Buzz Bits: Wednesday, November 16, 2005
Your nightly buzz recap.
Yahoo! (YHOO) UPDATE!! - Jon Dr. J Najarian - 4:30 PM
That same WSJ article that we cited earlier got the fire started, but institutional buyers have thrown gas on the fire and Yahoo (YHOO) has just hit a fresh multi-year high of $40.07. This is the highest print for the internet portal since September of 2000 and we've moved our target from $42 to $48.50.
Absolutely explosive buying in the November 40 calls, which are up 800% from last night's close on 26,400 contracts. Huge buying in the December calls as well, with Dec 37.50 calls up $1.85 (150%) to $3.20 on 13,800 contracts. Dec 40 calls trade 19,000 contracts are post a 230% gain to $1.60, Dec 42.50s are up 500% on over 10,000 contracts.
For the record, this is out and out a stampede as the open interest at the Nov 40 strike was 13,000, the Dec 40 was 12,000 and the Dec 42.50 was a mere 470, yet turned over 10,000+ contracts!
January 40 calls jump 120% to $2.30 on 14,000 contacts, while Jan 42.50s trade $1.25, up $.80 (180%) on 15,000 contracts.
This is one of the largest single session moves YHOO has made this year, and continues a Herculean lift it began back on September 20th when it traded $31.50! I can't say enough about how strong the moneyflow has been, both in the underlying stock and in its call options.
Without offering advice to any Minyan, but in full disclosure, we sold 50% of our longs today into this frenzy.
Multiple positions in YHOO
Evening Earnings - MV News - 4:29 PM
- Medtronic (MDT) reported Q2 EPS of $0.54 (in-line) on revs of $2.77 bln vs $2.78 bln cons.
- Applied Materials (AMAT) reported Q4 EPS of $0.15 vs $0.14 cons on revs of $1.72 bln vs $1.63 bln cons. Bookings were $1.69 bln.
- Network Appliance (NTAP) reported Q2 non-GAAP EPS of $0.21 vs $0.18 cons on revs of $483.1 mln vs $476.4 mln cons. The company guided Q3 EPS to $0.20-0.21 vs $0.20 cons and full year EPS to $0.77-0.80 vs $0.76 cons.
Flashback! - Bill meehan - 3:00 PM
5 years ago today found...
- Closing levels: DJIA 10,656; S&P 500 1372; Naz 3031
This day in Minyanville...
- Toddo and the critters digested breakfast and the market at Ollie's as they reflected and discussed the upcoming holidays in Coffee Klotch.
In other news...
- In 1958, Bill Russell set a record with 32 rebounds in the first half. He finished with 49 for the game, and Red Auerbach probably smoked a cigar.
Home Stretch Buzz - Todd Harrison - 3:41 PM
- Raider Nation!
- Snapper is trying to rally the troops--and he still might--but market internals simply don't support it.
- If you think owning General Motors (GM) is painful, imagine if your pension was tied up there as well.
- Word on the Street? It's slow--very slow. My sell side guys are all asking me where the orders are.
- Trish the Dish?
- Hey! If you wanna hook up your firm with a gratis trial with the 'Ville, let us know--the critters make a nice (free) stocking stuffer!
- Sometimes there will be lots to do--or say--and other times we'll share the lesson of patience. Today is such a day, both in terms of risk and in gauging the mnxy directive.
Dr. Kevorkian, I presume? - Kevin Depew - 2:53 PM
Quite a battle here with the Dow potentially reversing down on a 25x3 chart for the first time this month if it ticks at 10,650. Also, rumours are beginning to swirl about a certain high-profile GM buyer facing a moment of decision with the stock down more than 6%.
Finally, are we seeing the effects of long-term pain following short-term gain? Dean Baker from the Center for Economics and Policy Research seems to think so.
Captial Idea - Adam Warner - 1:48 PM
Is the action in Capital One (COF) option's really so unusual today? I saw a blurb go by that noted the volatility lift in the Nov 80 puts from 21 to 29. It's a 25 cent option with 2 days until expiration. The difference between ticking on the bid or offer represents roughly half that gain.
More interesting is the volume, 10,600 vs. an open interest of 2750. But even there, it's simply a cheapo-dollar lottery ticket shot that this American Express Co. (AXP) pre-announcement has some tentacles in the next couple days.
Dan Brown Would Be Proud! - MV Respect - 1:34 PM
"The SPX hit a high that is just about 50% of the rally from the Bernanke low to 11/3 highs. Interestingly the larger pattern has formed a terminal pattern where each of 3 legs up measures exactly .618 of the prior. Terminals can be wedges as well but this one is not the right shape.
The significance is that once again we have reached a logical spot for the market to turn given completions of a number of sub-patterns and measurements. That doesn't mean it has to stop the Xmas rally, but that the conditions are right."
