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[setravis]

IBM authorizes $10B stock buyback...

ARMONK, N.Y. (AP) — IBM Corp. on Tuesday said its board approved an additional $10 billion in stock buybacks, representing nearly 6 percent of the computer company's outstanding shares.

IBM says the new buyback authorization adds to $2.3 billion remaining from a previous $8 billion authorization, issued in April.

The company also said it plans to request permission to buy even more shares at its next April board meeting.

IBM shares rose $1.07 to $140.91 in morning trading.

Companies often use buybacks to take advantage of low stock prices, but IBM's stock is close to its all-time high of $143.03, hit Oct. 18, just before it reported its third-quarter results.

IBM also said its board maintained the company's 65 cent quarterly dividend.

"IBM's higher value, higher margin business strategy has enabled the return of $91 billion since 2003 to our shareholders through share repurchases and dividends," Samuel J. Palmisano, IBM chairman, president and CEO, said in a statement.

[setravis]

Ten Stocks With Extreme Investor Optimism...

The following is a list of stocks seeing excessive optimism, as defined by analyst ratings, institutional ownership trends and options market activity.

All of these stocks have analyst ratings of "Buy" or better. Analyst ratings are presented on a linear scale, with ratings close to 1 indicating a "Strong Buy" analyst recommendation. Analyst ratings sourced from Finviz.

All of these stocks have seen institutional inflows over the last three months. Institutional data sourced from Reuters, based on holdings as of Friday, October 22.

All of these stocks have a large number of open call option positions relative to put option positions, i.e. bullish options market sentiment. Options data sourced from Schaeffer's.

Is this extreme optimism justified? If you're a contrarian, this bullishness might raise a flag.

The list has been sorted by change in institutional ownership over the last three months.

1. TriQuint Semiconductor, Inc. (TQNT): Semiconductor Industry. Market cap of $1.47B. Analyst rating at 2.3. Call open interest at 44,168 vs. put open interest at 6,628 (Put/Call ratio at 0.15). Institutional investors currently own 128,789,232 vs. 109,269,790 shares held 3 months ago (+17.86% change). The stock has gained 61.64% over the last year.


2. SIGA Technologies, Inc. (SIGA): Drug Manufacturers Industry. Market cap of $630M. Analyst rating at 1.8. Call open interest at 19,352 vs. put open interest at 3,885 (Put/Call ratio at 0.2). Institutional investors currently own 14,089,556 vs. 12,973,442 shares held 3 months ago (+8.6% change). The stock has gained 94.36% over the last year.


3. Exact Sciences Corporation (EXAS): Biotechnology Industry. Market cap of $315M. Analyst rating at 1.4. Call open interest at 56,393 vs. put open interest at 19,089 (Put/Call ratio at 0.34). Institutional investors currently own 18,182,294 vs. 17,472,989 shares held 3 months ago (+4.06% change). The stock has gained 190.0% over the last year.


4. Genesis Energy LP (GEL): Oil & Gas Pipelines Industry. Market cap of $1.03B. Analyst rating at 1.8. Call open interest at 1,831 vs. put open interest at 794 (Put/Call ratio at 0.43). Institutional investors currently own 10,755,163 vs. 10,425,765 shares held 3 months ago (+3.16% change). The stock has gained 61.6% over the last year.


5. Crosstex Energy LP (XTEX): Independent Oil & Gas Industry. Market cap of $691M. Analyst rating at 2.4. Call open interest at 630 vs. put open interest at 137 (Put/Call ratio at 0.22). Institutional investors currently own 16,457,137 vs. 16,134,580 shares held 3 months ago (+2.0% change). The stock has gained 101.46% over the last year.


6. Taseko Mines Ltd. (TGB): Copper Industry. Market cap of $1.16B. Analyst rating at 2. Call open interest at 40,939 vs. put open interest at 11,834 (Put/Call ratio at 0.29). Institutional investors currently own 40,863,311 vs. 40,295,009 shares held 3 months ago (+1.41% change). The stock has gained 101.94% over the last year.


