Spring Break

Spring break is next week for the kids in this part of the world. Kind of fitting since this market also needs a break after that monster move that it has had off the March lows.

<--- S&P 500 1 month chart. +23% in under a month.

RIMM tore the cover off the ball with earnings last night. Go Canada.

Semiconductor memory maker and perpetual capital destroyer Micron Technology reported in line last night and had very cheery things to say about the bottoming of its end markets pretty much across the board.

Ever notice how there are way more positive data points on days when the markets are up?

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I don't know but Michael Arrington might. Google to buy Twitter? I've heard good things.

"Why would Google want Twitter? We’ve been arguing for some time that Twitter’s real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn’t even have a horse in the game."

Real time search. Sweet.

Momentum investing explained, sort of

Blogger, VC, cool dude, fellow Canadian and fund manager Howard Lindzon wrote the following brilliant observation at his blog:

"The harder it is to estimate and analyze an uptrend (or downtrend I guess but don’t practice), the better your chances are of success. You fish where the fish are."

He was talking about Twitter specifically and social networking in general but the idea holds true for all types of upward revision ideas. Beat and raise is the sweet spot of momentum investing, especially when top line beats are leading to bigger bottom line beats. Too bad there's not much of it going on in this market.

How's Your Blackberry?

<---That's a 1 year chart for Blackberry maker Reasearch in Motion (RIMM), which reports earnings tonight. Note the very fancy basing action that the stock has been grinding out since the November lows (the stock has been underperforming).

RIMM has had its lunch money stolen by the iPhone and needs to get its act together. If you're a traditional tech investor you probably don't want RIMM to report a great quarter. Tech investors generally look for innovation to get rewarded. Apple has out-innovated RIMM, and Palm is on the way this quarter with something new and maybe better. Other than the touch screen, there's nothing all that new or different about the Blackberry.

I'm looking for a 1 - 3 quarter spurt of margin discipline and a pop in the stock followed by a resumption of the innovation-rules construct - if RIMM can't get back ahead of the pack, the stock is not going to work longer-term.

I like it ahead of tonight's earnings, though.

Early Look

The futures are looking very strong and European and Asian markets are having a banner day. Geithner and his G20 pals have chosen today to say some things about stimulus and financials that are stock market friendly. I personally liked hearing that both Obama and the Chinese Paramount Leader Hu Jintao were not talking about protectionism or replacing the dollar in their first-ever meeting yesterday.

FASB is finally going to vote on easing mark to market, and they're doing it retroactive to last quarter. This is not yet priced in to the financials imo.

March U.S. auto sales surprised to the upside and are going to have the second derivative monkeys jumping up and down. Going from down x% y/y to down (x-1)% y/y does not make for good headlines but is a necessary condition for turning things around.

Oil just flipped back to trading like a proxy for the next 12 months' global ecomony and is up almost 5% premrket as I write this.

My wife asked me last evening if the market had bottomed. I don't remember what we were doing at the time or why she asked but it was an interesting question coming from a person who is the ultimate buy and hold and forget about it type.

Watch what I do, not what I say

If you have been an interested observer you've seen that Goldman Sachs, Wells, BofA and J.P, Morgan have all publicly stated that they would/will repay the TARP funds early and perhaps very soon.

The NY Times is reporting today that four small banks have done it already:

"Signature Bank of New York said on Tuesday that it had repaid $120 million to the Treasury Department. Old National Bancorp of Indiana returned $100 million, Iberiabank of Louisiana paid back $90 million, and Bank of Marin Bancorp of Novato, Calif., repaid $28 million. All of the banks paid 5 percent interest on the money they had received."

I sincerely hope that some members of the mainstream media choose to focus on this. The perception that money was "given" to the banks and that nobody knows where it went is baloney. That it couldn't be traced dollar for dollar to new loans is unfortunate but stuff happens and the banks' balance sheet to a step function for the worse precisely during that period. Now that there are real live banks repaying the money, after having made interest payments on it, is news. The taxpayer made money. It will not with all banks and certainly not with AIG but let's tell the whole story.

I hope you enjoyed it

I didn't.

The first quarter is over. The S&P 500 was down 11% and change, which isn't the end of the world. Good thing too because it felt like the world was going to end right up until early March.

Where from here? Case Shiller data for housing prices was weak again yesterday but not a disaster. Earnings reports for the March quarter begin next week. Assuming there re no new negative macro shocks in this quarter, earnings seasons could go three ways:

• Earnings are worse than expected and stocks go down. Look for new lows ahead
• Earnings are better than expected and stocks rally. Up is good in that case
• Earnings are worse than expected and stocks rally. Do you feel lucky punk? That would be an interesting spot to make some big bets

Has anything of note come out of this G20 meeting yet? I haven't seen it if it has.