Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, CEO of ChangeWave Capital Partners; Scott Bleier, Fox Business News contributor; and Bill Fleckenstein, president of Fleckenstein Capital.
Trading Pit
In like a lion and out like a lamb. That's what they say about the month of March. But there were no lions or lambs on Wall Street, just bulls! Last month, the Dow gained 3% and the Nasdaq was up 6.5%.
But Bill said be careful because expectations have gotten bigger than what companies can deliver. He thinks earnings season will produce down days for the market.
Tobin doesn't agree with Bill. He said that the economy is expanding and stocks should head higher because many companies are starting to "click" with their earnings.
Gary B. always thinks that the market trades on momentum, and to demonstrate this he charted the percentage of stocks in the NYSE that are above their 40 day moving average. He showed that the market has been exhausted each time the percentage has gone over 75%. But right now it's in a neutral zone and could go up or down.
Scott warned that during earnings season the market is very choppy, and investors should be careful because it's entering the season at the top of its trading range.
Pat agreed with Toby that the economy is expanding, but he thinks that it will expand much more slowly than most people expect because the demand for products is not high.
Stock X-Change
Tobin, Scott, and Bill each picked an April Fool's Stock, one that you should sell now!
Scott started things off with his choice of AOL-Time Warner (AOL). He thinks the company is a mess and the stock is worth $15. (AOL-Time Warner closed on Thursday at $23.65.) Both Toby and Bill also do not like the stock.
Bill selected IBM (IBM) as his April Fool's stock because of the company's stunted growth. Toby agreed with Bill, but Scott said he wouldn't short the stock because of all the institutional investors that find value in the stock.
Toby picked Qualcomm (QCOM). He is short the stock because it is trading at 30 times earnings and has no growth story. Scott and Bill both agreed with Toby.
Chartman
It was time for to settle Gary B. and Pat's March Madness bet. Two weeks ago, in the spirit of the NCAA college basketball tournament, each picked a March Madness stock. In this trader's only segment, both selected the one stock he thought would run up the most in two short weeks. And when it came time to declare the winner, Pat's Caremark Rx (CMX) beat out the Chartman's Accenture (ACN). (Caremark was up almost 2%, while Accenture fell just shy of 8%.) But how do these two stocks look for the long term?
Pat still likes Caremark Rx because their mail order business is very profitable. He thinks the stock will go up $25. The Chartman thought the stock was a little extended before, but now he's totally bullish on the stock because it has held up after breaking above $18.
The Chartman then revisited his pick of Accenture. He's now mixed on the stock because it fell down after breaking up over $30. But, he would buy Accenture if it broke above a resistance at $28. Pat still doesn't like the stock due to big insider selling. He thinks the stock is not a buy until it falls to the low $20s.
Predictions
Tobin: EMC (EMC) a "short" play; heads lower from here
Bill: Stocks and economy stall; Greenspan to blame!
Gary B: Philip Morris (MO) on fire; up 60% next 3 years
Pat: River runs deep; Waters Corp (WAT) is a buy!
Scott: Andersen's fall is MPS Group's (MPS) gain
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