7. Domtar Corporation (UFS): Paper & Paper Products Industry. Market cap of $3.18B. Analyst rating at 2.2. Call open interest at 13,476 vs. put open interest at 1,588 (Put/Call ratio at 0.12). Institutional investors currently own 41,652,097 vs. 41,109,465 shares held 3 months ago (+1.32% change). The stock has gained 71.78% over the last year.


8. Sinclair Broadcast Group Inc. (SBGI): Broadcasting Industry. Market cap of $654M. Analyst rating at 2.4. Call open interest at 242 vs. put open interest at 60 (Put/Call ratio at 0.25). Institutional investors currently own 36,870,127 vs. 36,515,821 shares held 3 months ago (+0.97% change). The stock has gained 63.45% over the last year.


9. Sapient Corp. (SAPE): Business Software & Services Industry. Market cap of $1.73B. Analyst rating at 2. Call open interest at 666 vs. put open interest at 114 (Put/Call ratio at 0.17). Institutional investors currently own 100,426,902 vs. 99,518,187 shares held 3 months ago (+0.91% change). The stock has gained 54.09% over the last year.


10. Brigham Exploration Co. (BEXP): Independent Oil & Gas Industry. Market cap of $2.44B. Analyst rating at 2. Call open interest at 39,058 vs. put open interest at 13,891 (Put/Call ratio at 0.36). Institutional investors currently own 94,462,047 vs. 93,753,596 shares held 3 months ago (+0.76% change). The stock has gained 98.11% over the last year.

[setravis]

4 Breakout Oil Stocks To Watch...

Commentary: In technical analysis, many consolidation patterns have names associated with them due to the shape that forms on the chart. While many traders get caught up with the names and whether the patterns develop perfectly, it is much more important to think about the psychology behind the pattern and why market participants are acting in a certain manner. The ascending triangle is usually a continuation pattern, and the key point traders need to understand is that this pattern often serves as a rest stop for a stock in an uptrend.


When a stock is in an uptrend, it will eventually start to lose momentum as traders who were long begin to take profits. Once buyers and sellers reach a stalemate, the stock will enter a period of consolidation where shares will be exchanged among traders betting on a continuation and other traders betting on a reversal. In an ascending triangle, the stock will typically stall at a fixed price level as it tests the top of the pattern. However, buyers will begin to buy at higher prices on dips, forming higher lows as the pattern progresses. Eventually, the stock will break out of one side of the triangle, confirming the pattern as either a continuation or reversal.

Recently, many oil pipeline stocks cleared an ascending triangle. This could mean a trend move higher for the sector is in the works. For instance, Boardwalk Pipeline Partners LP (NYSE:BWP) settled into an ascending triangle from July through September. It cleared the triangle later in September and after a run to $34 it has settled into a pullback toward the breakout area. The $32 level should be monitored for support; if BWP holds up in this area it could lead to a move to new highs.

[setravis]

4 Breakout Oil Stocks To Watch...

El Paso Pipeline Partners LP (NYSE:EPB) just finished breaking out of an ascending triangle a few days ago. One important aspect to look for in a triangle is whether the consolidation becomes more volatile and the stock's trading range narrows over time as traders reach an equilibrium. Notice how the trading range in EPB began in August at almost 4 points and eventually narrowed to under 1 point. This is typically a clue that consolidation is nearing an end.

[setravis]

4 Breakout Oil Stocks To Watch...

Atlas Pipeline Partners, L.P. (NYSE:APL) is another pipeline stock that recently cleared a triangle as well. APL formed an ascending triangle from August through October after a sharp gap higher in late July. APL never traded back into the gap, providing a clue that it would eventually resume its uptrend. APL eventually cleared the triangle in October, but has continued trading in a tight range. Traders should monitor the $20 level as the new breakout area.

[setravis]

4 Breakout Oil Stocks To Watch...

Commentary: In technical analysis, many consolidation patterns have names associated with them due to the shape that forms on the chart. While many traders get caught up with the names and whether the patterns develop perfectly, it is much more important to think about the psychology behind the pattern and why market participants are acting in a certain manner. The ascending triangle is usually a continuation pattern, and the key point traders need to understand is that this pattern often serves as a rest stop for a stock in an uptrend.


