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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Intraday Market Notes: Lather, Rinse, Repeat -- January 8 2 comments
    Jan 8, 2013 4:20 PM | about stocks: PJP

    4:00 pm ET: Today's market action can be summed up by "lather, rinse, repeat" with today being a near-repeat of yesterday. The VIX appears to be closing the day with a test of yesterday's low of 13.71. Every time this has happened (since VIX recalibration in 2007), the VIX has popped back up meaning we could see another repeat of today's action tomorrow. Obviously, this cycle is not going to go on for much longer. The market has moved up partly because of beginning of the year portfolio rebalancing and partly because the fiscal cliff was avoided, but both of these effects are waning.

    So, is there any fuel left to push the market higher? Yes, and that is the upcoming earnings season which officially kicks off today. We've noted here that the valuation on the S&P 500 is getting rather heady with the P/E ratio now standing at 17. This is 13% over its historical average of 15. The only way for the market to sustain this valuation is for a rise in earnings, making this reporting season especially critical. Long-term investors in particular should keep a close eye on it and if earnings are proving to be less than stellar, then buying portfolio protection would be a prudent move.

    Other than continued strength seen in biotech and big pharma (pharma etf PJP continues to advance to new highs), there's not much else of major interest on the equity front. That's it for today!

    Note to Subscribers: There is one new Stock Darling and one new Stock of the Day.

    Themes: market valuation Stocks: PJP
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  • sundate36
    , contributor
    Comments (290) | Send Message
     
    Dr. K. - have you looked at $BEBE recently? Quite a few insider purchases but very downbeat forecast on upcoming earnings. It seems that the stock is really bottoming here...
    8 Jan 2013, 05:20 PM Reply Like
  • Dr. Kris
    , contributor
    Comments (327) | Send Message
     
    Author’s reply » The stock could be bottoming...or just pausing before another leg down. The company's been closing stores left & right, at least here in LA. The move could streamline costs but will likely not help gross revenues.

     

    Bebe could go the way of the Morgan stores. Similar product line targeting the same demographic. They began closing stores years ago and now do not exist in this country. (Morgan is European-based and I don't know the name of the parent company.)

     

    If you want to start accumulating $BEBE, I'd recommend starting with a small position. Personally, I'd wait until it cleared $4.25 resistance before dipping my toe in and also waiting for the next earnings report & guidance scheduled for Jan. 31 after the bell.

     

    I'd hate to see this company go out of business--half of my closet is from that store. I'm making daily offerings to the god of retail to prevent that.

     

    Dr. K
    9 Jan 2013, 01:20 PM Reply Like
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