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Buzz Bits: Dow, Nasdaq Climb


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Editor's Note: This is a small sample of the content available on the Buzz and Banter.

Earnings Report - MV News

  • Murphy Oil (MUR) sees 4Q EPS of $0.40-$0.45 vs. $0.63 cons. Prior guidance for the quarter was $0.40-$0.60. Production during the quarter is estimated to average 92K BOE per day.

What happened to a 5% correction? - Jason Goepfert - 2:54 PM

A few weeks ago, I mentioned the tendency for the Nasdaq 100 (NDX) to suffer at least a 5% correction within a 10-day window in January. This has been quite consistent, having occurred in 17 out of the past 20 years.

We started the year with an extreme intraday move lower, which I thought was odd since the index hasn't topped out until the 8th trading day or so on average. Even with the index moving to new highs now, I'm not yet convinced that it's going to scoot through this year without some kind of violent shakeout.

Just as an aside, there have been 10 years where the index closed the first week of trading with a gain of 2% or more, as it did this year. A month later, it was positive only two times, those being 1987 (after which it didn't suffer a meaningful correction until April) and 1997 (after which it began a slide in February).

Seasonality and historical biases can only take us so far, and over the past six months they haven't worked as consistently as in the past. But given the current state of the sentiment figures I follow, and waning longer-term momentum, I'd be surprised (!) if we didn't get more of a scare this month.

Under the Hood - Kevin Depew - 1:53 PM

  • Just back from a meeting downtown - working hard on some behind-the-scenes content directives for 2007 - and I find new point and figure buy signals outpacing new sell signals by a 19 to 7 margin.
  • Not surprisingly overall buy signals are leading by a whopping 53 to 9.

Demand remains in control of the NYSE and S&P 500, as shown by the bullish percent indicators, but that really doesn't tell the whole story. I like this chart that gives a bit of a better view of what is going on under the hood. It's a line chart of the S&P 500 bullish percent (dashed line) with the S&P 500 index overlaid behind it.

Note how the S&P 500 bullish percent has declined since peaking just before mid December as the S&P 500 price index churns. As we noted yesterday, technical indicators are beginning to flash that suggest the average stock is losing sponsorship. That's also what the bullish percent is saying. Keep in mind that it has not formally reversed down on a point and figure basis (see the point and figure chart here), but it is getting closer - and despite today's action it remains less than 1% away from turning defensive.

Stocks Bounce today, but will the War end in 2011 with a real withdrawal? - Woody Dorsey - 12:17 PM

They say that time heals all wounds and conversely, time wounds all heels. There is causality in life and in markets. Market timing, like the weather, will always be with us. Eventually all markets liquidate and often terminate their selling with a capitulation. Oil is closing in to that sort of psychological profile. It is important to allow sellers enough time and cognitive rationalization to bail out. Equities have begun to correct but have not really begun to correct. Markets take time to turn, psychologically. Yesterday's micro trade with a lower open and a nominal key reversal day suggested some strength today and lasting into a Holiday rally effect into tomorrow.

The administrations'… Surge and Accelerate paradigm might be better termed as a...Last Gasp. Fast forward to several years from now when the costs, (Capital, Political, Psychological and Geopolitical) could become so painful that no one wants to ever hear about Iraq again. Interestingly, the final withdrawal from the Middle East morass may occur at the next major market low in 2011? Wars may not be so much won as simply wear out one side or the other.

Everyone loses a war but that is unlikely to change. No one wants to lose. This tendency is more of a human heuristic known in ancient times as Hamartia. Losing is less a moral issue than it is a primal reaction which we rationalize in any way we can get away with. Political success and politesse deems that persons of elected power should come up with creative and persuasive rationalizations. Political punditry is similar to Market Punditry. They are after all both simply human flaws.

What you need to know... - Jon Doctor J Najarian - 8:12 AM

Cisco (CSCO) Sues Apple (AAPL) Over Trademark – The timeline is something like this; CSCO buys InfoGear in 2000 and gets the trademark iPhone, which uses CSCO's Linksys VOIP to make phone calls over the internet. Now APPL claims since it is using the term to define a cellphone, it has the right to the name! Somebody out there better throw some water on Steve Jobs and wake him up because he must be dreaming!

Crude Falls Again, Russia Reopens Pipeline - U.S. light crude is 17 cents lower at $53.85 a barrel in electronic trading, after breaking through $53 and trading as low as $52.94 overnight. Treasury prices pulled back, with the 10-year note yield up to 4.69 percent from 4.68 percent late Wednesday.

Delta Seeks "White Knight" – In an overt attempt to fend off a hostile bid from US Air (LCC) Delta Air Lines says it has held talks with Northwest Airlines and United Airlines about a possible combination.

UBS Upgrades MetLife (MET) - The broker told clients that with its estimated excess capital of about $4 billion by the end of 2007, MetLife seems well positioned to repurchase more shares than guided so far.

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