When a stock is in an uptrend, it will eventually start to lose momentum as traders who were long begin to take profits. Once buyers and sellers reach a stalemate, the stock will enter a period of consolidation where shares will be exchanged among traders betting on a continuation and other traders betting on a reversal. In an ascending triangle, the stock will typically stall at a fixed price level as it tests the top of the pattern. However, buyers will begin to buy at higher prices on dips, forming higher lows as the pattern progresses. Eventually, the stock will break out of one side of the triangle, confirming the pattern as either a continuation or reversal.

Buckeye Partners L.P. (NYSE:BPL) is an example of a pipeline that has not cleared its ascending triangle yet. BPL has been consolidating since August, and is currently testing the top of the triangle. Traders should monitor the $65 area as the breakout level, and $62.50 as a mark of a breakdown from the pattern.


Bottom Line
It's interesting that so many stocks in the same sector are following a similar pattern. Institutions will often accumulate a basket of stocks in a sector and it's possible that this is occurring in this group. While there could be a variety of catalysts for accumulation in this sector, the bottom line is that the charts are showing indications of a possible trend move higher. Traders should monitor the key levels identified by the triangle pattern and act accordingly.

[setravis]

Nasdaq stocks posting largest percentage increases
Top 10 Nasdaq-traded stocks posting largest percentage increases
On Friday November 5, 2010

A look at the 10 biggest percentage gainers on Nasdaq at 1 p.m.:

Telular Corp.(NASDAQ: WRLS)  rose 42.5 percent to $5.77
Universal Electronics Inc.(NASDAQ: UEIC)  rose 30.5 percent to $27.72
Asia Entertainment & Resources Ltd. (NASDAQ-GM:AERL) rose 22.3 percent to $9.87
TTM Technologies Inc. (NASDAQ: TTMI)  rose 20.7 percent to $13.76
LiveDeal Inc. rose 19.5 percent to $7.48
ePlus Inc.(NASDAQ: PLUS)  rose 19.2 percent to $25.03
Dehaier Medical Systems Ltd.(NasdaqCM: DHRM)rose 16.0 percent to $5.74
Jazz Pharmaceuticals Inc.(NASDAQ: JAZZ)  rose 14.1 percent to $14.15
Atmel Corp.(NASDAQ: ATML)  rose 13.8 percent to $10.16
Canterbury Park(NASDAQ: CPHC)  rose 13.6 percent to $10.40.

[setravis]

NOVEMBER 11, 2010...
Obama Has a Listening Problem  "You've got the talking down/Just not the listening." 
The idea that government can spend our way to prosperity doesn't make sense to voters...

By KARL ROVE
The rock star Sara Bareilles sang at President Barack Obama's Las Vegas rally for Sen. Harry Reid in October. Her biggest hit, "King of Anything," includes the lyrics, "You've got the talking down/Just not the listening." That pretty well sums up Mr. Obama's reaction to last week's midterm.

The president rejects the idea that voters don't like his policies on jobs and the economy. At his White House news conference last Wednesday, Mr. Obama observed, "If right now we had 5% unemployment instead of 9.6% . . . people would have more confidence in those policy choices."

Well, yes. But isn't unemployment much closer to 10% than 5% because the stimulus package didn't work as the president promised it would when he signed it? Mr. Obama's narrative that the economy's condition has nothing to do with his policies is nonsense.

When asked at the same news conference if he felt there was "a majority of Americans who think your policies are taking us in reverse," Mr. Obama waved off the criticism, saying that the "American people understand that we're still digging our way out of a pretty big mess."

Wrong again. Mr. Obama doesn't seem to understand that the midterm "shellacking" his party took was an explicit rejection of his policies, especially by independent voters.

This is borne out by a post-election poll released Tuesday by Democrat James Carville's Democracy Corps and Republican Ed Gillespie's Resurgent Republic. The survey found that 56% of independent voters voted for GOP candidates while just 38% voted Democratic, a 36-point swing from the 2006 midterm and a 26-point swing from the last presidential election.

Independents now look much more like Republicans than like Democrats—79% believe the country is on the wrong track and they're more than twice as likely to blame President Obama and the Democrats than to blame President Bush and Republicans.

