SUMMARY OF THE FIRST QUARTER
The DOW closed at 10,856
The S&P closed at 1,169
The NASDAQ closed at 2,397
Let’s see the results of my recommendations for this quarter.
JASO on 2/28/2010 was recommend to buy at $5 a share on 3/30/2010. It traded at $5.90 - a gain of almost 20% .
SOLF on 2/28/2010 was recommended to buy at $6 a share. Today it traded at $7.95 - up almost 33% .
MSFT was recommended 3/2/2010 to buy at $28.50. On 3/28/2010 it traded at $30.50-up almost 9%.
C on 3/4/2010 was recommended to buy at $3.40. On 3/28/2010, it traded at $4.35- a gain of 33%.
AMAT was recommended to buy on 3/9/2010 at $12.40 a share. Today, it traded at $13.73- up almost 11%.
Additionally, there were buy recommendations issued on other stocks last month. I shall revisit them next month to see how they appreciated.
The point is, investors selling stocks to secure a profits it is what is all about. Sometimes a profit can be achieved in few days and sometimes they have to wait weeks or months. Therefore, each time the opportunity comes along to secure a profit, TAKE IT.

Citi shares feel the heat as Treasury prepares to sell stake 03/29 02:57 PM


Citigroup Inc. (C:$4.06,00$-0.12,00-2.87%) declined 3% to close at $4.18 Monday after the Treasury Department said it will begin to unwind its sizable stake in the banking giant this year.
The Treasury plans to sell 7.7 billion shares of Citi it owns as a result of the financial bailout over the course of 2010 subject to market conditions.
"Treasury intends to sell its Citigroup (C:$4.06,00$-0.12,00-2.87%) common shares into the market through various means in an orderly and measured fashion," it said in a statement.
As I said in the past, as soon as ’C’ become free of the Treasury holding the company will do well and the stock price will be much higher by the end of the year.
(See Blog March 4, 2010.)

WET SEAL Inc, (WTSLA)
Wet Seal Inc. Reports Un-audited Consolidated Earnings Results for the Fourth Quarter and Year Ended January 30, 2010; Provides Earnings Guidance for the First Quarter of Fiscal 2010; to Open 25 to 40 Net Stores; Provides Capital Expenditure Guidance for the Full Year 2010.
The Wet Seal (WTSLA:$4.68,00$0.08,001.74%) reports Q4 sales of $151 million, down from $154.9 mln a year ago. Net income was $0.79 per share, vs. $0.04 per share a year ago. Ex a benefit, EPS was $0.10 per share, ahead of the company's guidance of $0.08 to $0.09 per share, and up from $0.09 per share last year. The Street view was $151 mln in revs and earnings of $0.08 per share.
For Q1, the company is guiding for sales between $138 and $140 million, vs. the Street view of $136 million. Today the price of WTSLA is $4.80 a share.
Many institutions, as a general rule, will not invest in a company which it’s stock is trading below $5 a share. As per the guidance of WTSLA it seems to be that the company is on the right track to be a major ten-age choice of shopping destination. If this is the case than WTSLA can earn as much as a $1 a share for the year 2011, and the stock price can reach $12 a share by the end of the year

STOCK MARKET AT 18 MONTHS HIGH
At 11:30 am the DOW was up over 100 points to 10933, the S&P was trading at 1178 while the NASDAQ was up 30 points to 2428. All those markets were at 18 months high. About 50 companies which are part of the S&P 500 were trading at 52 weeks high.
At the same time the US BONDS lose ground. The 10 years bonds were trading at 97.875 with a yield of 3.90 In other words, a $1,000 face value 10 years bonds is valued today only at $978.75
So, where are we going from this point.
The stock market is a forward looking mechanism . It tells us that companies will do very well in the next six to nine months, The economy will improve somewhat while the unemployment will stay high.
The stock market will keep going up, and the value of US bonds will go down.

