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Buzz Bits: Dow and Nasdaq End Lower


Your daily Buzz & Banter highlights.

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

Currency Pairs - Mark Bloudek - 2:07 PM

The currency pair that is very interesting is the GBP/JPY. The last time the GBP/JPY traded at 216 was in July 2006. This pair along, with the AUD/JPY, have been carry trade favorites for years because both the Australians and the British never lowered rates significantly.

Additionally, GBP has been exceptionally weak against the Euro recently. This is also something to keep an eye on as these two currencies have tended to have a strong correlation. What message is being sent from this action?

If I was put on the spot, I would venture that the London housing price bubble, which is starting to leak, is the root of the underperformance of the GBP versus the Euro. But I could be wrong.

Watch That Triangle - Bennet Sedacca - 12:11 PM

I mentioned the triangle forming in the SPX the other day, and here we are right at the up trend line. Since we are hourly oversold, I suppose it can hold.

Click to enlarge

I keep reading where stocks are the cheapest in 35 years compared to Treasuries. But here is the deal. I still think the E in P/E is too high (imagine higher credit costs and a slowing economy are a recipe for lower margins). Secondly I heard today that the 'credit market will be in a bear market and stocks will run.' That goes into the 'you have to be kidding me' jar.

Next up. I got a similar sell signal on the RUT on Monday's close as I did on the NDX in March 2000--sorry I can't share the signal.

I just saw NCC preferreds trade at 10%. Wowza.

Sticking to GSE's here, even as my preferreds correct a bit.

As for credit. When will it be time to take risk? When we don't need daily bailouts... when the market is self-sustaining and considering how the market is reacting to unlimited liquidity and the economy is following suit, I am staying away from credit..for now.

Position in GSE preferrred shares

Happy New Year... I Suppose - Fil Zucchi - 11:37 AM

Different year same story Minyans as stocks are getting clobbered. On my radar this morning:

  • Trimble Navigation (TRMB) is below $30 and I pulled the trigger on a small position. More bids are in using a wide scale commensurate with the markets volatility.

  • Speaking of which, I am using the rise in that volatility to sell some against my bear-market- size existing index puts.

  • Gold up $22 and oil at $98.50. Don't pull a Fil and try to catch the top. I am protecting my profits with puts and let these two monsters run.

  • With Akamai (AKAM) under $34 I am reloading the trading inventory.

  • If I were leaning too short or I wanted to pay homage to Snapper, near month call spreads on broad indexes is probably what I would look at first.

  • The Euro/Yen cross continues to do a phenomenal job of showing the world's appetite for risk for US equities.

Positions in TRMB, AKAM, SPX, gold, euro

Same Market, Different Year - Quint Tatro - 10:32 AM

Happy New Year Minyans. Well it's the same market, different year and we're out of the gate and stuck in the mud. The major averages are off and breadth is poor. We can't seem to find any footing so the path of least resistance at the present time is down.

Not much has changed for me from last week as I am simply trying to strike a healthy balance between my positioning and market view. I am seeing some diversity under the surface with relative strength in select names that I am trading such as China Medical (CMED), Verigy (VRGY) and Peabody Energy (BTU) despite the broad sell off.

To offset my longs I am picking up some weakening shorts and this morning added to Cbrl Group (CBRL) on the move below recent lows and started some Analog Devices (ADI) on the trend line break of support.

At this point it is tough to gain a broad feel either way so I am just picking stocks and remaining flexible.

Positions in CMED, VRGY, BTU, CBRL, ADI

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No positions in stocks mentioned.

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