Independents share the GOP view that the government is doing too many things better left to businesses and individuals. They trust the GOP more than Democrats on jobs and employment (50%-27%), the economy (48-25), government spending (50-23), the federal budget deficit (53-17), and taxes (54-23). A majority (51%) support extending all the Bush-era tax cuts even after hearing Mr. Obama's best arguments against extending them for people making over $250,000.

Instead of acknowledging the need for policy correction, Mr. Obama offers the now familiar excuse that it's all a communication problem. As he told the National Journal's Ron Fournier in October, his policy successes were "a lot for me to be able to communicate effectively to the public in any coherent way."

But the problem is not with the capacity of voters to grasp the brilliance of Mr. Obama's policies. Rather, the idea that government can spend our way to prosperity doesn't make sense to voters. The more they heard Mr. Obama talk about this approach, the more they rebelled.

Something similar happened with health care. The president dismisses the notion that last week's results were a rejection of ObamaCare, saying at his White House news conference that it would be "misreading the election" to argue "the American people want to see us for the next two years relitigate arguments that we had over the last two years."

But that's exactly what voters want. The Democracy Corps/Resurgent Republic poll found that 51% of all midterm voters and 57% of independents believe ObamaCare should be "repealed and replaced."

In the wake of last week's epic rebuke, Mr. Obama has two historical models to follow. He can react as President Bill Clinton did after Democrats' 1994 defeat and move to the center, which resulted in two of Mr. Clinton's greatest achievements: a balanced budget and welfare reform. Or he can emulate Harry Truman in 1947-48, sticking hard to a liberal agenda and fighting the congressional GOP for obstructing it.

It will be difficult for Mr. Obama to channel Mr. Clinton, who was a Third Way Democrat and politically nimble. In addition, after the 1994 midterms, Mr. Clinton was freed of the baggage of HillaryCare, which failed to become law. Mr. Obama is stuck with his deeply unpopular health-care reform.

But it may be even more difficult for him to pull off a Truman. It's hard to run against a "do nothing" Congress when your own party controls the Senate and the GOP's agenda is more popular than yours.

Mr. Obama is in a pickle without an obvious path to winning back independents. After turning on him so decisively, they may well tell him, in the words of Ms. Bareilles: "You sound so innocent, all full of good intent/Swear you know best/But you expect me to jump up on board with you/Ride off into your delusional sunset . . . Who cares if you disagree, you are not me/Who made you king of anything?"

[setravis]

Massive Insider Trading Investigation Could Nail Wall Street's Biggest Names...
Nov 22, 2010 12:20pm

The government is reportedly close to filing charges in the largest institutional insider-trading investigation in history.

According to initial reports, the investigation could ensnare Wall Street's biggest names: Goldman Sachs, SAC Capital, Wellington, Jennison, MFS Global, Maverick, Citadel, and others. (Here's a who's who of who might get nailed.)

The investigation reportedly focuses on "expert networks" -- consulting firms that pay industry participants to share insights and information with investors. Professional investors use these networks to gather information about real-time business conditions and trends in various industries (as well as, sometimes, information that could likely be characterized as "inside" information in any other context).

No matter where the investigation ends up, the government will likely present it as a huge step toward making the market "fair" for small investors.  And the same small investors will likely view it as confirmation that the "game is rigged."

Both of these conclusions will miss a far more important point.

The REAL lesson most investors should take away from the largest institutional insider-trading investigation in history is that competition in the global financial markets is so intense that it's basically idiotic to trade.

Trading is what is known as a "zero sum game." To win, you have to beat the competition. (And you have to beat the competition by more than the amount that it costs you to trade, which is extraordinarily hard to do, especially after tax).

In our experience, most investors have no appreciation for how intense their competition is. They think, "Wow--look at all this information I have.  Look at all my trading screens. Look at all my SEC filings. Look at my charts and graphs. Look at the smart fellow on TV telling me what to buy. Look at how many of my trades have made money!"

What they miss is that their competition has all this information, too -- so it doesn't give anyone an edge. They also don't understand that, in addition to all this information, the folks they are competing with have millions and millions of dollars to spend gathering information that will never be published anywhere or appear on an screen or chart or graph.

