April 23rd: Ed’s Daily IRA Summary   1 comment

One slightly profitable daytrade beat the indexes today:

OVERALL: +0.04%

Posted April 23, 2014 by edmcgon in Open Thread, Portfolio

Traders Corner   19 comments

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral
S&P 500 Futures (June): Flat (leaning negative)
Overall: We have another “anything is possible” day today in the technicals. But after 6 straight positive days, we seem overdue for at least one negative day.

The S&P 500 levels to watch today:

UPSIDE: 1882-1885 (4 data points and March’s high), 1893 (2 data points), 1897 (April 4th’s high and the all-time high), and 1899 (top of the Bollinger Bands).
LAST CLOSE: 1879.
DOWNSIDE: 1871-1872 (4 data points), 1869 (April 17th’s high), 1867 (February’s high), 1862-1864 (4 data points), 1859 (20 day moving average), 1856 (April 17th’s low), 1854 (April 8th’s high and the 50 day moving average), 1852 (April 9th’s low), 1849-1850 (January’s high and December’s high), 1846 (April 16th’s low), 1844 (April 15th’s high), 1841 (April 7th’s low), 1837 (April 8th’s low), 1834-1835 (2 data points and March’s low), 1832 (100 day moving average), 1830 (April 10th’s low), 1820 (bottom of the Bollinger Bands), 1814-1816 (3 data points), 1800 (150 day moving average), 1775 (October’s high), 1770 (January’s low), and 1768 (200 day moving average).

Ed’s Daily Notes for April 23rd   Leave a comment

Fox News: Bigger iPhone 6 may face delays over reported battery issues

Bad news for you Appleheads out there:

Apple’s iPhone 6 could arrive in 4.7-inch and 5.5-inch variations this year, but those clamoring for the latter may have to hold their breath a bit longer. According to Taiwan’s Commercial Times, the purported phablet-sized iPhone could be delayed a year due to battery production issues.

As pointed out by CNET, battery manufacturers are having a hard time crafting a battery that would fit within the thin frame Apple wants for its 5.5-incher. According to the Commercial Times, the larger iPhone 6 would require a battery that is a maximum of 2 millimeters thick, whereas the average battery sits at 2.8 millimeters.

Bloomberg: Investors Checking Out of ‘Hotel Mongolia’ Found in Limbo

Mongolia is still having growing pains as a frontier market:

Welcome to the ‘Hotel Mongolia.’ It’s a lovely place. But you might not be able to leave.

For about 50 foreigners — miners, accountants, bankers and charity workers mostly drawn here by the country’s resource boom — the lyrics of the Eagles song turned into reality when Mongolia prevented them from leaving the country.

Some of those under the travel ban say the cases involve probes of their employers that have dragged on months or even years. “My career has been destroyed and I don’t know when I will be able to leave,” said Philippines citizen Hilarion Cajucom, who was an accountant at SouthGobi Resources (SGQ) Ltd. when the Canadian company was accused of tax fraud by the government.

Cajucom and former SouthGobi colleague Cristobal David have been prevented from leaving Mongolia since 2012.

Many foreigners interviewed for this story asked not to be named for fear of reprisals from the authorities. All denied allegations against them. Some described their situation as a strange limbo in which they retain their passports, haven’t been charged with any crime, yet they have been told by the police they will not be allowed to leave the country.

Meanwhile…

Bloomberg: Mongolia Eyes Changing Laws to Stimulate Mining Investment

Mongolia’s government said it intends to submit two bills to parliament that could stimulate its mining sector and stoke investment.

The first bill would annul a June 2010 law suspending the issue of new exploration licenses, providing opportunities for companies to explore deposits that include coal, copper and gold, according to the government’s website, citing a meeting on April 19. The second would amend guidelines applied to a July 2009 law on rivers and forests, to allow mining in areas previously off-limits due to environmental concerns.

The changes could provide an economic lift to a country where foreign investment fell 54 percent last year and economic growth slipped to 11.7 percent from 12.4 percent in 2012. Investment has been affected by a high-profile spat with Rio Tinto Group over the Oyu Tolgoi copper and gold deposits it shares with the government, as well as laws put in place during the mining boom of 2009 to 2011 to curb environmental damage and corruption.

Even with the problems in the world’s mining industry, Mongolia still has a lot of growth potential. But there are plenty of obstacles for Mongolia to overcome, mainly themselves.

As for Mongolia’s main trading partner…

Bloomberg: China Manufacturing Gauge Signals Economic Weakness

China’s economy has yet to respond to policy makers’ stimulus efforts, an April manufacturing gauge indicated today, helping send the yuan to a 16-month low.

The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was 48.3 in April, matching the median estimate of analysts surveyed by Bloomberg News. The reading rose from March’s final figure of 48 while remaining below the expansion-contraction dividing line of 50.

Sustained weakness in manufacturing would pressure Premier Li Keqiang to expand pro-growth measures beyond a required-reserves cut for rural banks yesterday and what some analysts have dubbed a “mini stimulus” package of railway spending and tax relief. The report followed data last week showing China’s expansion moderated to the slowest pace in six quarters.

I keep hearing “China will be forced to provide stimulus”, and yet there has been very little response from the government, other than a few minor infrastructure measures. The Chinese government can clearly see what is happening, yet they still resist stimulus measures. They clearly have some longer-term plan in place, and they are running with it. Until the economy threatens their longer-term plan, don’t be surprised if the Chinese government continues sitting on their thumbs.

