Buzz Bits: XOM Profits Sky
By Jonathan L Schwartz Jan 30, 2006 5:43 pm
Can't Win 'em All
Earnings Report - MV News - 4:24 PM
RCC comparo... - David Miller - 3:49 PM
One of the biggest biotech stories of 2006 will be how well Onyx (ONXX) and Bayer (BAY) can sell Nexavar against Pfizer's (PFE) Sutent in renal cell carcinoma (RCC, or kidney cancer). Now that Sutent has been approved -- on two non-randomized Phase II trials, believe it or not -- investors can do some real comparing.
Those who have been playing Onyx short because of Sutent should print out the drug labels (click on the drug names above) and compare the side effect profiles. Everyone knows Sutent showed a response rate advantage in non-randomized Phase II trials, but the efficacy side is only one part of that all important therapeutic index equation that governs which drugs are used in which populations.
Mini-Minyan Mailbag - Kevin Depew - 3:10 PM
"The 30 Year U.S. Treasury Bond Futures Contract weekly chart has a Head and Shoulders topping formation which will be confirmed on a close below the neckline at 110'08. The measured move target for the formation is 101'05. The chart of the 30 Year Bond Yields has an Inverse Head and Shoulders pattern which projects to 5.607 on a close above 4.879.
Minyan RK, CMT"
See the chart of the 30-year Treasury yield here.
On shorter time frames the 30-year yield has at least a minimum count to 5.17-5.18%. The 5% level certainly has some attractors, and a completion of those PnF projections would also break a spread triple top, enhancing the possibilities of the longer-term levels you cite.
As Bennet has pointed out over the past couple of weeks, the probabilities of a selloff in bonds feeding on itself is high.
Flashback! - Bill Meehan - 2:12 PM
This day in market history...
Closing levels 4 years ago today
S&P 500: 1113.57
This day in Minyanville history...
Prof. Reamer answered questions about Fibonacci & Phi
In other news...
In 1969, The Beatles made their last ever public appearance as a group in a performance of Get Back filmed for the movie Let it Be.
Margin Debt - Jason Goepfert - 1:37 PM
In Barron's this weekend, there was once again a mention about margin debt, and how it was as high lately as the bubble days - a sure sign of impending doom for equities, of course. I have railed against this distorted stat that the bears trot out every once in a while several times over the past couple of years, and it's time to bring it up again.
There is no denying the facts - the only time other than last month that margin debt totaled more than $220b at NYSE-designated firms was during the height of the mania in 2000.
But (and this is a HUGE but), no mention was made of the offsetting cash sitting in those accounts. At the height of the bubble, there was an average of $142b in free cash. Last month, there was $208b - a difference of more than $60b.
In other words, during the mania months in 2000, customers had a negative balance sheet that netted out at around -$106b on average. Last month that net was -$13b. There is simply no comparison.
Exhausted yet? - Tom Peterson - 12:56 PM
The Natural Gas Index (XNG) continues to be stronger than the nat gas futures, as expected. But for those interested in the commodity, see the seasonal update here. We have been waiting for a tested low (a.k.a. 'double bottom') to show that downside action has been exhausted. So far the demand shown since the temporary low made last Thursday is pretty good.
Another way to define a low is by the CCI (8) to cross back up past -100 (recall we used the CCI to also snag the last crude oil low in December 2005).
Say What? - Kevin Depew - 12:41 PM
A look at opinion, analysis and commentary from around the world:
When East Hampton real estate broker Diane Saatchi is asked what she owes her success to, she could cite her perseverance or her sales ability. Instead, according to Newsday, "It's Mr. Greenspan," said Saatchi, now a senior vice president with the Corcoran Group.
Adam Hamilton, an analyst at Zeal LLC, in the Asia Times details "The Greenspan Legacy."
No surprise, No suprise - Fil Zucchi - 12:13 PM
After going over the Cypress Semi (CY) conference call transcript very little jumped out at me. The Sunpower (SPWR) spin-off is now front and center with investors, though it seems odd that CY's stock is being given so little credit for the "extreme makeover" of its balance sheet. Yes I know that T.J. Rodgers was adamant that CY's interest in SPWR would not be monetized - at least not anytime soon - but it does not mean that the value is not there.
Operationally CY had a decent quarter, but the next real catalyst will probably not materialize for about six months, when their PSoC based products should ramp en masse. Then we should see a spurt in both revenues and EPS.
Unitl then I am going to sit back, relax, enjoy it, and trade opportunistically around my position.