Home-builder sector up slightly as new-home sales slow 03/24 08:39 AM

Home-builder stocks showed gains on Wednesday even as government data showed a continued slowing of new-home sales.
Lennar Corp. (LEN:$17.90,00$0.84,004.92%) led the pack with gains of 4.7% after the home builder's first-quarter loss narrowed to $6.5 million, or 4 cents a share, as revenue fell 3.1% to $574.4 million, beating Wall Street estimates. Lennar (LEN:$17.90,00$0.84,004.92%) , however, reported that new home orders for the quarter rose 18% to 2,577.
Other home builders showed gains on the day. Hovnanian Enterprises Inc. (HOV:$4.875000,$0.205000,4.39%) shares rose 3%. Shares of “BZH’ rose to $4.90 a share , up 2%. Sales of new homes fell for the fourth-straight month according to February data to its lowest rate since the Commerce Department started keeping figures in 1963. Seasonally adjusted, new-homes sales declined 2.2% to an annual pace of 308,000. The number of new homes for sale increased 1.3% to 236,000, or a 9.2 month inventory based on the current sales rate.

SAKS, Inc (SKS)
Today, J. P. Morgan raised ‘SKS’ to overweight from neutral. They had a target price on the stock at $7 a share. Yesterday ’SKS’ closed at $8.76 way over J. P. Morgan target price. Where they were when the stock was trading as low as $6.25 earlier this year ? It is an example how analysts” take a cover” after a stock move up or down and the only way to be right is to change their opinion on a stock after it made it’s move.
I personally believe that ’SKS’ will move much higher to as high as $20 a share by the end of the year, also there is the possibility that the company will be a target of “take over”.
COLDWATER CREEK, Inc (CWTR)
At $7 a share, I believe ‘CWTR’ that it is a under value. The company had it’s challenges in the past and with some personal changes it moves in the right direction. Sales will increase, as the economy getting better and with inventory control ’CWTR‘ can reach $12 a share

Monday after Quadruple Witching.
As written on Friday, the DOW reversed itself and was up 40 point during the morning . The same amount it lost on Friday. This reversal was exactly as I anticipated.
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Many of the stocks that closed Friday were just under strike price also reversed their course. Listed below are just a few examples,
STX closed Friday under just under $19 a share . In today’s the morning trading, the stock rose to over $19.50.
MU closed Friday under $10 a share . On opening this morning, the stock rose to $10.25 a share .
Others such ax BX, C, RFMD and many more followed suit.
On the flip side, stocks that closed over their strike price opened down. Owners of the calls sold the stocks in order to profit from the application of the options. Just one example was AMD . AMD closed Friday at over $9 a share. The stock opened on Monday morning trading as low $8.80. Once again there are numerous examples to validate my claim.

Today is Quadruple Witching. (see blog March 15)
Without any reason, the Dow closed down 40 points at 10,738. The NASDAQ lost 16 points
to close at 2,374. The S&P lost 7 points to close at 1,159.
Volatility occurred due to the expiration of Quadruple Witching options. Some stocks closed just under the strike price. Therefore on Monday morning, those stocks will still be in the owners’ portfolio. Here are some examples:
RFMD closed at $4.95. During the week, it traded over $5.00 a share. RFMD is anticipated to open higher Monday morning.
STX closed at $18.96 after trading most of the week above $19 a share. It is most likely to open higher Monday morning.
MU closed at $9.96 after trading most of the week above $10 a share. It too is likely to open higher Monday morning.
BX closed at $13.99 after trading above $14 a share most of the week. The stock likely open higher Monday morning.
Some stocks closed above options expirations and are most likely to open down Monday morning.
Below are some examples
AMD closed at $9.15.
INTC closed at $22.01
AMZN closed at $130.30
If no major events occur this weekend, the stock market is likely to open higher Monday morning.

PRODUCER PRICE INDEXES - FEBRUARY 2010
The Consumer Price Index (CPI) program produces monthly data on changes in the prices paid by consumers for a representative basket of goods and services.
The Consumer Price Index for February 2010 was seasonally adjusted. As reported by U.S. Bureau of Labor Statistics today, the Consumer Price Index (CPI-U) remained unchanged for February 2010 . Over the last 12 months, the index has increased by 2.1% before seasonal adjustment.
The U.S. Bureau of Labor Statistics reported today, after seasonally adjusted, the Producer Price Index for Finished Goods declined 0.6% in February. This decrease followed a 1.4% advance in January and a 0.4% percent increase in December, 2009. At the earlier stages of processing, prices received by producers of intermediate goods increased- up 0.1% and the crude goods index fell 3.5%. On an unadjusted basis, prices for finished goods advanced 4.4% for the 12 month period that ended in February 2010.
The “CPI” and the “PPI” are the cost of all items LESS the cost of FOOD and ENERGY. Food and energy statistics are the most important for the consumers and in those areas inflation is rapidly increasing. The government statistics are misleading consumers.

