Buzz Bits: Dow Edges Lower, Nasdaq Rises
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
Can you say 'correlation?' - Bennet Sedacca - 1:11 PM
Another day, another overlay chart--see it here. It is the S&P versus Japan, Europe and Brazil. If those aren't correlated, I don't know what is.
But notice how the Nikkei was a leading indicator in May for the rest of the world (I got this concept from Citi - thanks for the idea). Their market reversed hard the past couple of days.
The question is can the world be far behind? Brazil is selling off today and so did Europe. So we need to watch this relationship closely.
One last thing. I have examined the positions of hedgers in the SPU, Russell 2000, NDX and DJIA. Directionally, they are all going the same. More on that tomorrow.
Demand is in control... - Kevin Depew - 11:31 AM
Yes, demand remains in control of this market according to the PnF bullish percent indicators. Meanwhile, the percent of stocks above their 50-day moving average indicator for the S&P 500 may very well reverse down today. It is currently at 80.6%, only .4% away from reversing down on the PnF chart. Prior reversals down since August have simply provided entry points for bulls, however.
Here is a chart courtesy StockCharts.com showing the indicator with the SPX behind it. As you can see we have been above the high-risk 80% level for nearly all of October. This historically cannot continue without a pullback.
Meanwhile, here is the divergence in participation shown by the long-term NYSE Bullish Percent and the NYSE Composite Index. Importantly, we will want to see the bullish percent reverse down as it did in May before we declare the buy-the-dips gameplan officially dead.
Bull Market on Vacation? - Rod David - 9:59 AM
Last Monday's high in S&Ps is the oldest part of last week's price action, but it is proving to be most relevant. Friday's close was AT last Monday's high, where that session had begun forming a "lunch hour reversal" setup, and where Tuesday's higher close had prevented the session's earlier "pivot reversal" setup.
In other words, holding last Monday's high as support is pretty critical to whether the rally persists. Wednesday's lows had already ranged around last Monday's highs, chipping away at its support, so this level wasn't required to be retested again. Not after having recovered to new highs. Not unless it were the market's intent actually to break lower.
Bull markets have a way of pushing prices to the brink, and then snatching them from imminent failure at the last minute. Is this one of those times? S&Ps were pushed to the brink Friday afternoon, and lower overnight, rejecting Friday's last-minute surge. If the Bull market doesn't snatch S&Ps from failure this morning, then the Bull market is on vacation.
Crude Update - Adam Michael - 8:45 AM
Crude oil continues to consolidate in the high 50's/low 60's. Are we basing or churning? Only time will tell…
Although commercials are not as net long as they were last year, they have remained net long for four weeks now which is encouraging. Open interest continues to remain at elevated levels, but has come off its highs. See the chart here.
What has caught my attention is the %R indicators I run on the COT reports. Last year, the %R for both open interest and net commercial position were bullish for crude for most of the month of November – right before crude ripped from the mid-50's in late November to almost $70 by the end of January. It appears we may see a similar setup this year as my %R for the net commercial position is bullish and the %R for open interest is getting more bullish (not there yet). See the charts here and here.
I continue to remain neutral on crude here and will wait for the market to provide further clues. It would not surprise me to see one more leg down, but a move over $62ish might suggest a bottom is in.
What you need to know... - Jon Doctor J Najarian - 8:10 AM
Big Oil Pockets $95 Billion Through 3 Quarters! Exxon (XOM), Chevron (CVX), Royal Dutch Shell (RDS), BP (BP) collectively earned $31.6 billion in the quarter. Believe it or not, that's down 4% from a year ago when they earned $32.9 billion!
Wal-Mart (WMT) October Sales Disappoint – WMT's same-store sales came in below their lowered forecast and that's helping pressure futures in the pre. The world's largest retailer, blamed the lower growth on disappointing apparel demand and disruption from store remodeling projects.
Nikkei Suffers Largest Drop in 3 months - Japan's industrial output fell in September and that info coupled with the growth data caused investors to hit the exits, pushing the Nikkei down 1.9%, or 317 points to 16,351.
Hertz IPO To Raise $1.8 Billion – The Carlyle Group and another private equity group bought Hertz from Ford 10 months ago and they've already put enough lipstick on it to sell it. The private equity guys will retain 72.5% and sell 27.5% to the public.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter