Buzz Bits: Dow, Nasdaq Edge Lower
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
- Qualcomm (QCOM) reported 4Q EPS of $0.42 vs $0.41 cons on revs of $140.0 mln vs $144.4 mln cons.
- Whole Foods (WFMI) reports 4Q adjusted EPS in-line of $0.29 on revs of $1.3 bln vs. $1.32 bln cons.
- CA Inc (CA) reports 2Q non-GAAP EPS of $0.25 vs. $0.20 cons on revs of $996.0 mln vs. $968.4 mln cons.
- Electronic Arts (ERTS) reported 2Q EPS of $0.21 vs $0.02 cons on revs of $784.0 mln vs $672.1 mln cons.
Mid-Afternoon Breadth - Tom Alexander - 3:05 PM
The December Russell, Nasdaq, Dow and S&P mini futures are trading in the area of important support. Also, as Todd mentioned on the Buzz yesterday, breadth was negative (NYSE up vs. down issues) but not as much as would otherwise have been the case because of the strength of the interest rate sector that had a positive pull on the interest rate proxy funds that are listed on the NYSE.
Breadth in the Nasdaq Comp was not affected by the positive interest rate effect and breadth in that index did register "oversold" levels from where the Nasdaq (and other indices) has been very close to pivot lows followed by new rally highs. If it is different this time it is a message a top of greater significance than any since the rally began in July may be forming.
As of mid-afternoon breadth in both the NYSE and Nasdaq Comp is holding above lows formed yesterday.
Dec. S&P mini: 1373-1369
Dec. Dow mini: 121.44-120.26
Dec. Russell mini: 749.40-748
Dec, Naz mini: 1716-1710
Dec. S&P mini: 1381.75-1383.75
Dec. Dow mini: 121.48-121.60
Dec. Russell mini: 765.30-768
Dec. Naz mini: 1734-1738
Just how important was that initial claims number? - Bennet Sedacca - 12:23 PM
The print of 327,000 initial jobless claims changed the trend in claims to UP--in other words, yet another sign of economic slowdown. The bond market is, at the moment, reacting more to the wage numbers; but as I mentioned yesterday, 108-16 in 10's was a likely short-term resistance point - and it was.
But see the chart here of the SPX versus initial claims since 1985. Note that they are INVERSELY CORRELATED. And that ain't good for stocks, if history is a guide. And with productivity plummeting, who knows what the future holds?
Net, net, I think still bullish for bonds and yet another caution light for stocks (they are piling up, no?).
See the monthly MACD chart of claims, indicating a change in direction.
Position in 10 year note.
Outta the Gate - Kevin Depew - 10:38 AM
- The percent of stocks above their 50-day moving average indicators for the NYSE and Nasdaq are officially negative.
- This suggests the broad market could come under pressure until these indicators are relieved either by price or time.
- Is it the beginning of the end or the end of the beginning? The PnF bullish percent indicators, which have been steadfastly positive throughout, will tell us when supply formally takes control of the market. For now... they remain positive.
- The Nasdaq-100 (NDX) has broken a bearish triangle with the next level of support at 1695. Below that, quite a bit of air.
- Keep an eye on the 302 level for the CRB Index. A move below that would create a new PnF sell signal.
Sellers Now Dominant in the Mid-Cap 400 (MDY) - Jess Thompson - 9:14 AM
In the Summer of '06, the Mid-cap S&P 400 (MDY), along with most stock market indices, suffered from a severe liquidation. My firm alerted clients in July that the primary trend was still up in the Dow 30 Industrials (DIA) and that a strategic stock market buy was setting up.
The MDY also gave a buy signal in early August as the then dominant offers were breached to the upside at X (see the chart here) indicating the character of the price action was changing in favor of buyers. When the order flow bias is up, my firm expects buyers who are dominant to defend the bid line, therefore the correct tactic is to increase size and accumulate long inventory at low-risk inflection points.
This tactic generated a series of low risk buy signals at A, B, C, D and E. Yesterday's thrust down through the bid line at F is a clear change in the character of the recent price action and reverses the order flow bias from up to down.
Bears are now in control and what appears to be the correct tactic is to minimize long inventory and increase and accumulate short inventory on rallies into low risk sell zones (G).
Positions in MDY, DIA
What you need to know... - Jon Doctor J Najarian - 8:11 AM
Canadian Tax of Income Trusts Hits Hard! Canada's income trust index tumbled 12.4% after the Canadian finance minister announced plans to tax income trusts. Such trusts payout 4% to 15% and have been very popular vehicles and there are over 250 such trusts with a market capitalization of some $178 billion.
Tribune (TRB) Prepared To Sell Off Parts! The TRB didn't get bids much higher than its $8.4 billion market capitalization, so the genius' at the media company have decided to consider selling off pieces of their empire, which includes the Chicago Cubs.
CVS To Buy Caremark For $21.3 Billion – The drugstore operator announced yesterday it is buying pharmacy benefits manager Caremark Rx to create a $75 billion drug distribution powerhouse that can take on retail leader Wal-Mart (WMT). Yeah, that's a good idea, go all in to compete with WMT. Another management team that must have rode the small bus to school.
MasterCard's (MA) 3Q Income Up 82% - Strong consumer spending sent more electronic transactions through MA's payment network and thus the massive surge in income. Revenue rose 14% to $902 million from $791.6 million.
Position in MA
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