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Buzz Bits

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Jennaaay! - MV News - 4:26 PM

Genentech
(DNA) reported Q4 EPS of $0.34 (in-line) on revs of $1.89 bln vs $1.85 bln cons.

The company expects '06 non-GAAP EPS growth of 35-45%, implying a range of $1.73-1.86 vs $1.81 cons.

Turnaround Letdown - Kevin Depew - 3:45 PM

See Google (GOOG) crossing the threshold into prosperity territory? Meanwhile, Hoofy is taking this opportunity to turn the screws to Boo on the Dow, clawing back from a turnaround Tuesday defecit to back above 11,000.

Meanwhile, on the dark side, did you know that we could potentially have the 5th consecutive day of lighter volume on the NYSE - a very rare occurrance. But given what we've seen the past couple of years, why wouldn't we have five consective days of lighter volume to start this year? In Bizarro world, it just makes sense. These days, nothing surprises me.

Mini-Minyan Mailbag - Todd Harrison - 3:18 PM

"Toddo, Regarding SunMicro (SUNW), if they were doing something with Google, I gotta think they would have announced it by now--I guess they're not ready. Bernstein said same thing yesterday.

The trendline is down around 4.25 and think the hedgies may try to shake this tree hard. Where have you set your stop? Just trying to learn. Minyan Tom
"

MT,

I've got the Texas hedge on--I've been long the calls and bought some additional stock yesterday (on the pullback to $4.50ish). Truth be told, I "feel" better on the common as the only decay will be one of price, not time.

If this was a "pure trade," I would likely set my stop below that trendline from the November lows. As I've elongated my time horizon, my inclination is to give it a bit of room and add on weakness.

For what it's worth, and after the run it had (+23% since November), some digestion is to be expected. I woulda thought it did more "work" in and around $4.50, however, so I'm watching this close carefully.

R.P.

position in sunw

"Everybody get naked!! Whoa... Sorry... I, uh, misread the
vibe a little" -Anchorman - Jeff Macke - 2:13 PM

To be honest, Prof. Bennet, and with all due respect to his Oracle of Omahness (bowing respectfully), I think Google (GOOG) has rather better growth prospects than Berkshire Hathaway (BRK) over, say, the next five years.

You don't have to drink the Kool-Aid to see the trade. I'm long Google for two reasons: 1. I like the chart 2. My wife made me buy it.

As an only-slightly-sheepish GOOG long, it's worth throwing it out there that Google resembling a bubble-era stock is something of a long-side selling point. It very much *is* a bubble stock. Indeed, in the mind of most investors it is THE bubble stock of today. Meaning, if they want to take part in a little 90's-style reckless speculation, they only have one stock to buy and that stock is Google.

To double-dip my Anchorman quote: "When in Rome..."

Position in GOOG

There is no Internet?? - Greg Collins - 2:08 PM

In the Internet HOLDRs (HHH) we're seeing a customer buying 4,000 Jan 70 straddles as the group tests resistance in the 70 area. The group may need to consolidate before a push thru this final congestion overhead. A breakout however would complete a move from a nice cup and handle formation both on the daily and weekly charts. Pepe noted the pattern recently in the course of the move.

Keep in mind the two largest components, EBAY and Yahoo! (YHOO), report earnings on Jan 19 and Jan 17 respectively. Amazon.com (AMZN) reports in Feb (after expiration). Google (GOOG), not in index but obviously a sentiment gauge, reports in Feb as well.

Mini-Minyan Mailbag - John Succo - 1:36 PM

Prof. Succo -

I've tried to wrap my head around our credit/debt situation but I'm having a hard time figuring this one out. If M3 is exploding as it is, and consumer credit has now declined two months in a row, how is the money getting from the Fed to the markets? I thought it'd have to get there via borrowing, which would show up on the consumer credit side, but maybe I'm just misunderstanding things.

Minyan Conor

MC -

ANY financial intermediary could be borrowing the money and spending it: Broker dealers, commercial banks, and anyone THEY directly lend to (hedge funds, mutual funds, pensions, etc). The disparity between the consumer side and the larger monetary aggregates is nothing more than the monetary equivalent of what we have been seeing since 2004: there is no "need" or desire on the part of actual businesses for lots of credit/liquidity so the money the Fed injects into the system has made itself into - almost exclusively - the financial system via PAPER asset inflation rather than consumer goods/finished goods inflation (relatively).

In this sense, money injected into the system is having less and less effect as it is not realizing a multiplier effect. One dollar of repo is only producing two dollars of paper asset inflation.

X marks the spot - Kevin Depew - 1:26 PM

Take a look at US Steel (X). The stock is right now well off the earlier lows at 50.11. I wanted to bring this stock up because we looked at it on both a point and figure basis and DeMark basis yesterday here.

The stock chart did complete a TD-Sequential 13 sell signal yesterday, as expected, while the PnF positive context remains unchanged. This is a very instructive example of why I would not recommend anyone rely on one methodology in a vacuum. Context is important, but so is timing.

Flashback! - Bill Meehan - 1:18 PM

This day in market history...

