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Buzz Bits: Dow Closes Higher, Nasdaq Dips


Your daily Buzz highlights...


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

Earnings Report - MV News

  • Gilead Sciences (GILD) reports 3Q EPS of $0.64 vs. $0.56 con on revs of $748.7 mln vs. $713.6 mln cons.
  • Ryland Group (RYL) reported 3Q EPS of $1.97 vs $1.77 cons on revs of $1.10 bln vs $1.11 bln cons.
  • Capital One (COF) reports 3Q EPS of $1.89 vs. $1.81 cons on revs of $3.06 bln vs. $3.48 bln cons.
  • eBAY (EBAY) reports 3Q EPS of $0.26 vs. $0.24 cons on revs of $1.45 bln vs. $1.43 bln cons.
  • Washington Mutual (WM) reported 3Q EPS of $0.84 vs $0.93 cons.
  • Allstate (ALL) reported 3Q EPS of $1.83 vs $1.71 cons on revs of $8.74 bln vs $7.21 bln cons.
  • Apple (AAPL) reports 4Q EPS of $0.62 vs. $0.51 cons on revs of $4.84 bln vs. $4.67 bln cons.

Bell Buzz - Todd Harrison - 3:57 PM
  • Holy cow! There sure are alotta Dorothy's and Toto's out there! One day, my friends, when we step from the high road onto the yellow brick road.

  • We didn't get the outright reversal it felt like this morning but I'm gonna leave my Goldman puts on with the very same stop.

  • NDX 1675ish is the uptrend line from the August lows. Just so you see it.

  • Please take some Minyanville chocolate chip cookies. I don't have the discipline to keep them in-house!

  • There are three things you can always count on with Jeff Saut. Good vibes, intelligent discourse and mighty fine wine. Minyans, of course, can check this out for themselves!

  • On that note, I'm outie. Have a fantastic night, Minyans, and remember--just be yourself. No matter what happens, they can't take that away from you!


Yahoo, The Wife and Setting Expectations - Jeff Macke - 2:56 PM

Greetings from Saddle River where both Yahoo (YHOO) and Jeffmacke are learning the limitations of "setting the bar low" as a communication standard. Just as certain optimists might have expected Yahoo's Blah performance to be met with cheers this morning, since the company didn't go so far as to concede utter defeat, I expected Mrs. Jeffmacke to react positively when I gave her "another year of marriage to me, Jeffmacke!" for her birthday this morning.

At least Yahoo got a token bounce last night prior to dropping the current 4%; the Missus, slightly more cynical than after-hours dot-com traders, took my stock straight down and has kept it there all day.

In directly related news, were the market truly efficient, shares of Tiffany (TIF) would be slightly higher today rather than down a dime... this birthday miscue is going to cause an appreciable spike in my jewelry-related spending.

Randoms - Fil Zucchi - 2:29 PM
  • When I sold most of my Akamai (AKAM) position it was a question of price and nothing else. With November puts trading at 60 volatilities . . . .I'm baaaccckk!

  • I did not have a whole lot of pharma coming into today, except for an old position in Johnson & Johnson (JNJ). Piecing together Adam's idea (swap out of stock and into cheap calls) and Bennet's profit making instincts (sell pharma), I have sold my deep in the money LEAP's and am going to wait for a pullback to roll them up.

  • Capital One (COF) is at bat tonight. So far we have heard credit concerns coming from every angle (Corus Bank (CORS), JP Morgan (JPM), Downey Financial (DSL)), so COF would be a perfect candidate to follow the script. Caveat: They bombed badly last quarter, so they are likely to use every available accounting assumption to put out a decent number. Caveat No. 2: If they can't pull off a decent quarter, the $10 ramp of late could unwind rather quickly.

  • Is Hoofy bound to experience the same angst recently inflicted on Boo?

