Buzz on the Street: Mr. Market Walks Into a Bar With QE3, iPhone 5, Mark Zuckerberg, and a Geopolitical Powder Keg
A look back at the happenings on Wall Street this week, as seen by Minyanville's Buzz & Banter.
Keep an Eye on the Russell 2000
The market has been caught in several crosscurrents in recent months. The Russell 2000 has been in the spotlight, first as a laggard, and more recently as an outperformer. Currently it's at 843, and remains a tad lower than its 12 month (March 2012) high of 846.
As the index approaches its March highs, it can face some selling. Technically speaking, a minor low-volume retreat bodes well for base building. But the real news in play is its proximity to its all-time highs (high on Russell 2000 is 865, achieved in April 2011). The longer and stronger the base, the greater is the chance of a breakout.
This is the key index on my radar, as its action may determine the eventual trajectory of the entire market.
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Facebook (FB) is getting some follow-through, but it needs to hold. A close above 19.30, and even 19.26 sets up a run to the 8/15 gap at 21.17. Downside risk is the naked VPOC of 9/4 at 17.72 (see chart).
Bears had a chance yesterday when it looked like a head and shoulder was forming on the hourly, but bulls fought back and negated it. This has got to be the most hated stock in the world right now, trading as if it had the future of a Research In Motion (RIMM), which is absurd. The line in the sand is 18.45 in terms of absolute must hold for bulls.
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Cheniere Energy (LNG) is making another challenge of its higher-low neckline, +4.77%. See our initial trade recommendation yesterday here.
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Wednesday, September 12, 2012
Running to Stand Still...
As the world readies to exhale (as Apple (AAPL) paints the tape, I've had second thoughts about my entry level in Facebook (FB). It's not really my style to buy a stock up 6% (on what may not be real news) and my inclination is to unwind this risk so I can hit tomorrow with a clean book and a fresh head.
The stock is up slightly vs. where I slapped this on but for purposes of this column, we'll call it a push.
I want to get back to hitting to quit it (quick trades) vs. holding stocks for extended periods. That is the style that propelled my YTD performance and while it's slipped of late, it's the style I plan to employ into year-end.
Two-sided, very tight and patient. Yeah, that's the ticket.
As always, I hope this finds you well.
The Zuck Hits It Out of the Park Yesterday
The Zuck hits it out of the part yesterday (in the TechCrunch interview). For those that haven't seen this I would encourage a quick viewing.
I have summed up my Facebook (FB) thoughts well of late and a couple times, I also expressed that I was taking the stock into my top 5 holdings. So, I'm going to post a rerun of commentary a few days back as I think it captures the "why of the move today" and what will happen in the business and the stock going forward.
I'll just add that to me the most "provocative" statement from "the Zuck" was "search". I'm sure that many are now going to get carried away and start talking about the demise of Google (GOOG) search if FB enters the fray. I'll save my criticism of that statement for the future. But I would go so far to say that I think the only company that could be a strong number two to GOOG and merge it into a compelling business from a growth and gross margin standpoint is FB.
I think the stock is likely headed to the $24.50 area before meeting substantial resistance and I still stand by my $45 target for now.
iPhone 5 is Here!
Okay, so Apple (AAPL) has announced the iPhone 5, and it's pretty much in-line with expectations.
Here's a quick wrap-up with the major specs and talking poitns.
-4" high-res screen
-4G/LTE data access
-18% thinner, 20% lighter
-8 megapixel camera with new enhancements like panorama mode
-New connector called 'Lightning' (yes, exciting)
-Full-screen Safari mode
Overall, not many surprises here, or at least nothing that's a reason for the stock to go up right now.
The spec-obsessed tech blogosphere doesn't have much to get excited about, but I suspect this phone will be a big hit.
Remember, the general public is concerned with just a few things - design, ease-of-use, and how the phone works with all their other stuff. Apple checked all the boxes here, though it would have been nice to have an attention grabbing new feature like Siri last year or the Retina display the year before that.
Now if by some chance Apple also announces an iPad Mini at this event (very unlikely in my view), I'll be looking to buy more Apple even though it's by far and away my biggest position already.
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