That's where the expert networks come in.  That's where contact networks in general come in.  That's where one-on-one meetings with managements and suppliers come in.

One glance from a CEO in response to a pointed question can contain more information than 500 pages of SEC filings. One nugget of scuttlebutt about the status of an important contract can make you more money than 500 hours of studying charts and graphs.  Most small investors don't understand that their competition gets this sort of information all day long.

In short, it doesn't matter whether the trading game is played on "a level playing field" (and of course it isn't.)  The New York Jets will still destroy any high-school football team, no matter what field the game is played on.

From the perspective of small investors, the game that is played every day in the global financial markets is equivalent to the New York Jets vs. a high-school football team.  And it should be no mystery which team the small investors are playing on.

So what's the smart answer for small investors in a world in which the competition is so unbelievably intense?

Don't play the trading game.

Instead, play a game you can win.

What's that game?

Long-term investing, preferably via low-cost, tax-efficient index funds.

Unlike professional investors, small investors don't have to worry about their performance in a given week or month or year.  They can avoid the second-to-second warfare that defines the professional investment business.  They can be patient and allow Ben Graham's long-term "weighing machine" to eventually do its work.

If they do that, and keep their costs low enough, they'll outperform 75% or more of the professionals.

Just as important, they won't be willingly playing a game they are almost sure to lose.

[setravis]

Insider Trading Is "Everywhere," Matt Taibbi Says: "The Fear Is There's No End to It"
Nov 23, 2010 11:22am

When FBI agents raided the offices of three hedge funds on Monday, the reacton on Wall Street recalled the famous scene in Casablanca where Claude Rain's Capt. Renault character is "shocked, shocked to find that gambling is going on in here."

To Rolling Stone contributor Matt Taibi, author of Griftopia, there's nothing shocking at all about revelations of possible widespread insider trading on Wall Street. (See Massive Insider Trading Probe Could Nab Wall Street's Biggest Names)

"Everybody is trading on the inside somehow or another, so this isn't particularly surprising," Taibbi says. "A lot of sources I talked to suggested this is endemic to the entire culture."

The current investigations center around alleged insider trading prior to merger announcements such as MedImmune's takeover by AstraZeneca in 2007 and Merck's buyout of Schering-Plough in 2009, The WSJ reports.

While gaming takeovers is a "classic" form of insider trading, Taibbi says it's also evident in high-frequency trading, where exchanges provide a millisecond sneak peak at buy and sell orders, or the practice of clients front-running big orders by institutions.

"The real issue here is that it's everywhere," he says. "And the fear is there's no end to it."

Taibbi, who became widely known in financial circles in 2009 when he dubbed Goldman Sachs "a vampire squid on the face of humanity," says he is not cynical by nature. "But this Wall Street stuff is overwhelming," he says. "The more you look into it, the less you see the way out. The government seems so completely helpless to do anything positive in this situation."

[setravis]

Illegal insider trading...

SEC investigation into an insider trading ring among the big banks and hedge funds is just the tip of the iceberg. Also, lots of big banks are holding Irish bank debt and will have to take big losses in the bailout.

Technicals
Close Above the 50-day MA
Most Actives
Percentage Gainer

Last Price Quote is:
6.74%above 13-day MA
1.93%above 50-day MA
RS Rating: 9 

[setravis]

Happy Hedge Fund Raid Day!: Six Hedgies to Know...

So the FBI is getting all Eliot Ness today, uncorking raids of hedge funds in Connecticut and Boston. The Journal has the coverage here, saying the sweeps by the Feds are tied to the big insider trading story it broke over the weekend:

The offices of Diamondback Capital Management LLC and Level Global Investors LP were raided. Both hedge funds are run by former managers of Steven Cohen's SAC Capital Advisors.

The third firm raided is Loch Capital Management LLC, based in Boston, people familiar with the matter say. Leonard Pierce, a lawyer for Loch Capital, declined to immediately comment.

"The FBI is executing court-authorized search warrants in an ongoing investigation," said Richard Kolko, an FBI spokesman, who declined to comment further.

So, it's still early in what Bess Levin over at DealBreaker is calling Insider Trading Fest(ivus) 2010. But we figured we'd lay out some of the leading characters at the firms that were paid a call by the boys in blue Monday. (We stress that nobody has been accused of any wrongdoing.)