Richard Williams, Garban Institutional Equities
Mini-Minyan Mailbag - Kevin Depew - 12:36 PM
Just out of curiosity, how do you get more buy than sell signals for Oil/Oil Service with stocks ramping in the sectors?
Yes, those sectors are moving higher, but the move higher is not resulting in net new buy signals in those groups. (That could change by this afternoon, as we are talking about intraday data through Noon.) It seems counter-intuitive, stocks moving higher should result in new buy signals, but in my opinion that is the value of the point and figure indicators - they do not do what seems intuitive, and as measures of supply and demand they provide a context for moves higher and lower. We all know that markets do not move in straight lines. Consequently, what is important is to be able to put moves up and down in a broader context. Moves up that do not generate new buy signals typically resolve to the downside, and vice versa.
Lunch Meat - Todd Harrison - 11:28 PM
- Centurian Card be damned! AMEX is off a finski (5%) and draggin' the other piggies with it.
- Will the NDX 1600 gap "fill" or is that to far away to consider?
- Can Snapper spring to life? Yup--it's expiration and folks are jittery to boot. I'm not puttin' chips on the turtle but I'm quite conscious that he's there.
- I'm seeing (and feeling) N's over S's (both ways).
- Setting stops removes emotions.
- Some Minyans are asking about our previously mentioned silver plays. As we don't "do" advice in the 'Ville, I will only say that I'm a holder--not a seller--despite (what promises to be) looming resistance in and around $8. Others might have a different time horizon, however, and rolling (up) stops is a mighty fine technique for the shorter-term crowd.
- As always, I hope this finds you well.
Pulse of the Planet - Jonathan Schwartz - 11:03 AM
News, laughs and ideas beyond borders
- President Clinton tells Gulf Arab nations to spread the wealth to rest of region.
Turks in Germany hang out with Hoofy.
Mysterious Chinese copper trader Liu Qibing builds huge short positions-then disappears
Bush tells big brother China to be more like little brother Taiwan.
Shorts rolling in the $$$$ - Phil Erlanger - 10:15
To follow up on yesterday's comments on the B&B, http://www.hedgeindex.com/ reported October hedge fund manager returns. Dedicated Short Bias returned 2.64% for the month and YTD is now up 20.84%. It is no wonder why shorts are pressing their bets.
Pink Sheets - Todd Harrison - 9:50 AM
Our financial duopoly (XBD/BKX) slinks pink as we edge into the opening probe.
NYSE internals, meanwhile, are flatter than an iPod.
There will always be ample reasons to be long or short. The trick is in identifying the largest disconnect between perception and an impending reality.
Shrinkage? The Russell (small caps) is underperforming anew as it slinks towards the 50-day (RLX 652).
And just like that, the XAU is 3% higher.
position in metal equities
The eroding dollar - Scott Reamer - 8:47 AM
I always find it helpful from a perspective standpoint to look at the long term chart (decades) of CPI whenever I hear comments that CPI is benign. Just since Carter appointed Paul Volcker - known as the Fed's most aggressive inflation fighter - in 1979, CPI has gone from 68.3 to 199.2: a nearly three fold increase.
That's 3 times higher. What does this mean for the purchasing power of the USD?
It means that the dollar you had when Volcker was appointed is now worth $0.34. Thirty four cents. And let me disabuse you of the notion that all that devaluation occurred in the late 70s and early 80s. It didn't: it's been pretty much a straight line devaluation over that span.
That should give even more lie to Bernanke's assertions yesterday.
Say What? - Kevin Depew - 8:10 AM
A look at commentary, opinion and analysis from around the world:
Bloomberg's William Pesek Jr. says Koizumi vs. Fukui is far more engaging reality-politico-Television than Bush vs. Greenspan. The best part is when he expresses his self hatred at the end for writing about it. I mean, whoa dude, where did that come from? Take it easy on yourself.
Meanwhile, speaking of Bush and Koizumi, Edward Seidensticker in the Financial Times offers the President advice on what he should tell Koizumi about his neighbors.
The Chinese people are felling pretty, pretty, pretty good about themselves these days, says Donald Greenlees in the International Herald Tribune.
And no wonder they're feeling so good about themselves; Ross Terrill on Boston.com is absolutely worried sick that the rise of China means the eclipse of the United States.
On a darker note, first reported by an Italian news agency several weeks ago, the story of how US forces in Fallujah may have used "unusual weapons" is not really going away, much to the Pentagon's chagrin.
According to Military.com, the return to civilian life for US soldiers deployed in Iraq is marred by an unemployment rate three times the national average.
Danish filmmaker Lars Von Trier tells Spiegel Online, "we are all products of the United States." Considering he has never been to the States, his existence as a "product" must be a case of outsourcing.
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