Position in COF, DSL, AKAM

That is bullish... I guess. - Kevin Depew - 1:24 PM
  • Scanning for DeMark daily signals in the S&P 500 noticed a few worth commenting on.
  • Goldman Sachs (GS) recorded a DeMark TD-Sequential sell signal on Monday. The price objective on the .5x3 Pnf chart of 198 has not been completed, but we now have a DeMark sell signal and the first level on a PnF basis that could tell us the upside target may not be reached.
  • See the GS chart here, via A move to 182 would now break a double bottom and signal that the 198 target has changed.
  • Meanwhile, Merrill (MER) registered a TD-Sequential sell signal yesterday.
  • On the positive side, take a look at Temple Inland (TIN), which yesterday registered a TD-Sequential buy signal. The downside PnF target is 37.
  • Professor Adam Warner just IM'd me to say he saw a very bullish Hugh Johnson on CNBC.
  • I have yet to respond to that IM.

Dow Tops 12K, Volatility Eases - Jon Doctor J Najarian - 12:36 PM

Index Option Update

As predictably as the sun rising, the DJIA surge over 12,000 was met with brief fanfare and then harsh selling. That selling was short lived, as the DJIA recovered and again overtook the 12K mark. At mid-session I show 10 Dow stocks down and 20 up.

The S&P 500 is trading up 2.69 on the day to 1,366.74. The CBOE's VIX is registering an 11.64, still holding under 12 as the DJIA tops 12K. The SPX has traded 267,184 calls versus 355,719 puts giving it a 1.33 to 1 put to call ratio.

IWM is showing a volatility level of 23.70 and is showing 99,231 calls trading against 265,502 puts giving us a 2.67 to 1 put to call ratio, gaining some nice strength since yesterdays ratio of .91. The small caps are currently up .27 on the day putting it at 76.24.

QQQQ has a volatility level of 18.81 as the Q's traded some 400,026 calls to 537,404 puts for a 1.34 to 1 put to call ratio, gaining some strength since yesterday. The index is currently trading at 41.89 down 0.11 on the day.

Flight Out Of Quality - Adam Warner - 11:46 AM

Minyan Dave makes a good point here. The bulk of this fabled *Big* outperformance this year occured in two stretches. One was mid April to mid June, and the other was mid July to mid August.

But the first stretch was really just a case of Big going down less than Small in the Spring market swoon.

So all this yapping about the Super Dow, and the Rush to Big Cap is really something that only happened in the July-August stretch. And since August 10th, the IWM is up 11.25%, while the SPY is up 7.5%. It is even more stark in October (IWM up 5.5% vs. SPY up 2.2%) as the bobbleheads get more jiggly about it.

But setting all that aside, I will reiterate a point. Instead of cheerleading every incremental high we hit, how about a practical strategy of locking in some gains, while at the same time exposing yourself to more upside (if so desired)? It is very simple, you can simply sell out a stock or index or ETF, and replace it with calls. With stocks at multi-year highs, and volatility near floor levels, it feels like a perfect time for such a concept.

Position in IWM, SPY

An important question for all Minyans and professors! - Bennet Sedacca - 10:10 AM

The Fed has stated that their foremost goal is to contain inflation. And I guess that is their 'mission statement.' But it makes me ponder what I think to be the MOST IMPORTANT question as it relates to the Fed, the yield curve and to Treasuries.

That question I pose to all is "which year-over-year inflation numbers do we use for inflation?" Do we use core (ex food and energy) or overall, which included food and energy.

One of them is hot now (core) while one points towards deflationary trends. See the chart here of year-over-year inflation INCLUDING food and energy. The direction is, ummm, DOWN. Straight down. Heading towards zero. But this includes the cost of the dreaded, volatile food and energy.

I don't know about you, but I ate breakfast before heading to the gas station this morning. Then I had some coffee and turned on my lights and computer systems. And I intend on driving home today, having lunch AND dinner before turning on my lights as it gets dark. Then I will likely turn on the TV and watch the NLCS. All before doing it again tomorrow.

So let me vote first. I vote that we use overall inflation.

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