Buzz Bits: Dow and Nasdaq End Higher
Your daily Buzz & Banter highlights.
Midday Randoms - Fil Zucchi - 2:27 PM
- The Fed gave the market 75 bps and the reaction was: I want another 50 or maybe more. Congress agrees to borrow $150 billion so that they can dish it out to people who otherwise would not borrow, and the reaction is: disappointing, we wanted twice as much. Will the Fed and Congress oblige to bigger handouts? You bet, and the seeds for hyper-inflation are being planted. Whether they catch remains to be seen.
- The dollar is not oblivious to this insanity and is getting shelled - which of course waters the seeds of hyperinflation.
- Why are the esteemed politicians spending our money thanking each other profusely? Shouldn't they thank us?
- While equity players were lusting over housing stocks yesterday, credit default swaps for Beazer Homes (BZH) and Standard Pacific (SPF) were going through the roof. BZH's in particular, blew out 500 bps.
- I have not sold any F5 Networks (FFIV) in this ramp, but I have covered almost all my short puts.
- The pops in the iShares Dow Jones Real Estate (IYR) and Capital One Financial (COF) are big enough for me to sell some out of the money calls naked.
Positions in XHB, IYR, FFIV, COF
Reverse Expected in Spot Gold - Michael Paulenoff - 2:13 PM
My near and intermediate-term work is warning me that 3 session climbs from $850 to $911 (so far) in spot gold will turn out to be a trap (bull trap) and part of a near-term topping process just above $900, prior to another bout of corrective weakness that presses prices into the $800-$770 area in the weeks ahead. The upleg pattern off of the August 2007 low at $641.00 to the January 14th high at $914.00 exhibits the look of completion.
In addition, the heretofore reliable 15-18 week cycle (low to low) is now in its eighth week. I expect a price peak in the eighth or ninth week of a 15-week cycle, so this retest of the highs is occurring "on schedule." If my work proves correct, then spot gold prices-- along with its ETF, the streetTRACKS Gold Shares (GLD) --will reverse in the upcoming hours, and press towards a retest of $850 initially. What about the weakening dollar as a catalyst for much higher gold? My work on the euro argues that it is forming a top as well, with a lid at 1.5000.
Click to enlarge
Sick Days - Jeff Macke - 1:51 PM
Hello from my New York City flop house, where I'm bed-ridden with the flu. They (meaning: Mrs. Jeffmacke and the sissy "don't infect us with your whooping cough" police) can keep me from making television but they can't keep me off the Buzz and Banter, Minyans! Here's what I'm watching between wet hacks:
- Business Week has announced that Starbucks (SBUX) has "Jumped the Shark", based on SBUX charging a buck for short coffee in a Seattle trial. Two things: First, "Jump the Shark" jumped the shark at roughly the same time weekly news mags died. Second, Starbucks changing things up a bit is long overdue, what with the stock off more than 50% from the highs. Turnarounds take time; I still like SBUX stock.
- Nintendo (NTDOY) reported profits up nearly 100%, driven by Wii sales. I'm still long Activision (ATVI) but the meat of video game trade is off the bone, at this point.
- A Minyan asks if I have any good retail paired trades. How about "getting long some CostCo (COST) and covering your retail shorts?" That's more of a paired concept, now that I think about it, but it seems late to be looking for shorts in the pole-axed retailers.
Good Morning with Q - Quint Tatro - 10:26 AM
Good morning, Minyans. Yesterday it was all about the financials and this morning we are seeing some slight followthrough there. However, I suspect there are many who caught the move that will flip out of shares to book quick gains and some consolidation will take place.
As long as it remains constructive it is fine and should be viewed as an opportunity when the stocks set up again. Take Bear Stearns (BSC), for example. The stock has run a quick 20 points off its bottom and while it may continue, it definitely needs to digest the move a bit in the form of a light volume drop or a few days of sideways action. Once the recent gain is digested and the short term traders have stepped aside, we can look to re-enter for the next leg up. If, however, the selling picks up and the gains disappear on high volume, well, then it will be back to the bunker for some more quiet time.
I am pleased to see technology play a bit of catch up today and I am watching many in this area to see if the strength can continue. Rather than play the recent big cap winners, I am more focused on the beaten up stocks, such as the two I started yesterday near the close; Texas Instruments (TXN) and Analog Devices (ADI). Both have been under severe distribution and are trying to clear congestion and squeeze higher.
These are not longer term trades, Minyans, as I have no desire to say that this broad move is anything more than a counter trend rally, which it is until it isn't. Regardless of how long we run, I will keep one eye on the exits and a finger very close to the sell button.
Position in BSC, ADI and TXN.
GET THESE INSIGHTS AND MORE IN REAL-TIME. CALL 212-991-9357 FOR A 14-DAY FREE TRIAL TO THE BUZZ & BANTER OR CLICK BELOW.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter