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Buzz Bits: Dow Moves Up, Nasdaq Closes Down

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



Earnings Report - MV News

  • Amazon (AMZN) reports 3Q EPS of $0.05 vs. $0.03 cons on revs of $2.31 bln vs. $2.25 bln cons.
  • Flextronics (FLEX) reports 2Q EPS in-line of $0.20 on revs of $4.70 bln vs. $4.79 bln cons.
  • Centex (CTX) reported 2Q EPS of $0.70 vs $0.71 cons on revs of $3.32 bln vs $3.33 bln cons.
  • Seagate Technology (STX) reports 1Q EPS of $0.23 vs. $0.18 cons on revs of $2.80 bln vs. $2.73 bln cons.
  • Corning (GLW) reported 3Q EPS of $0.28 vs $0.25 cons on revs of $1.28 bln vs $1.30 bln cons.
  • Aflac (AFL) reports 3Q EPS in-line of $0.72 on revs of $3.67 bln vs. $3.65 bln cons.



Buzz in the Afternoon - Todd Harrison - 3:12 PM
  • I don't know about you but I, for one, could use some seriously smart smiles with these flickering, bickering ticks.

  • More motion than movement today, save the 3% giggle in the drillers. The answer I Really Wanted to Know remains to be seen but if every journey starts with a single step....

  • The mainstay stochastics I watch have been twisting on the top of my page since the summer. I haven't seen pretzels like that since 2003 and no, they didn't make me thirsty.

  • They did, however, last much longer than I ever thought they could. That's why they're tools, not Gospel. (OK, that's more blues, but it's a great vibe!).

  • Hurry up and wait? Yep, sure feels like that into the FOMC. The rub, of course, is that everyone sorta knows what they'll say (rates unchanged, risk of inflation). If I were on the FOMC, of course, I would issue a statement that looks something like this:

    "We're leaving rates unchanged because we're sorta stuck here. We're gonna stick with the bent that "risk of inflation" remains because we need to appease foreign holders of dollar denominated instruments. If and when the demand pendulum swings too far to the left--or adjustable rate mortgatges start to reset--we'll declare victory and cut rates, which we hope against hope will stave off the unavoidable reality of slowing global growth. In the meantime, please continue to gobble up zero percent financing until our terms in office are over."

    R.P.



To quote from the movie, 'The Replacements'.... - Bennet Sedacca - 12:59 PM

'Coach, you know this just don't look natural.' Aside from being one of my favorite movies of all time, I keep hearing this from folks as it relates to the market. What I mean is that the market seems to have this underlying 'unnatural' bid.

I admit that it seems to be that perception and reality are drifting further apart, that usually happens at turning points.

When the smartest people I know question what 20 to 30 years of experience have taught them, and that they are trading small because 'you can't make sense from nonsense,' I sit up and take notice. The path of least resistance 'should be' down. Whether it goes lower is anyone's guess.

Again, not anything close to calling for a market top, just that the risks, as Succo and others have mentioned, are high. Of course, they can stay higher than anyone knows or believes. Indefinitely? No. For a while, yep.


Crazy, Too - Kevin Depew - 11:23 AM

What will it take to suggest deterioration is taking place inside the market? Good question. Let's revisit the S&P 500 percent of stocks above their 50-day moving average indicator. Last week we posted this indicator (from StockCharts.com) and noted that it often peaks ahead of the SPX and that important peaks have registered at 80% and above.

Right now it is at 82.4%. In order to confirm deterioration, however, we need to see it reverse down on the chart. The fact that it is in Xs means that, literally, demand is in control. As long as it is in Xs it could, theoretically, go all the way to 100%.

See the current chart here. A reversal down from current levels would occur at 78%.


The Great Vol Crush... - John Succo - 9:25 AM

Just in time for the elections, forces are gobbling up stocks and hating oil.

Option selling is rampant as stock prices grind, leap, and grind higher and higher. This causes realized volatility to shrink. As volatility shrinks, by definition VAR used by hedge fund managers, broker dealers, pension funds, insurance companies, etc. goes down. When VAR goes down, managers feel compelled to increase risk for return. By increasing risk they force asset prices higher and volatility lower. And around and around we go...

That is until volatility quickly picks up, the only reason being perhaps that people are taking too much risk.

All this while we see real risks rising. Unlike 99.9% of analysts out there, my firm sees housing as the key to consumption. Even if housing prices don't decline much from here, consumers can't extract more money for equity and will depend then solely on income for spending. If housing prices decline, the fragile state of markets will become clear.

I sound like a broken record, but I can only tell you what I think. Countrywide Financial (CFC) just reported a very lousy quarter and my firm thinks that portends things to come.

This does not mean short stocks for there are large buyers out there. There are huge inflows from foreign sources going into stocks. But don't think these are private investors seeking return for risk. When foreign central banks buy U.S. securities through brokers it is deemed "private" by the tick data. They have a lot of money because they "create" it.

You can't fight that, you can only step aside and reduce risk and let it play out.

Position in CFC


What you need to know... - Jon Doctor J Najarian - 8:18 AM

Skilling Gets 24 Years – Sure a quarter century sounds harsh, but the former Enron CEO got less than 20% of what he could have received for those 39 felony convictions. U.S. District Judge Sim Lake denied Skilling's request for bond and ordered him to home confinement, wearing an ankle monitor.

Netflix (NFLX) Profits Jump 84% - The world's largest DVD rental service brought on subscribers at a better than expected pace, adding 493,000 net subscribers to run their total to just shy of 6 million.

Texas Instruments (TXN) Reported Higher Profits, Warns – The biggest maker of cell phone chips said revenue will be $0.40 to $0.46 versus a consensus of $0.45. The projected shortfall initially had shares lower by over $1.10, but they've rallied to a loss of $0.35 in the pre-market.

First Non-Family Chairman of Wrigley Send Shares Higher! William D. Perez spent 34 years at SC Johnson, 8 of them as CEO and nearly 2 years as CEO of Nike (NKE) prior to being named CEO of William Wrigley Jr. Company yesterday. Shares surged 14% on the news.

Positions in NFLX

No positions in stocks mentioned.

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