Friday, October 27, 2006

Market Update

In my existing accounts I bought some Microsoft shares this morning in anticipation of this evening's earnings release. I remain long QQQQ. The model is long but tomorrow could be a turning point unless the stochastic rises above 80. If today's close is strong that is possible. At the moment the market is down a bit due to the fall in new home prices announced at 10am of 9.7% since September 2005. This was the biggest fall year on year since that index started keeping records. Sales of new homes though increased and the housing sector ETF, XHB is up.

4:49pm Update

Turned out to be a very good trading day. Berkshire Hathaway B (BRK/B) shares rose $98! Unfortunately I only own one share :( I did some day-trading of Redhat (RHAT) which fell more than 25% and then rebounded a little. I also bought Microsoft (MSFT) shares in anticipation of this evening's earnings. Though Microsoft beat analysts' expectations by more than 10%, some traders initially thought they were guiding to a much lower earnings number for next quarter. Turns out they expect to earn roughly in line with analysts' estimates but are deferring a third of the income to the following quarter due to Vista related issues. Also bought shares in Hudson City Bank Corp (HCBK) - a New Jersey based thrift. Not sure if this is a position trade or an investment. Will have to see what happens. There is a chance that it will be added to the S&P 500 soon. Also it has a large amount of excess cash for a bank and is buying back shares. However, the P/E is very high for a bank and so these expectations may already be built into the price. On the other hand with all that cash it should do fine if the housing market really implodes and maybe be in a position to acquire other banks down the road?

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