Buzz Bits: Dow, Nasdaq Climb Higher
Your daily Buzz & Banter highlights...
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Earnings Report - MV News
- Qualcomm (QCOM) reported 1Q EPS of $0.43 vs $0.42 cons on revs of $2.02 bln vs $2.07 bln cons.
- Rambus (RMBS) reported 4Q revs of $51.7 mln vs $45.56 mln cons.
- Symantec (SYMC) reports 3Q EPS of $0.26 vs. $0.25 cons on revs of $1.32 bln vs. $1.31 bln cons.
- eBay (EBAY) reported EPS of $0.31 vs $0.28 cons on revs of $1.72 bln vs $1.67 bln cons.
- Novellus (NVLS) reports 4Q EPS of $0.63 vs. $0.56 on revs of $438.5 mln vs. $436.1 mln cons.
- Netflix (NFLX) reports 4Q EPS of $0.24 vs. $0.17 cons on revs of $277.2 in line with cons. NFLX reports F '06 ending subs of 6.3 mln vs. 635 mln cons.
Buzz it out, Beech! - Todd Harrison - 3:34 PM
- The "missing wardrobe" complex is finally starting to come together. I suppose it started when Macke was communting from Mill Valley to NYC last year (and used Chez Harrison as his own personal crash pad). Heck, if only my jeans were a few sizes larger, he might have been "Toddo-ized" from head to toe today!
- Wait, what the heck does that have to do with the market? Nothing, it has to do with friendship, humor and our trademark snark. While there's alotta idea generation and thought provocation in the 'Ville, we never wanna lose our sense of humor, Francis. That's who we are and it's how we roll.
- Hoofy had all eyes on him this morning to see if he could embrace the positive tech earnings and run with them. The bovine stepped up and the tape is steppin' out. The action is clearly constructive, with 2:1 positive breadth and jig across a number of leadership sectors (brokers, semis, small caps, nets, homies).
- That's all good--if you're long--but please note that risk is rising--not falling--as vols continue to crash (VXO -4%). T-minus 9.23 until ultimate support.
- I'm diggin' the action in the metal equities today as they--along with crude--shook off the intuitive supply (after yesterday's monster run). With that said, XAU 140 is daddy's nemesis through a pure technical lens.
- I look at it this way. I'm long SunMicro common with a KKR put.
- Hey, you know those Minyanville end-of-day News & Views recaps you get? There's a "Recruit a Minyan" tab on there. Send us a friend, we'll give you a month. It's the least we can do as, without you, we're not us.
- Fare ye well into the bell and have a mindful night.
Position in metals, energy, financials, SUNW
Follow the Yellow Brick Road - Lance Lewis - 2:34 PM
I've been scratching my head and wondering why the gold shares have lagged the metal by so much over the last month or so, especially given that the cost environment has so vastly improved for the miners as a result of the fall in the price of oil. It struck me yesterday that this could be in part because Goldilocks believers have been shorting the shares.
After all, if a Goldilocks believer looked back at 1996 as his template, he found that the gold shares collapsed as the rest of the stock market melted up over the next 5 years. With so many believing that 1996's "Goldilocks" scenario is repeating once again and that commodity inflation has already peaked (even though a monkey could look at the equal-weighted CRB and see that it hasn't), it makes sense that some of these Goldilockers have probably put on big bear bets in the gold shares.
A quick glance at the GDX Gold Share ETF's short interest shows that the short interest exploded to almost 20% of the outstanding at the time back in 4Q as Goldilockers did in fact lay their 1996 bet (the outstanding has since risen to nearly 12 mln shares in January as investor demand for the ETF has increased dramatically of late).
Thus, we could be in for a serious upside explosion in the coming days as these Goldilocks shorts are forced to cover if gold continues to rally like I expect because this isn't Goldilocks...
Position in gold shares
Accumulating Longs in Valeant - Jess Thompson - 2:08 PM
My firm has been accumulating a long position in Valent (VRX). Here's our current read of the higher timeframe order flow...
See the chart here. VRX has been in a primary downtrend since it broke down in 2Q of 2005 (at A). Rallies back into strategic sell zones at X, Y & Z were offset by supply.
At B, a surprise swing up indicating institutional buy-side order flow was coming back into the stock. This rally was significant enough to reverse quarterly equilibrium from declining to rising. I view the current decline (at C) as a test of rising quarterly equilibrium offering strategic potential on the long side.
My firm considers our buy signal as remaining intact, unless a daily high holds below 16.95 and extends lower or 16.17 is touched.
Definition: Quarterly equilibrium is a proprietary calculation, but it's essentially a consensus price level that is either rising or declining. When quarterly equilibrium is in decline, rallies above it tend to be overpriced and fail; when equlibrium is rising, reactions below it tend to be undervalued and reverse back up.
My firm has a tutorial explaning our Strategic Model here.
Position in VRX
Golden Triangle - Laurie McGuirk - 12:39 PM
Just a quick update on gold as I stay busy here down under with the last remaining regulatory hurdles to get my new gig up and running.
The golden triangle is getting tighter. Check the six month chart. We need a breakout of 651 and we should be off to the races. Massive support at 610-605 as proven in last couple of months.
The physical market is speaking very loudly to those who want to listen. Evidence the Monday afternoon selloff after the London PM fix at 639... The paper players tried to break gold lower with NY close at 632 but the physical market stopped it and now we're where we are with active physical buying around 640... those NY dips after London closes are money for old boots on most occasions.
As for gold equities, I see Newmont (NEM) and Goldcorp (GG) as the best of the big guys going forward and always happy to sell Barrick (ABX) vs. NEM... Biggest hedger versus the biggest non-hedger argument.
The silver/gold ratio at 50-1 is still a favorite of mine with expectations we break down to 40-35 by years end and end up nearer 15-1 in a few more years. There just isn't any silver stockpiles, supply is inelastic, demand higher and comex has 10x claims outstanding versus metal to deliver. Same old story.
Position in gold, silver
Heading to NYC to do Fast Money Thursday with Dylan, Macke, Herb G. , Eric & Adam - Jon Doctor J Najarian - 8:45 AM
Yahoo (YHOO) Profits Plunge, Shares Recover – The reaction to YHOO's quarterly report was schizophrenic, as it rallied, sank and then staged a wondrous recovery. The company's long-anticipated search ad technology (Panama) will finally arrive next month, and that is way ahead of estimates. Panama is supposed to make YHOO more comparable to Google's AdWord System.
United (UAUA) Loss Blamed on Storms – UAUA reported a $61 million loss during 4Q due primarily to three major snowstorms that disrupted operations at its hubs in Denver and Chicago. The storms forced UAUA to cancel nearly 4,000 flights in December.
Advanced Micro Devices' (AMD) Loss Surprises - AMD's chip price war with Intel (INTC) took a huge toll on its quarterly profits, even more than analyst's expected following AMD's warning. Shares are down 5% in the pre-market after the conference call.
Sun Microsystems (SUNW) Returns To Profitability – SUNW's net was $126 million versus a loss of $223 million in the same period last year on revenue of $3.6 billion. KKR must have liked what it saw as the firm bought $700 million of convertible notes, putting a seal of approval on the turnaround.
Positions in SUNW, YHOO
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