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Buzz Bits: Dow, Nasdaq Close Ahead

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

No answers... - John Succo - 3:46 PM

I can only say what I think. If you don't want to listen and dismiss me as wrong I don't blame you.

Traders are talking about the Fed's "gunning" the market for elections, some very important elections. I do know that M3 is rising rapidly into this stock rally.

Our economy is now asset based: we borrow to consume and use asset prices as collateral. This perpetuates the need for ever rising asset prices to supplant income (lagging) to continue. This requires ever expansive monetary policy which requires ever more debt to "get that money into the system."

In a perverse way you can look at it as a reason to participate. But risk continues to rise.

I can't tell you when stock prices become too risky...I already thought they were.

Buzz in the Afternoon - Todd Harrison - 3:30 PM

  • "Size to buy" in Q's and SPY at the high. It's like the Dr. Seuss death knell for the bears.

  • Panicky? Maybe--I, like you, am watching S&P 1365 (and I don't think we get through there today).

  • I'm long Weatherford (WFT) calls, as you know, and I'm watching this pup as it tickles the downtrend line from May.

  • Ruby always told me that I have pepper in my arse. I never really understood what that meant but I assume he meant that I'm impatient.

  • Speaking of the man, we'll be hosting the CCA portion of MIM-CCA at Country, which is "top ten" food in NYC, according to Mr. Zagat. Minyans in Manhattan are gonna be hearty and happy as we hand the first "Ruby" to Trent Tucker.

  • T-minus 0.70 until the VXO is a single digit midget.

  • Discipline over conviction.

  • As per my earlier post, I've seen a fair amount of towel tossing from the bear camp today.

  • Further to that, I've seen more buying from underperforming bulls. That's not to say they can't trade higher, but buying because other people are will be tough to stomach when the first dip arrives. Conviction is funny like that.

  • A peaceful place, or so it looks from space....

    R.P.


Position in WFT

1995 vs. 1999 vs. Today - Kevin Depew - 2:12 PM

Had to step out for a bit, but returned to find quite a bit of mail on the 1995 meme Snoop Tone and I kicked around earlier this morning.

Minyan Matt asks, "Was wondering if you've examined patterns in TD (Tom DeMark) indicators during that period (1999) vs. now (or vs. 1995 for that matter). A growing question in my mind is the extent to which trend exhaustion indicators have been predictive of trend changes during periods such as like this (i.e., lifts on narrowing breadth)."

Well that's a great question, Matt. Here is a look at TD-Sequential for the S&P 500 during 1995. That is quite a trend. TD-Sequential efficacy was rather mixed. There were six confirmed sell signals during 1995, no buy signals and three produced notable moves lower while three did not. The eight sell setups illustrated how powerful the trend higher was since by definition a sell setup requires 9 consecutive closes higher than the close four price bars earlier.

Here is a look at the SPX year-to-date. so far there has been only one sell setup and only one sell signal that produced only a modest sideways reaction. Quite a difference in DeMark terms.

Finally, here is a look at the SPX during 1999. There were two sell signals, four sell setups.

Strong like Bull - Ryan Krueger - 1:11 PM

With all the attention and confetti being thrown on the US Large Caps, take a peek at one of the firms many of them hire – Infosys (INFY). Its numbers just reported were sparkling. I have a hard time getting too excited for too long about the cost cutting led moves of many U.S. giants (although great for trades), but finding the firms cutting those costs makes a lotta sense to me.

INFY has been one of my firm's largest core holdings for years and as tempting as it is to let go of some shares right here (perhaps good for a trade, and confirmed by a TD sell) we will not. Having core positions separated from trades helps my firm keep our disciplines entirely separate and tight for each.

At a time when laying off people is required to boost earnings at some of America's finest, Infosys added almost 9000 people last quarter. They hired 2000 people in one day.

Was it just four short months ago that this stock traded at $32 a share? Remember when investors were jumping out of their windows in emerging markets, especially India. I stuck my global neck out at an excruciating time in Emerging, Not Emergency, two days before the bottom in INFY, which felt like two years. This group of stocks is one of the few that we feel absolutely no need to trade as the global equity imbalance cited simply and slowly melts from one country with 50% of the world's equity, and trickles toward the other 110 with stock markets who share the other 50%.

Position in INFY and International Equities

Hold music buzzlets - David Miller - 10:00 AM

  • You could knock me over with a feather if a biotechnology company conference call ever started on time.
  • It is not a coincidence that biotech values lifted around the same time that acquisitions in the public space started increasing.
  • The Anormed (ANMR), Genzyme (GENZ), Millenium (MLNM) dance is pretty entertaining. Remember, this started when Genzyme made a rare hostile bid for Anormed.
  • I've talked to a number of biotech investors who believe this feels like the bottom in 2002. Man, I hope so. The run off the lows in 2002 was a lot of fun.
  • There are about a dozen biotech IPOs sitting in the wings. We'll see how many of them see the light of day.
  • IBB consistently outpacing the BTK lately. This is a good thing.


Trend Alert! - Jason Roney - 8:44 AM

We should be alert for a trend day to play out in the S&P today or tomorrow at the latest. The 5 day range of the S&P 500 of less than 0.8% and the 6 day closing range of less than 0.3% are the smallest of the year.

Over the first 6 months of the year, I continually highlighted the S&P's tendency to open higher and close weaker. It's no surprise the character of the market changed dramatically during the recent advance. Despite the move higher, today will likely mark the first S&P futures open of +1 or more since September 25. And the futures have closed above the open price for 7 consecutive days. I point this out for two reasons: The character of the market has indeed changed and we're unlikely to see any material trend change until this pattern reverses.

What you need to know... - Jon Doctor J Najarian - 8:07 AM

OPEC Says this time for sure! We're tracking crude oil down another $.21 to $57.38 despite these supposed production cuts. Keep in mind that we began 2006 at roughly $64, so we are plumbing new lows for the year right now.

Costco (COST) 4Q Beats Lowered Estimates – COST, the largest warehouse club, said 4Q net income rose 1% to $355.6 million, or 75 cents a share, from $354.7 million, or 73 cents a share, a year earlier. Sales climbed 19% to $19.5 billion. This is $0.02 better than Street estimates.

Yum! (YUM) Also Beats Street – Domestic sales at Pizza Hut, Long John Silver's, Taco Bell & KFC may be good, but sales internationally, particularly in China were FANTASTIC! Those sales helped YUM beat Street estimates by $.08.

SABMiller Sales +9% - In Europe, SAB said that it continued to perform well, with organic lager volume growth of 8%, and they cited soccer's World Cup as the catalyst. In , lager volumes were ahead by almost 1% following strong growth in the prior year, the company said.

Positions in YUM, COST

No positions in stocks mentioned.

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