whole week to continue the bullish momentum, break below and in for more trouble. After this week, we usually see the low volume melt-up prior to Christmas and after, so beware of that any of you who short (probably already know this).

That is all for this week, will for sure not be posting next week, final exams are here ugh, but home in 11 Days could not be more excited. I’ll keep you all updated as much as I can via twitter (@peter_eller10) on any moves I make this week. Good luck to everyone.

European Collapse on the Way?

Hope you all have been well these past few weeks, been going through a rough patch with this foot injury and grades not so stellar, so the trading has been limited but they all have been not so good. Let’s review what has brought us to this point:

Last time I posted on here, we were looking at 1,260 on the SPX. Basically what we have seen from the lows on October 3rd 1,068 ish to the highs around 1,290 on October 27th is a short covering rally. I marked below 1,140 a key level to watch. Since August when the selloff began, we have breached it 5 different times, the first two on a large volume down day then bounce back up. The third we closed below for 2 days, the fourth, same story and the fifth time we saw the shot down breach of 1,100 then shot up. We traded below 1,140 for 3 trading days. My gut tells me that there will probably be some sell stops under 1,140, but if we can sustain more than 3 closes under 1,140, there is more downside to come. I mentioned at the beginning of last week on Twitter we would be 1,150 end of week. Intraday Friday ES low was 1147.5. Last week was the worst for Thanksgiving in over 60 years.

Above S&P 500, key level 1,140

As far as Europe, the situation there is not getting any better and something tells me that the Euro will be gone soon, if not by the end of the year. Italian yields are out of control, Spain and Portugal are both getting there and Germany cannot support the EU by itself. The European Union will not print more, leading to an all-out debt crisis that would affect not only EU countries, but whoever bought their debt. More haircuts anyone? Doubt it.

Spain and Italy now have to pay more to borrow in two years than a decade. Spain’s 2 and 10yr spread have been cut in half in a month. How much more borrowing can continue? As of now, Italian 3yr notes are above 8%.

I am still long-term bearish because after the EU satiation gets resolved (will it ever) our debt problem is next. Like playing a game of ping-pong, though when the ball is in the air, (unknown) buy the market; seems to be the theses we are following. We will probably end the year lower.

Trades I have made in the last 3 weeks have not been so good. My first was Delta Petroleum on November 11th. I had a buy trigger set for .58 at an open of .71. If it did happen to fall that much (which it surprisingly fell to .52) I owned at .58; I got out at .54 for a small loss, since then it has flat-lined around .56, was looking for a short-covering bounce, but missed it by a day.

Above $DPTR on the buy+sell

I made another losing trade (could have been much more) on CVR Energy. WTI spiked to $103 2 weeks ago and the refiners got slammed hard on the contracting Brent/WTI spread which at one point was just above $9 dollars (Was $25+ at the height). I bought and sold the next day for a 20 dollar loss. So far, down 45 bucks. It was good to get out there seeing as it traded below $17 briefly.

Above $CVI

Last trade I had to make to support my 4th, which was my American Airlines sell. I bot $AMR at $1.9 on the initial slam back on October 3rd. Did not have the brains to pull the trigger on the 13th when it could have been $100 profit. Sold out at $1.80 for a $30 loss. As of now, it is trading below 1.60, so it was good to get out now. Company looks dead, losing $$ due to pensions to retired employees and low profits from high fuel costs.

Above $AMR

My last trade of the week was right after the $AMR sell. I bought $FTWR at .30, so far I have been flat this one, dipped below there to .28 and above to .38 which was the end of day ramp on Friday I missed due to being at the gym lol. Looking for another possible week in this name before I pull the trigger, it is a small amount compared to other trades I have recently made. The reason for the huge selloff from the 1.00-.80 range was a 40% cut in their workforce and a missed interest payment on 9.00% convertible senior Secured notes due in 2012, resignation of directors, continued delay in 10Q filing and continued issues concerning listing on NASDAQ exchange.

Above $FTWR

Going to be very limited trading this week, back into work mode for me for the next 2.5 weeks then semester is over, can’t believe it. I’m eyeballing one name though if I can get it for a good price. Talbots surprised me last week trading below $2 for the 1st time since 2009 lows. Below are some stats on the company for a potential trade; looking for possibly under $1.8 before the report comes out Thursday.

That's all this week guys, catch me on twitter @peter_eller10 I'll let you all know if I do any other trades.