The Stock market reach it’s highest point for 2010.
During the trading day, the Dow reach 10750, the NASDAQ was trading at 2390 and the S&P reach 1165.
Technology Select Sector SPDR approaching 52-week high 03/17 10:44 AM
The Technology Sector (XLK) is nearing its 52-week high, which was set at the start of the year, at $23.30. Given the heavy weight in the S&P 500, at over 21%, a breakout move as we have seen now in the Financials (XLF), Consumer Staples (XLP), Consumer Discretionary (XLY), and the Industrials (XLI), could be necessary ingredient for reaching the much-hoped-for1200 area. As a reminder, this was the area from which the index collapsed in October 2008. On a breakout above $23.30, the following resistance levels could become additional upside objectives: $23.41, $23.83, $24.26, $24.65, $25.05. Support is currently at $22.62, the 10-day moving average and the uptrend support line proxy for the short-term move.
Financial ETF doubles in a year (XLF) 03/17 11:23 AM
The rally in the Financial Select Sector SPDR Fund on Wednesday means the exchange-traded fund has more than doubled in value from a year ago. The ETF set a new 52-week high of $15.97 a share on Wednesday. One year ago on March 17, 2009, the fund touched a session low of $7.87, according to data from FactSet Research.
The only reason why the market will not continue higher today is because option expirations this Friday.
(see BLOG March 15,)

IS IT TIME TO LOOK AT HOME BUILDERS ?
The real estate in the United States will rebound soon. No one can predict the precise moment it will occur. However, indications are that the worst is behind us.
During the last few years, housing inventory has been depleted. Interest rates are historically low. With the prospect that interest rates will rise soon, buyers who sat on the fence, will make their move and purchase a home.
Organically, the population in the USA is growing. New immigrants are likely to purchase a house at once, as they did in the old country.
On the other hand, foreclosures and short sales are historically high. Those people who lose their houses will move lower cost accommodations. Buyers of those properties are real home owners and investors who are looking for a long term investments.
The two companies I believe will do very well in the near future are;
Hovnanian Enterprises. Inc (HOV) and Beazer Homes USA, Inc (BZH)
Hovnanian (HOV:$4.49,00$0.17,003.94%) earlier this month reported net income of $236.20 million for the fiscal first quarter - its first profit since 2006. Hovnanian received a $291.3 million tax benefit.
Beazer Homes was recently up 22c to $4.94 on renewed takeover chatter. The BZH April option implied volatility is at 67, May puts are at 64 - below its 26-week moving average of 88. Additionally, call option volume of 5,767 contracts compares to put volume of 50,976 contracts according to Track Data, suggesting traders taking positions for price movement.
Buy ‘HOV’ at around $4 a share. The target price by the end of the year is $10 a share.
Buy ‘BZH’ at below $5 a share with target price at $12 a share by the end of the year.

QUADRUPLE WITCHING OPTION EXPERATION.
Alert: Friday March 19 , 2010 Quadruple Witching of Option Expirations

Quadruple Witching
What Does Quadruple Witching Mean?On this day, all contracts for stock index futures, stock index options, stock options
and single stock futures (SSF) expire. Quadruple witching days occurs on the third Friday of March, June, September and December of every year.
Historically, Quadruple Witching is a very volatile trading day. Additionally, in most instances the following Monday, we can observe the reverse of what the market did on Friday of quadruple witching.
In the last few years, investors have learned to accept the volatility that occurs. Trading can be heavy and volatile a few days prior to quadruple witching.
Many times stocks will close that Friday just below the option expiration strike price. For example the stock of XYZ may close Friday trading at $9.98, a few cents below $10 strike price. At that point, the option expire worthless and the owner will keep the stock in his portfolio.
If Friday is a down day, the investor will have the opportunity to buy the stock of his/her choice. If Friday closes up, then the investor will have the opportunity to sell stocks with the anticipation of buying them back the following Monday at much lower price

STOCK IN THE NEWS, A STRONG BUY.
Target price $20 per share.
National Semiconductor Corporation Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended February 28, 2010; Provides Revenue Guidance for the Fourth Quarter of Fiscal 2010; Declares Cash Dividend Payable on April 12, 2010. The yield is 2.28%.

