Monday should have been a great rally on the stock markets. With Bank of America posting a profit of $0.40 cents a share when they were only expected to have 5 cents would have been a rally indeed any other time. But with the volatility seen these last few months, it was certain that this would cause a sell off.

Partly due to profit taking on 6 weeks of positive movement, but also, the financial stocks fell heavily Monday on the belief that these profits will not be seen for a while again. Another, probably more bigger issue was the idea that bank shares could be diluted from their current values as government convert their stakes from preferred to common stock in order to prevent banks from asking for more bailout money. This caused all the bank stocks to fall sharply today.

As much as we all hope that the worst is over on the stock front, its evident that there is still deep uncertainty and volatility.

Here is the market summary:

With some big Fortune 500 companies posting earnings this week, it will be interesting to see if the markets can rally back for the remainder of the week. On Monday, I did add to some of my holdings on (C). I know last week I was expecting a rally of sorts with Citigroup and bought a stake to hold for a few days. During that time the stock did go up before coming down. I had a stop loss which I took off hoping to get out on a swing on the upside. Again, that was foolish to take out the stop loss.

My entry price for (C) was 1000 shares at $2.88.

Another play for today was (SKF). This was a nobrainer with the beating the banks took today. I got into this stock early for 100 shares at $63.66 and set a trailing stop loss and a limit sell order and moved on with my daily routine. The stock never dropped during the day and my limit sell of $67.99 was hit. The stock did move higher but I was not watching the stock all day and am content with a profit of any amount.

Total profit on (SKF) = $433

Its been longer than normal that I made a day trade and actually felt good to do one. Hopefully I can bring in some more money this week!

Now looking at Tuesday:

Earnings: (there are many to look for Tuesday)
(AMD) -0.66 (AKS) -0.63 (ALGT) 1.17 (AMP) 0.61 (AME) 0.55 (ARB) 0.54
(ALV) -0.8 (BK) 0.64 (BJS) 0.25 (EAT) 0.29 (BRCM) 0.02 (CHRW) 0.48
(CADE) -0.2 (COF) 0.06 (CSL) 0.16 (CASB) 0.09 (CENX) -0.97 (CHIC) -0.19
(CMA) -0.09 (CREE) 0.11 (CBST) 0.1 (CYMI) -0.22 (DAL) -1 (DD) 0.54
(ELS) 1.08 (FCFS) 0.31 (FBC) -0.24 (FRX) 0.74 (FULT) 0.08 (GILD) 0.59
(HBHC) 0.4 (HGIC) 0.77 (HCBK) 0.25 (HBAN) -0.08 (IBKC) 0.57 (JCI) -0.15
(KEY) -0.2 (LEE) -0.05 (LXK) 0.6 (MTB) 0.75 (MANH) 0.22 (MRTN) 0.14
(MRK) 0.77 (MOLX) -0.07 (NBR) 0.59 (EDU) 0.29 (NSC) 0.56 (NTRS) 0.96
(PNR) 0.23 (PVSW) 0.1 (PPDI) 0.4 (BPOP) -0.4 (DGX) 0.82 (RF) -0.4 (RNST) 0.21
(SGP) 0.47 (SFG) 1.08 (STT) 1.05 (AMTD) 0.23 (TRA) 0.51 (KO) 0.65 (NYT) -0.04
(TSFG) -0.81 (TUP) 0.34 (USB) 0.22 (UMBF) 0.51 (UTX) 0.78 (UNH 0.67 (WU) 0.28 YHOO) 0.08

Economic Indicator:
7:45AM Weekly retail sales
9:00AM Canada Bank Meeting

News to Read:
Oracle Corp. agreed to buy Sun Microsystems Inc. for about $7.4 billion in cash, swooping in after the server maker’s talks to be acquired by International Business Machines Corp. failed. Link.

PEPSICO’S SURPRISE BID this morning to buy out the public shareholders of two of its largest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS), puts the heat on Coca-Cola to take a similar action with its largest independent bottler, Coca-Cola Enterprises (CCE). Link.

Tuesday I will be looking at the banks for some money. Either in the form of a rally in the sector, or by profiting in their decline with a stake in (SKF). Oil fell Monday so if there is an opportunity, I might pickup some (XOM) for a quick play on any small rally that stock might put out.

Happy Investing!

Aman, MBA

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