Buzz Bits: Dow, Nasdaq Close Higher
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Bell Buzz - Todd Harrison - 3:54 PM
There's been alotta motion today--from the Dow Wow to the Banks "thanks" (if they close above BKX 114) to the altogether carnage in anything "stuff." As per my last Buzz, I am firmly in the (Band) Camp that something must give---that, above all, it's not as "neat and clean" as a simple rotation into tech and financials from energy and metals.
With the CRB at session lows (-2%+) and the the broader indices once again tickling acne levels, I'll ask all Minyans to take stock of their holdings and peruse their risk profile. This isn't a directional call as much as its a call to discipline. We all know what was and what is. What I'm trying to discern is what the moving parts portend fof what's to be.
More on this manana, Minyans, as the script remains a work in progress. Enjoy the night and, above all else, be mindful of the important stuff.
Position in energy, metals, financials
Candid Camera - Kevin Depew - 3:10 PM
- After the early morning negative PnF breadth skew, the numbers have shifted slightly, as one might have expected, though not as much as Hoofy might like. New PnF sell signals are outnumbering new buy signals 23 to 8.
- Overall sell signals are leading buy signals 43 to 15.
- Oil and Oil Service lead the way down earlier this morning in terms of sector breadth, but other negative sectors in PnF terms include Semis, Telecom, Precious Metals (natch), Machinery and Tools and Healthcare.
- Interestingly, Banks and Wall Street sectors show absolutely flat PnF breadth, meaning the moves higher are not the result of net new buy signals.
- "You know, I think people are really ignoring the cameras. They just act like they don't care. They just don't care," said another resident. Just ask yourself this: WWAFD? (What Would Allen Funt Do?)
Stayin' Alive - Jeff Macke - 1:22 PM
Man, a guy makes a quick run to the drug store and BANG, the sell-off ends. Since I always mention the group, I feel nearly obligated to mention that the big daddy of the Retail ETFs, the RTH, still has a couple of bucks before it gets to 100. Does the triple digit mark "matter" to the collective of merchant stocks?
By my quick eye-ball count, this marks the RTH's 13th run at 100 since 2002. In all those attempts it's never gotten as far a 103 weekly closing level before pulling back. What's more, the RTH has stayed roughly between the 90 and 100 levels for the last 2 years. My Cliff Note Conclusions are A) the RTH has too much Wal-Mart (WMT) in it and B) the retailers, as a group, remain underowned. Traders didn't just start betting against the consumer; they've been doing it aggressively since the bubble burst. That could make for a lot of chasin' and coverin' if/when the retailers can start breaking out.
As far as consumer names and trades go, Hoof and I are just fine, thanks, with the breakdown in the CRB. It may be bad for the Big Picture but my book and I are focused on Christmas and whether or not folks are going to have enough cash to buy the new Grand Mal Seizure Elmo.
And Todd-O, dude, it was your closet...
Non-Panic in the Street - Adam Warner - 11:35 AM
Odds on the Reps holding the House dipped to 46% as per Tradesports. Still higher than the Yankees' chances of winning the World Series though (36%), but below the midline. Which would seem significant to the naked eye.
Is this weighing on the market? Well, it has not exactly caused an option panic. The VIX has flown.....all the way to the high 12's. And the 50 Day MA, which has served as resistance for the past few months.
We are not all that far away from getting a VERY short term overbought signal from the 10% Above the 10 Day SMA Rule. But beyond that, we are so far away from any sort of significant overbought VIX condition, it is silly to speculate about it.
Just as an aside, the Mets are somehow given as good a chance to win the Ring (14%) as are...The Twins. Go figure.
Just how low will 10's go during this correction? - Bennet Sedacca - 9:31 AM
Well, since I am not yet long 'em (unfortunately, sigh...), probably not as far as I would like. The move in CRB and gold today (not to mention the housing implosion) wreaks of deflation on the horizon.
Bonds topped right at the cycle high on 9/28 and the cycle low is coming up fast around 10/10 according to some of my friends that specialize in that area. The hedgers remain short, but it feels like time is running out to get long. I usually operate under the 'buy em when you can, not when you have to' philosophy and will extend maturities on a sell off.
If I don't get the sell off? Well, I will have to reassess if the risk/reward is sufficient to get long even though not at the perfect level.
This is going to be a tough decision. So you know.....tougher than I would like.
One thing is for sure, however, my firm won't take on a trade just to trade. We would rather find other ways to profit from bonds and protect capital.
Sometimes a dip can be healthy. Sometimes. - Rod David - 8:35 PM
Monday's opening gap down wasn't expected to gather steam. Opening gaps tend to expend more energy than they create, and volume was already expected to be light from the Yom Kippur holiday. But low volume can cut both ways. The noon hour failed to recover above the morning's bounce high, and the market fell prey to a single 20-minute drop to new session lows.
The 20-minute drop's new lows took S&Ps to the lowest level since last Tuesday's breakout close. But the following two hours were unable to retrace the drop, let alone to reverse it. And now S&Ps have fallen further overnight.
A retest of last Tuesday's lows back to SPX 1328 (ESz 1337'50) is in-play. A close above Tuesday's highs at SPX 1336.50 (ESz 1346'00) before then would allow new highs, but only momentarily. And a close under Tuesday's lows at any time would signal that a much deeper - and eventually much steeper - decline was underway.
What you need to know... - Jon Doctor J Najarian - 8:03 AM
Emirates Air Told A380 Longer Delays – The largest customer for Airbus's troubled A380 superjumbo, is "reviewing all options" after being told to expect a further delay of almost a year! Emirates expected delivery this year, but that was pushed to next spring and now they may not get their planes until 2008!
Merrill Upgrades St. Jude (STJ) - MER upgraded the medical technology company saying it expects the company to continue gaining market share from Boston Scientific (BSX). The broker expects STJ to reach 21% market share for high power devices to treat abnormal heartbeats.
Memo Implies Hurd Knew of Phone Records - A memo from Hewlett Packard's (HPQ) outside law firm suggests that Mr. Hurd may have learned about the use of phone records as early as July 2005. The memo does not indicate he knew that the records were obtained through means that may have been illegal.
Lehman Upgrades Apache (APA) – LEH took APA overweight from equal weight, citing the chance for the firm to exploit international opportunities. The oil and gas stock closed at $61.99, $14 under its 52-week high set on February 1st of this year.
Position in APA, LEH
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