National Semiconductor Corporation (NSM:$14.36,00$0.02,000.14%) reported unaudited consolidated earnings results for the third quarter and nine months ended February 28, 2010. For the quarter, the company reported net income of $53.2 million or $0.22 per basic and diluted share on net sales of $361.9 million against net income of $21.1 million or $0.09 per basic and diluted share on net sales of $292.4 million for the same period a year ago. Operating income of $86.0 million compared to $30.3 million a year ago. Income before taxes of $72.4 million compared to $61.4 million a year ago.
For the nine months, the company reported net income of $130.0 million or $0.55 per basic share and $0.54 per diluted share on net sales of $1,020.9 million against net income of $21.1 million or $0.60 per basic share and $0.58 per diluted share on net sales of $1,179.6 million for the same period a year ago. Operating income of $210.2 million compared to $253.4 million a year ago. Income before taxes of $172.1 million compared to $193.2 million a year ago. Net cash provided by operating activities of $246.2 million compared to $292.2 million a year ago. Purchase of property, plant and equipment of $25.9million compared to $75.7 million a year ago.
The company is projecting revenues to be between $375 million and $390 million (up approximately 4% to 8 sequentially) in the fourth quarter of fiscal 2010.
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ECONOMIC CALENDAR
Most investors know by now the value of economic indicators. In general, they indicate how the economic condition of the country and offer a glimpse into the near future. Some indicators are more important than others. Some have no value at all except to provide headlines for the media. For example during the month of March 2010, the calendar had no less than 58 indicators. Some days had as many as six indicators.
Let’s look at them:
March 1, 1). Personal Income and Outlays. 2). ISM Manufacturing Index. 3). Construction Spending.
March 2, 1.) Motor Vehicle Sales.
March 3, 1). Challenger Job Cut. 2). ADP Employment report. 3). ISM Non Manufacturing Index.
4). EIA Petroleum report.
March 4. 1). Monster Employment report. 2). Jobless Claims. 3). Productivity and Cost. 4) .Factory orders.
5). Pending Home sales Index . 6.Money Supply.
March 5. 1). EMPLOYMENT SITUATION. 2). Consumer credit.
March 10. 1). Wholesales Trade. 2). EIA Petreleum Status Report.
March 11. 1).International Trade. 2).Jobless claims. 3) .Money Supply.
March 12. 1).Retail Sales. 2).Consumer sentiment. 3).Business Inventories.
March 15. 1).Empire State Manufacturing Index. 2). Treasury International Capital. 3).Industrial Production.
4). Housing Market Index.
March 16. 1). Housing Start. 2).Import and Export Prices. 3).FOMC Meeting Annoncment.
March 17. 1). PRODUCER PRICE INDEX. 2).EIA Petroleum Report.
March 18. 1). COSUMER PRICE INDEX. 2) .Jobless Claims. 3). Current Account. 4). Leading Indicators.
5). Philadelphia Fed Survey. 6). Money Supply.
March 19. QUADRUPLE WITCHING OPTION EXPERATION.
March 23. 1.) Existing Home Sale.
March 24. 1). Durable Goods Order. 2). New Home Sales. 3).EIA Petroleum Report.
March 25. 1) .Jobless Claims. 2). Money Supply.
March 26. 1). GDP. 2). Corporate Profit. 3). Consumer Sentiment.
March 29. 1). Personal Income and outlays.
March 30. 1). S&P Case Shiller HPI. 2). Consumer Sentiment. 3) . State Street Investors Confident Index.
4). Farm Prices.
March 31. 1). ADP Employment Report. 2) .Chicago PMI. 3). Factory Outlay. 4). EIA Petroleum Report.
So which one of those is important? My opinion is that only those in Capital Letter are worthy to watch for.