Timothy and Todd McSweeney: The brothers founded Loch Capital, a Boston-based hedge fund manager that invests primarily in micro and small cap tech stocks, in 2002, according to a description of the fund on FactSet Lionshares. The Journal reports that the men are acquaintances with Steven Fortuna, a hedge-fund manager who pleaded guilty in the Galleon case and agreed to cooperate in that ongoing investigation.

David Ganek: The former SAC Capital trader and art collector founded hedge fund manager Level Global in 2003. "Level Global Investors invests long/short primarily in the stocks of US companies in the technology services, electronic technology and finance sectors. They invest mainly in mid- to large-cap companies and maintain a high turnover rate," according to FactSet Lionshares. Back in April, Goldman Sachs' buyout unit bought a minority stake in the fund.

Chad Loweth, Larry Sapanski and Richard Schimel: These former SAC traders started Stamford, Conn., based Diamondback Capital in 2005. Loweth left earlier this year. According to FactSet Lionshares, "the firm invests across all market caps. They tend to invest in the finance, retail and health technology sectors." Dow Jones Newswires reporter Joseph Checkler reported a few years back that Diamondback along with other SAC alums seemed especially enamored of biotech and healthcare stocks.

The Journal reached out for comment to all of the funds in question. Leonard Pierce, a lawyer for Loch Capital, declined to immediately comment. Messages left with Richard Schimel, Diamondback's co-chief investment officer, and Diamondback's general counsel, Joel Harary, on their office phones weren't immediately returned.

A spokesman for Level Global said, "We can confirm that agents from the Federal Bureau of Investigations visited our offices this morning as part of what we believe to be a broader investigation of the financial services industry discussed in media reports over the weekend. We are cooperating fully with the authorities and, at the same time, we are fully operational and continue to work diligently for the benefit of our investors."

[setravis]

U.S. Stocks Surge On Bullish U.S., Chinese Economic Data...

The major indexes zoomed in early trade Wednesday, as strong economic data in China and on the home front sent stocks to big gains.

The Nasdaq rocketed 2%, the NYSE composite and Dow jumped 1.8% each, and the S&P 500 added 1.2%. Volume climbed 17% on the NYSE and 14% on the Nasdaq vs. the same period Tuesday.

OmniVision Technologies (OVTI) gapped up 7% in massive trade. Late Tuesday, the maker of digital image sensors posted fiscal Q2 profit of 58 cents a share, topping estimates by a nickel. Quarterly revenue also beat the Street's consensus, and the company issued a fiscal Q3 forecast above analysts' views. The stock cleared a 25.75 buy point at the end of a cup-with-handle base on Oct. 26 and is far extended from that point.

Yanzhou Coal Mining (YZC) rose 5% in rapid turnover. The China-based coal mining stocks is one of many Chinese equities rallying this morning after a report on Chinese manufacturing showed big growth. Yanzhou's stock is rallying after finding support at its 50-day moving average. Its Accumulation/Distribution Rating is just a D, though.

Real D (RLD) gained 4% in heavy volume. The maker of 3D technology used in movie theater viewing went public at 16 a share on July 16. The stock cleared resistance around 20 on Oct. 27 and has nearly doubled from its IPO price.

[setravis]

The Market Message...
SECTOR ROTATION SHOWS BULLISH ENTHUSIASM

A way to determine whether or not investors are turning more optimistic on the economy (and stock market) is to study the trend of recent sector rotations. In an improving economy, investors tend to favor economically-sensitive stock groups. In a weakening economy, they favor defensive stock groups. The charts below reflect a much more upbeat mood on the American economy. The first chart shows relative strength lines for four economically-sensitive stock groups since midyear, and show all four groups rising faster than the S&P 500 (flat black line). In order of strength, they're energy, transports, small caps, and semiconductors. It's always a good sign when those groups are leading the market higher. By contrast, the second chart shows the three weakest groups since August to be healthcare, utilities, and consumer staples. Investors rotate out of those defensive stock groups in a strengthening economy.

[setravis]

Great looking 2 year chart for this stock...