P.S. There was an oddity on the call: an unusual number of "buy-siders" were asking questions. I don't know if or how many buy-siders have been following CY, but they were never this talkative. Their presence is at least an anecdotal sign of institutional interest in the name.
Position in CY
Google It - Adam Warner - 11:52 AM
Volatility hanging tough today ahead of a news week that sounds straight out of a bad Billy Joel song. "State of the Union, Google Earnings, Employment Numbers, Greenspan Thunders!" Or something like that.
In my humble opinion, you can throw it all out beside the Google (GOOG) reaction as that's the key tell for our mood this week. Volatility remains stratospheric, in the high 60's now in Feb options, and continues to nudge the VXN up with it.
position in GOOG
PnF you too, Bub - Jeff Macke - 11:30 AM
In deference to my massive respect for Prof. Peppy "Striebeck" Depew I pinged him while considering a stock purchase this morning.
"I'm going to get long some Safeway (SWY), Frogman" I said. "I think that Uppity fella had some great thoughts on the name. His note provoked my doing some of my own research over the weekend and I like what I saw! I'm feel a genuine sense of personal affirmation that our community of enlightened financial discourse not only feels good but could be a darn good way to come up with some investing ideas! Whatya think of my Safeway, buddy? Isn't it great to put our labors to the test in real time?!"
"I think a print at 23.50 would change 'Safeway' to 'Gangway'." He replied while wiping an entire forearm worth of gin from his lips, "it's your funeral, dude."
Sounds like someone's gotta case of the Mondays.
Position in SWY
Mini-Minyan Mailbag. - Todd Harrison - 10:18 AM
"Toddo, After assimilating all the data available to me, I think we're near an important inflection point. I believe the DJIA has seen the high for the year and that there's a decent chance the Dow will drop to 10,400 in the next few week. I want to capture this move by shorting DIA with a stop at this year's closing high of 11,043. I plan to use an amount of capital that suits my risk profile. I'd like to initiate this position today as I feel that given the Dow's lofty field position, the Fed's 14th consecutive rate hike will be a sell the news affair. I'd appreciate any fine tuning you can provide to improve the mechanics of my swing, and I won't take it as advice. Thank you, Minyan Dennis.
MD- While I can't offer "specific advice" on a trade (that's not what we do), I'll offer the following observations:
If you're disciplined, you can try anything. It sounds like you are as you've mapped out risk definition.
"Tracking risk" is often the culprit of the "right inclination, wrong execution" syndrome. Make sure your chosen vehicle effectively mimics your thought process.
Be wary of setting your stop at "obvious" levels. With 8000 hedge funds staring at the same charts, the technical landscape is crowded.
And good luck, Mon Frere, and may the Schwartz be with you!
Some quick morning Notes... - Jason Roney - 9:28 AM
GOOG reports earnings on Tuesday. Since coming public, the company has 5 quarters of previously reported earnings. The Nasdaq futures opened higher on the day of GOOG's release every time by an average of nearly +.5% and closed higher 4 of those 5. We'll also note the SP futures have a strong bias to opening higher on the day of the FOMC release.
The last day of January has a positive bias with the SP500 closing higher 70% of the time over the last 30 years by an average +.47%.
Longer-term, the first day of February has only a moderately positive bias (last 30 years just 56% higher first day and 53% higher first three days). Over the last 10 years, however, the SP500 closed higher 8 of 10.
The State of Union address is also this week but we could find no statistical bias to the markets.
Iraq and Fannie Mae. What do they have in common? - Bennet Sedacca - 8:33 AM
According to the weekend version of the Wall Street Journal, Iraq sold a $2.8 billion issue of debt due in 2028 in a deal done by JP Morgan (JPM). The bonds are trading in the 9.25% area despite comments like 'you can't do credit analysis on this bond', according to CreditSights.
Well, on Friday, as John Succo and I ranted, FNM apparently can't report results and the OFHEO, appointed to "ensure the safety and soundness of FNM and FRE, can't determine anything about either because they have too many documents to go through. So whose bonds are worth more if you can't analyze either one (yes, this is slightly tounge in cheek)?
On another note, long GM paper is trading at 11.85% or so, which at least HAS financials you can analyze, albeit lousy results. So Iraq's bonds, that you can't analyze, are trading 260 basis points below GM's. FNM's trade near Treasuires. Go figure.
It does highlight, however, the risk people are willing to take these days with the easy money sloshing around. As we have highlighted before, we find that more of a time to be more cautious as it relates to taking credit risk.
No positions in stocks mentioned.
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