MERGERS AND ACQUISITIONS(M&A)
Dealmakers predict an up tick in mergers and acquisitions (M&A) in the year 2010. According to a survey by the Association for Corporate Growth, corporate and dealmakers anticipate an increase in M&A this year. The manufacturing, financial services and health care sector are expected to lead the way.
The latest data suggests that during year 2010, 642 acquisitions worth $32billion has been announced by U.S. companies for targeted assets within the USA and around the world.
There are several different thoughts regarding M&A. However according to my opinion, many companies are still trading below their intrinsic value. In other words, it is “cheaper” to buy an existing company then to establish a new company from scratch in the same business. Today there are many cash rich companies. In order to grow their business, a buyer prefers to buy a “cheap” company with a bright future, offering a buyer excellent opportunities.
In conclusion the next few years, we will see an increase in M&A. Companies will be sold at a premium to their current stock prices. The acquired company will free up dollars in order for investors to purchase stocks of other companies.

Stock of the day.
APPLIED MATERIALS, Inc. (AMAT)
‘AMAT’ is a global leader in Nano-Manufacturing Technology and solutions with a broad portfolios of innovation equipments. Also the company provide equipments, services and software products for the fabrication of semiconductors chips, flat panels, solar photovoltaic cells and flexible electronics and efficient glass panels.
Worldwide spending on semiconductors fabrication equipments is expected to rise sharply during the year 2010, fuelled by a rebounding chip market according to the industry group. According to GARTNER Inc, Chip spending will rise over 77% this year vs. last year, to as much as 30B Dollars.
‘AMAT’ is going to be one of the beneficiary of this trend. On March 8, 2010 the company increased it’s dividend 17% to a yield of 2.27%, and a buyback of $2B of it’s own stock.
When a company buy it’s own stock it is believed that the stock is under value at current market prices, also when a company increase it’s dividend pay out it show a better profit in the near future.
According to my opinion ’AMAT’ is a strong buy with a target price of $20 a share by the end of the year.

IS THERE IS A BUBBLE IN US BONDS?
Today the US Government 10-Year bonds traded at 99.27 and yielded 3.71%. In other words, a bond that had a par value of $1,000 at maturity was currently trading below par at $992.70.
U.S. interest rates currently are historically low. Because of the recession, the Federal Reserve has kept interest rates artificially low in order to stimulate the economy.
One of the mandates of the Federal Reserve is to fight inflation. One tool at their deposal is to increase interest rates.
As the economy recovers and the unemployement numbers decline, the U. S. Federal Reserve will begin to increase interest rates. The moment they begin to do so, the interest rate increases will be frequent and dramatic. The result will be a decrease in the value of the U.S. 10 Years Bonds. It is very possible that the bonds can lose as much as 30% of their value in the next two years.
According to the latest Wall Street survey , most of the new money invested in Wall Street was invested in bond funds. Because of the latest market volatility, many investors feel more secure in the Bond market without any understanding that their losses could be significant. Additionally understand that upon maturity, the bond will be paid their full par value. The question is “do investors want to wait ten years to get their money back” ?

Today, the US February unemployment report was released at 8:30 am. It revealed that another 36,000 American workers lost their jobs. Unemployment remained at 9.7%. The market expected worse numbers then reported. Therefore, at opening the stock market rose 95 points.
According to some statistics, the real unemployment number is 14.8 millions. I personally am skeptical regarding the numbers released today. I anticipate a revision of these figures. It is commonplace for the US government to revise numbers within a month, no matter what the report is issued.
SOLAEFUN POWER HOLDINGS CO. LTD “SOLF”
Yesterday “SOLF” reported their earnings for last quarter. The company returned to profitability and anticipates their 2010 volume of their shipments to be up 20%, from 500MW to 600MW. Prices for PV modules are about $1.95 per unit. As the development of solar energy becomes cheaper, it will be more affordable for buyers to purchase and use this technology. Therefore, it will become more practical for the masses to use. Future earnings can only improve.
In the past, I recommended this company. The 52 week low is about $2.28 a share and the 52 week high is $10.78. According to my opinion, the stock trading today around $7 a share is a buy.