Some Europe, Some MF Global, Some earnings..the usual

Another week of European madness along with the bankruptcy of MF Global rocked the US markets; S&P and broader markets finished down about 2.5%. What we are waiting for now is clarity from Greece, and what is exactly going to happen with the MF accounts. Markets opened up ugly Monday and Tuesday following the prior week of MF Global in an unstable position after investing in European sovereign debt. They had to file for Ch. 11on Oct. 31st, as of now clients are out of work and will not be getting paid until the middle of the month. A further FBI investigation will tell us that there was more than bad investments going on there, but mingling of accounts to cover up losses. Very messy, indeed.

The ES got down to around 1,215 Tuesday, a strong pivot that I was watching that day was 1,208; we didn’t get there and we rallied off of the lows. 1,260 was accomplished by day end Thursday.

Trendlines still show we are rangebound, 1,214 was the breaking point which was closely breached then a bounce right off of.

I expect we will hold a 3% up/down range this week, not really sure as to where we go yet with Greece, and the CME/MF Global margin news. Plus, with a slew of earnings reports this week yet again, anything is possible. Looking to breakdown under 1,220 and a breakout to the upside 1,280. Will we slam it again, or will we have an early Thanksgiving rally? (lol)

Was not trading last week, finally done with busy week of tests till beginning of December when finals start thank God, but besides that, saw all of my positions release their earnings statements this week with one being positive and the rest negative. Let’s look first at Eastman Kodak.

Kodak posted wider loss than expected, losing $222M dollars in the 3rd quarter, with cash reserves falling 10%. Revenues also fell, by 17% with the biggest percentages of the loss coming from the film and digital camera business. Much competition from Fuji and Canon are leading to continuing declines in Kodak shares. For now, I plan to hold my small position in the company, as I bought it very cheap in the first place (unch to minimally neg. as of close Friday). CEO Antonio Perez is bullish on 2012 with their continued growth of Inkjet printer sales (to the US Fed, lol kidding) or patent sales, which could still be in the works, will raise share prices, imo possibly upwards to $2+

Above, $EK breaking down below pivot, touching S3 @ 1.05 before bouncing off. What remains for the future of this company is to be determined….

Frontier Comminucations also reported, another not so good quarter for them with declining revenue and increasing expenses. Shareholders punished them pretty bad down below a key $6 level, then to $5.5 which held. Revenues were down over $100 million q/q due to decrease in residential and business customers switching accounts to other telecommunication services, probably that are cheaper. Revenue decline has been a problem with Frontier the past year, but they are still very ritual with high yielding dividend which can almost offset all of my losses in the company. I don’t want to feel like I’m married to it, but it was my 1st ever trade and currently my biggest position.

Studying the chart, I can see from where it previously breached 5.5, bounced off traded in a $1 range for a month broke down again, held and traded up again. Looking for it to stay above 5.5 for the continued time, will only sell out (finally) if we breach 5.5, due to company concerns, and not broader mkt bringing it down.

Invesco Mortgage Capital $IVR reported a 5th straight quarter of double digit profit, though margins are declining. I am holing $IVR for an IRA account (got to start sometime) pays the highest dividend right now out of all the REIT’s publically traded. Since they do not have to pay income tax on profits, they have to distribute 90% of their income as dividends. In doing this, they have to consistently price secondary offerings to raise capital, increasing amt of shares, decreasing share price. I am long $IVR, regardless of share price, just my opinion.

Above you can see major drop off, about 40% at the lows, after the secondary offering in August.

Earnings this week looking at Kohl’s $KSS. With the holiday shopping season right around the corner, I would be a buyer of Kohl’s here. Their fundamentals and sales appear to be very strong. They saw about a 33% growth in Net income q/q while cutting expenses. Trading at a p/e under 15 (14.1) looks cheap on valuation also. Consensus EPS is .78, I see Kohl’s trade up near $60 or breaking above it.

Above 2 photos, a chart of $KSS and Return on investment + profit margin + Gross Profit margin

One more I’m looking at for a trade is DryShips $DYRS. I had a buy stop in this name a couple months ago, but missed it by a cent on a huge ramp following. They are expected to report .15 a share. Looking at the business from 2008-present they came from a 361M loss to 172M profit, so they have definitely turned themselves around. If I can get in at a good price, I’ll pick some up.

Above, $DRYS holding above $2 right now, but well off it’s normal $4 level.

One final thought, will we continue to see more can kicking in Europe? now that Italy’s bond yields are beginning to become a bit risky, are we at the tip of the iceberg? We can’t forget about our debt problem either. Nowhere close to be out of woods yet, but trade the markets day to day, up and down, that is all you can do, watch the charts.

That’s all this week guys, I’ll let you all know via twitter (@peter_eller10) If I make any trades, have a good week of trading everyone!