Market Outlook - Week of April 27th

The Swain Flu is scaring everyone to death. Everyone major news outlet has this on and many people I see are terrified of it. The question is how bad can it get? There are trades on this, I played the bird flu in 2006 and it worked, so look at a few posted below for some ideas. The worse it gets (and lingers) the higher the stocks normally go. It’s really crazy actually, sometimes I have seen stocks at $0.40 go to $2. However, I will say Biotech is a very, very risky game, so know when you put the chips on the table, the stocks jiggle either way, in a hard fashion.

As for my strategy, I will sit on cash and see how the market goes. We could tank of this news because the market is manic like that. I see myself going back to my old strategy of rich balance sheets. I miss my old favorites, like NTGR at $10, FLR at $32, LOGI at $8, FWLT at $14, WFR at $13, UNH at $17. However, there are still firms will “class A” balance sheets in this environment but tougher to find because the great value isn’t there, due to the huge run up. I think technology will remain the hot area, regardless of the big move. GLW looks interesting here and the charts look good as well. For chips, I like TSM. I mean if you want to all crazy, AAPL at $126, still has $28 of net cash per share in the stock price, which represents like 25% of the stock price. You can’t find that anywhere these days, most of the big tech firms have 10% or less. Plus from a multiple perspective, it’s kind of low. I know big money is starting to short AAPL here but I wouldn’t. Frankly, below $100, I am a buyer. If you are interested in Healthcare, HUM still has a lot of cash of their books.

Regardless, I will sit on a huge cash position (around 50%) so if we pullback, I will cost average in on some good names. I think that is the best strategy and should create good profits in the near future. As for May, I believe it will be ugly, but I could be wrong. Right now my biggest position is the SDS and GIGM is right behind it.

Below is a list of earnings, good luck this week.

Monday:
Baidu BIDU, Corning GLW , QUALCOMM Inc. QCOM, Valero Energy Corp. VLO , Verizon VZ

Tuesday:
Buffalo Wild Wings, Inc. BWLD , E*TRADE Financial Corp. ETFC , Hercules Offshore HERO , Honda Motor Co. Ltd. HMC , Jacobs Engineering Group Inc. JEC , Level 3 Communications LVLT, Office Depot Inc. ODP , Panera Bread PNRA , Pfizer PFE , RF Micro Devices, Inc. RFMD , Under Armour, Inc UA United States Steel Corp. X, VF Corporation VFC

Wednesday:
Aflac Incorporated AFL , Agnico-Eagle Mines Limited AEM , Akamai Technologies Inc. AKAM , Baker Hughes Incorporated BHI , Barrick Gold ABX , First Solar, Inc. FSLR , Genco Shipping & Trading Limited GNK, Hess Corporation HES, JDSU JDSU, NutriSystem NTRI, Starbucks SBUX Visa Inc. V

Thursday:
Apache Corporation APA , Celgene Corp. CELG , Cummins Inc. CMI , ExxonMobil Corporation XOM, Hartford Financial Services HIG, Kimco Realty Corporation KIM , Monster Worldwide MWW Motorola Inc. MOT, Patriot Coal Corporation PCX , Procter & Gamble Company PG

Friday:
Chevron CVX , MasterCard Incorporated MA