Today’s trading was extremely cautious in anticipation of the February’s monthly jobs report due to be released tomorrow at 8:30 am.
This report is released once a month on the first Friday of each month. Many times the market reacts drastically to this report. Reaction to the report is usually short lived. For the most part by the next day, no one seems to care about the results. It is a great opportunity to sell stock if the report is positive. However if the report is disappointing, it is a good opportunity to purchase stock. At the end of the day, reversing the trade can turn out to be a good short term trade.
Today the CEO of CITIGROUP (C ) Vikram Pandit testified in front of the TARP panel. During his testimony he made very interesting points. It seems that “C” is on the road to a full recovery.
The bank has changed their methods of operations and will return to profitability within a short time. The big cloud hanging over “C” is the government. As of today, US Treasury Department has a huge investment in CITIGROUP. The US Treasury has 25 Billion dollars invested and owns about 27% of “C” stock.
The Treasury Department has plans to sell a large chunk of the stock at the end of March, after the lockup is over. The belief is that at one point “C” will repay their obligations to the Government. At that point, “C” will trade as a public company, free of US Government controls.
Currently the stock is trading around $3.40 a share. I believe that after the Treasury Department will sell their shares at the end of March, the stock will rise dramatically. I think that the stock can finish the year at over $5.00 a share. A 50% return on your money from today‘s closing price.

A STOCK ANALIST ON WALL STREET CAN BE WRONG ALL HIS/HER LIFE, YET PEOPLE WILL KEEP LISTENING TO HIM/HER.
Here is just one of thousands of examples.
BANCO SANTANDER CENTAL (STD).
On February 24, 2010, “STD” was downgraded by BARCLAY CAPITAL from equal weight to underweight. In other words, sell the stock. “STD” was trading that day at $12.70 a share. Today March 3, 2010, the stock is trading at over $13.75 a share. A gain of over 8% for this week.
According to my opinion, “STD” is a buy at any price below $12.50 a share. The bank’s EPS (earnings per share) is over $1.50 a share. The P/E (price earnings ratio) is about 9. The dividend of 6.75% is fairly secure.
As always, markets are created by buyers and sellers. The buyer will purchase a stock because the investor believes that the stock will go up. Conversely, the seller will sell the stock because he believes that the stock will go down. The challenge for investors is to choose whether to be a buyer or seller

STOCK OF THE DAY
MICROSOFT CORPORATION (MSFT)
MSFT is trading today at $28.50 a share. The company is one of the most successful corporations on Wall Street. MSFT has almost $40 billion in cash while the operation generates almost One Billion Dollars net a month. During this year, MSFT unveiled their new operating system (WINDOW 7) and are scheduled to release their business upgrade of OFFICE and WORKS. The future is very promising and the stock is poised to go significantly higher.
Here are possibilities of how to trade MSFT.
Buy the stock outright and wait for the stock to appreciate. The target price is $33 a share within six months.
Buy the stock at $28.50 today and to sell covered calls against it. The calls should be for July 2010.
As example, buy 1,000 shares at today price and the cost will be $28,500. By selling covered calls for
July 2010 with a strike price of $30, a $1,000 premium is earned. The net cost of the stock will be only
$27,500 and the owner has to hold the stock till option expiration (July 1, 2010). If MSFT will be over
$30
a share, the owner will lose the stock and will pocket a $2,500 profit-a gain of almost 10% for 5 months.
Sell April 2010 puts with a strike price of $28 against MSFT for $650. If MSFT dips below $28 a share within two months, the stock will be given to the owner at $28 a share. For example, the owner will receive $650 for the obligation to buy 1,000 shares at $28 each. The net cost for the owner will be only $27,350 for 1,000 shares of MSFT. That is considerably lower than today trading price. However if the stock during the next two months will stay above $28 a share, the owner will pocket the premium of $650 without ever buying the stock.

The Semiconductor Industry Association (SIA) announced on Monday, March 12010 that worldwide chip sales in January rose to $22.5 billion. A significant 47.5% increase from the same month a year ago. Additionally, chip sales were higher in January 2010 from December 2009.
This confirms the recommendation of February 24, 2010 regarding the upgrade of computers and software in order to improve productivity and to stay current in difficult business conditions. In the past I recommended some stocks that will be winners this year. Add to the list APPLIED MATRIALS, Inc (AMAT) and MICRON TECHNOLOGY, Inc (MU).
Take Over Potential.
It is extremely likely that E*TRADE FINANCIALS CORPORATION ’ETFC’ will be taken over this year by one of the largest discount brokerage houses -perhaps Charles Schwab or Ameritrade It is very difficult for the largest brokerage houses to grow organically. Therefore in order to increase their accounts and cash potential from market money accounts, they need to acquire a smaller brokerage firms.