Posted April 23, 2014 by edmcgon in China, Market Analysis, News, Stocks, Technology

April 22nd: Ed’s Daily IRA Summary   1 comment

One trade, one result:

OVERALL: -0.01%

Posted April 22, 2014 by edmcgon in Open Thread, Portfolio

Traders Corner   22 comments

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral
S&P 500 Futures (June): Flat (leaning positive)
Overall: I won’t make any predictions today, but after 5 straight positive trading days, I have to wonder if we aren’t overdue for a flat or even slightly negative day.

The S&P 500 levels to watch today:

UPSIDE: 1882-1885 (3 data points and March’s high), 1893 (2 data points), 1896 (top of the Bollinger Bands), and 1897 (April 4th’s high and the all-time high).
LAST CLOSE: 1871, inside the 1871-1872 (3 data points) range.
DOWNSIDE: 1869 (April 17th’s high), 1867 (February’s high), 1862-1864 (4 data points), 1858 (20 day moving average), 1856 (April 17th’s low), 1854 (April 8th’s high), 1853 (50 day moving average), 1852 (April 9th’s low), 1849-1850 (January’s high and December’s high), 1846 (April 16th’s low), 1844 (April 15th’s high), 1841 (April 7th’s low), 1837 (April 8th’s low), 1834-1835 (2 data points and March’s low), 1831 (100 day moving average), 1830 (April 10th’s low), 1820 (bottom of the Bollinger Bands), 1814-1816 (3 data points), 1799 (150 day moving average), 1775 (October’s high), 1770 (January’s low), and 1767 (December’s low and the 200 day moving average).

Ed’s Daily Notes for April 22nd   2 comments

Bloomberg: Netflix to Raise Prices as Earnings Jump Spurs Shares

Watching “House of Cards” on Netflix is about to get more expensive, and investors are cheering.

The company that popularized binge-watching said today it plans to charge new customers $1 to $2 a month more for its online video service, starting later this quarter. Netflix Inc. also reported first-quarter profit and subscriber growth that beat analysts’ forecasts. The shares soared.

The price increase reflects growing confidence that original shows like the political thriller “House of Cards” and exclusive movies will continue to attract new subscribers, even with soccer’s World Cup starting in mid-June, a distraction the company said will temporarily slow user growth. Netflix currently offers unlimited Web viewing for $7.99 a month.

“The earnings leverage of even just a dollar is pretty substantial,” said Daniel Ernst, an analyst at Hudson Square Research in New York who recommends buying the stock. “For what Netflix provides, it’s an incredible value for consumers.”

I have to agree with Mr. Ernst. Since I have “cut the cable”, Netflix is all I watch on tv, and there is plenty there for me to watch, especially with as little time as I spend watching tv. I would easily pay $1 or $2 more each month for the service.

As for the stock, it is still overpriced. As much as I like the company, even a good earnings report isn’t enough to make NFLX cheap.

Washington Free Beacon: Comcast Merger Could Dominate Market for Local Political Advertising

Here is an aspect of the Comcast-Time Warner merger which I was unaware of:

Comcast—the cable television and Internet service giant with extensive ties to the Democratic party—could dominate the market for local political advertising if the company’s proposed $45 billion merger with Time Warner Cable (TWC) is approved, according to industry sources.

…Comcast sought to assuage competitive concerns about the deal by announcing in February that it would shed about 3 million subscribers, bringing its combined customer base with TWC to 30 million. However, sources say the 30 million figure does not reflect the company’s growing involvement in the local advertising market.

Other cable and satellite providers such as Verizon and DISH have outsourced their ad sales to Comcast and TWC. The combined companies could reach as many as 50 million households with ads sold as a result of these “rep deals.”

Comcast, like other cable companies, owns two minutes of advertising per hour on every network that they contract with. These ads are seen at the local level. The companies use some of that time to advertise their own wares and sell the rest to national, regional, and local advertisers.

Following the merger, Comcast would own 80 percent of the cooperative through which national advertisers purchase airtime at the local level, 54 percent of the cooperatives though which regional advertisers purchase this airtime, and 69 percent of the market through which local advertisers purchase airtime. Locally owned businesses fear that this consolidation will give greater power to regional and national businesses.

Small businessman Roy Hunter, owner of Sarasota Bay Real Estate in Florida, told the Wall Street Journal earlier this month that he was “held for ransom” after Comcast signed a deal with Verizon to conduct its ad sales in the area. Hunter said his business was priced out of the ad market in Sarasota County.

Politicians consider these two minute chunks particularly valuable because they can “geo-target” voters down to the county or congressional district. According to an executive in the cable advertising industry who spoke with the Washington Free Beacon on condition of anonymity, Comcast’s cornering of the advertising market has broad implications for political campaigns, which could be priced out of the local market or forced to purchase time for a larger region thus diluting their ability to geo-target.
“Given that Comcast owns some control of each aspect—national, regional, and local—they could actually grant favors to particular political candidates,” the executive said.

For example, Comcast-TWC could cut deals on ad rates for some favored candidates. Other campaigns could be charged more to buy ads covering broader geographic areas, eliminating the benefits of geo-targeting.

The situation is “potentially rife with abuse” because of the relatively unregulated nature of the local advertising industry and the political leanings of Comcast, the executive said.

Comcast’s employees, their family members, and the company’s political action committee have donated more than $33 million to political campaigns since 1989, with roughly $18 million of that going to Democrats. Comcast Chairman and CEO Brian Roberts and Executive Vice President David Cohen also have close ties to the Obama administration. They raised millions for President Barack Obama’s campaigns.

Posted April 22, 2014 by edmcgon in Earnings Season, News, Politics, Stocks

April 21st: Ed’s Daily IRA Summary   1 comment

Just one daytrade today:

OVERALL: +0.05%

Posted April 21, 2014 by edmcgon in Open Thread, Portfolio

Follow

Get every new post delivered to your Inbox.

Join 83 other followers