Buzz Bits: Dow, Nasdaq Climb Higher
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Bell Buzz - Todd Harrison - 3:51 PM
- One day does not a market make--particularly given the light volume--but today's action should embolden the bulls as they tee up Turnaround Tuesday.
- The most impressive mire nestled in the muck? The financials, for one (the brokers pulled the banks higher) and the emerging markets, fer deux. Broken clocks may be right twice a day but broken charts don't always follow suit.
- What's Boo eying (other than the Marcel Marceau volume)? The homies (again)--they're the worst house in the sector neighborhood.
- Some days you're gonna be the windshield, other days you're gonna be the bug. You're not a bug, are you gnat?
- You don't have to play every day, you just gotta win most of the trades you choose to play. Here's hoping that today was a winnah for you and that you're evening P&L puts it to shame. I'll see YOU in the ayem, Minyans--may peace be with you.
Never Seen That Before! - Jason Roney - 2:34 PM
It's hard to argue that last week's selling was driven by fears of interest rates or slower growth. The most prominent theme seemed to be an unwind of the weak tech / strong Dow trade of 2006.
The cross-current was so prominent that last week produced a pattern on the weekly charts we've never seen before. The SP500 had an outside week with a close below the prior week's low while the Nasdaq-100 had an outside week with close above the prior week's high.
- Since the inception of ND futures, the NDX recorded an outside week with close above the prior week's high just 20 times.
- The only reliable result of this pattern was a higher high the following week (so trade above 1816 in the futures at some point this week).
- The result was a higher high 19 of 20 times with a higher weekly close just 12 of 20 (since the October 2002 low the result was a higher high 9 of 9 but higher close just 5 of 9).
- Just looking back to the 2002 low for the SPX outside close below prior week low pattern found 12 occurrences.
- The next week saw lower low 10 of 12 but lower close just 6 of 12.
Reality Bites - Fil Zucchi - 9:51 AM
I must say that waking up early for a couple of hours of work before hitting the Park City slopes was not a bad gig, which is why it had to end. The good and bad on my screens this morning include.
- Tellabs (TLAB): Bad dog, with a nasty sales/EPS warning which kinda surprised me. Note however the benefit of falling off curbs rather than out of windows. With a cost basis of $10.25, and the stock price consisting of $3+ of net cash, my tendency is to add rather than bolt.
- St.Jude Medical (STJ): Good dog, with decent numbers. The additional "chicken long" position of Dec.6 worked well as a I had covered 2/3 of the short stock by last week. But the conundrum in my head remains as a I still don't see the fundies driving the stock much beyond $40, while the technicals keep getting better.
- The very greenback: Is this the obligatory test of the $1.30 break-out vs. the euro? Does it need to scare people out by spiking below that? If it does not, are the masses going to annoint this as the must-short level? Does that mean that the recent gold carnage is over? And why didn't the yen budge against the dollar last week? Will the calls for higher rates in Japan have the same impact on the financial markets as it happened in May? Have I sufficiently confused you yet?
- Was the energy pounding last week the scare that refreshes? I think so, and I'm sticking with the model that has served me well for the last several months: long lots of different small caps against short Oil Services (OIH) and OIH puts, trading all of them as the prices allow.
Have a great day and an even better week!
Position in OIH, energy stocks, TLAB, gold / gold equities, STJ
What you need to know... - Jon Doctor J Najarian - 8:20 AM
Nasdaq Warns London Stock Exchange (LSE) – I bet the London Stock Exchange is shaking in their Ferragamo's after the NDAQ warned their shareholders share could "fall substantially if (Nasdaq's bid) is rejected. The LSE projects its profits will jump 58% this year and says the NDAQ's bid is light.
Radio Shack (RSH) Raises 4Q Guidance – The new guidance is about $2 million ahead of Street estimates of $49.5 million, but the projected drop in same-store sales could hurt. The profit rise should be improved by margin and inventory management.
Lehman downgrades Insurers - LEH cuts both Allstate (ALL) and Torchmark (TMK), so look for some institutional selling in the sector.
Goldman Upgrades Porsche (POR3.F) – The investment bank takes Porsche AG to buy from sell, saying it sees positives on earnings and cash flow at Volkswagen, where Porsche has a 27.4% stake. "We believe that Volkswagen's earnings potential is being overlooked, and expect Porsche's shares to benefit from further share price appreciation at Volkswagen."
Positions in RSH
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