  • Closing levels 4 years ago found
    • DJIA: 10,067.86
    • S&P 500: 1156.55
    • Naz: 2047.24
    • Crude: 20.48
    • Gold: 285.60

This day in Minyanville history...

  • In '05, the HUI was inching closer to levels of Prof. McGuirk's bet as he penned Streaker.

In other news...

  • In 1999, The Sopranos debuted on HBO. They better do something pretty special with the upcoming season to re-create buzz about it after the long hiatus.

It's all right if you love me
It's all right if you don't - Todd Harrison - 12:57 PM

The Minx slinks through the muck as traders wonder what the...heck? The morning (upside) probe edged market internals to flattish as green seeds sprouted in an otherwise red spread. Hoofy used a fair amount of energy to get there which leads us to ask the intuitive question: what now?

While my tells have all the edges of a marble, I would venture to say that the fray will end lower when thy bell tolls. From there it gets a bit tougher as alotta folks will view the (perceived) slinkage as a "one and done" (particularly above S&P 1275 and NDX 1705).

The next leg may very well go to the video tape or earnings, as the case may be. Alotta information is coming down the pipe and, as this year is nary a week old, I'll remind ye faithful that pressing or guessing is no way to start our '06 mojo.

I've got a lunch meld with a potential new prof so lemme hop. I'll be back in two shakes of a cow's tail.

R.P.

Dodge Ball - Tom Peterson - 11:02 AM

Still scratching our heads trying to figure out how Phelps Dodge (PD) messed up so badly in an environment that was all going their way. The company needs to provide more clues; hopefully they will be forthcoming soon.

In our Jan 4th alert (which followed up on our Dec. 23rd piece) when it hit our target near $157, we mentioned the stock should be sold and that it should probably fall away quickly. This plunge today has left some 'ice' resistance around $149 -150, where traders will likely put short-selling pressure on the stock if it attempts to test that area. (See the chart here.) We think sellers will come out of the woodwork especially if too many questions are left unresolved and management comes under fire for mistakes.

Despite being overbought, sticking with pharma... - Bennet Sedacca - 9:34 AM

Todd mentioned in his buzz earlier, he was lightening up on some pharma. As a trader, I do not blame him. PPH, which we have been long from the lows and mentioned many times here, remains the only cheap sector in my book in the S&P, not to mention sterling balance sheets for the companies with the largest weightings, Johnson & Johnson (JNJ) and Pfizer (PFE) (2 of the remaining 6 or so AAA rated companies).

XLV is a similar story, but contains some other richly valued companies that could hold it back, but there too, JNJ and PFE make up nearly 25% of the index.

Aside from being cheap, we think that with all the money sloshing around the world, and with private equity shops loaded with cash, we wouldn't be surprised to see someone like Bristol-Myers Squibb (BMY) gobbled up. Their pipeline looks to improve over the next few years and has a fat dividend that could be used to finance the deal, not to mention a sterling balance sheet. So while a pullback to the 200 day or so is not out of the question, we still feel this is one of the top performers of the year.

Positions in PPH, XLV

So make it one for my Baby
And one more for the Shobin... - Todd Harrison - 9:23 AM

I answered my direct line as I always do, in a hushed, deep voice that murmurs "Minyanville" in such a way that I can duck unneccesary pre-market distractions. But when I heard the voice on the other end of this particular line, I perked up in a hurry. "Heyyy!," I said, "It's Steve Shobin of the Americap Shobin's!"

Steve, an avid reader of the 'Ville, called to offer his humble vibe on the financials. "I think you're right on the BKX," he said, "but it may take a while to kick in." He mentioned the (less than zesty) relative strength in the BKX since the end of '04 and asked us to run some regressions. As I only regress when watching Mel Brooks, Pepe assured me he was up to the task.

I told him that I was surprised that the piggies haven't taken out BKX 106 despite Duke & Duke's run through XBD 200. "They're two different animals," he offered, "like a llama and a dog."

True dat, my friend, while the BKX is top heavy with BankAmerica (BAC), Citigroup (C), JP Morgan (JPM) and Wells Fargo (WFC) (40% of the BKX), the top five weightings in the XBD are Raymond James (RJF) (noice), Ameritrade (AMTD), E*Trade (ET), Legg Mason (LM) and Charlie Schwab (SCHW).

R.P.

position in jpm

Say What? - Kevin Depew - 8:36 AM

A look at commentary, opinion and analysis from around the world:

  • In yesterday's Asia Times, W. Joseph Stroupe speaks freely about the Kremlin and the world energy war.
  • Pimco's Paul McCulley asks, "Is the price right?" He concludes by noting that "PIMCO firmly believes that over the next 1-2 years, the [yield] curve will once again become a curve."
  • Marc Summerlin, President Bush's former deputy director of the National Economic Council, writes today in the Wall Street Journal that "if we could somehow guarantee that the price of oil would never be low again, so many new technologies would develop over time that the price would certainly fall from today's high levels." Well, ya figure if you can put that barrel of oil under your pillow at night, the Guarantee Fairy might come by and leave a quarter, am I right? But how do you know the fairy isn't a crazy glue sniffer?
No positions in stocks mentioned.
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