Buzz Bits: Monday, November 21, 2005
An evening taste of the daily buzz...
Sales Numbers - MV News - 4:33 PM
Target (TGT) said sales in the third week were somewhat improved and sees Nov comps of +2-3%, assuming sales are on plan for the fourth week. TGT's original guidance for the month was +4-6%.
Tried to put this j-o-b in effect
But they'd look right past 'em and be like next! - MV News - 3:29 PM
Market analysts predict either UTStarcom (UTSI) or Harbor Networks Holdings Limited may be the next acquisition target for Ericsson (ERCICY), following the Swedish telecom giant's latest buy into UK-based Marconi Corporation Plc, according to Shanghai Daily.com.
The forecast, cited by today's China Business News (CBN), came after Ericsson's President and chief executive officer, Carl-Henric Svanberg, revealed last Friday in South China's Guangzhou city that his company is engaged in talks concerning an acquisition in China. He didn't name the target, describing it as a business secret.
Get it while it's hot? - John Succo - 3:21 PM
Rarely have I seen as much call selling as I have seen in bank stocks, mostly in Citigroup (C).
Over-writers ( I assume) are tripping over themselves to collect pennies.
In a down market if they are long stock against these sales it will not do them much good.
If the stock goes up, they are giving away much upside, again for pennies.
The stock may never move again and they may collect their pennies, but so far it has not. Grinding higher, with sudden bursts of 2% is hallmark for a stock that has too much call selling done on it.
The only thing that hasn't happened is a collapse. Check in after January expiration and I will tell you if these over-writers have any hair left.
Position in C
Chart alerts! - Fil Zucchi - 3:11 PM
There are a number of charts out there reaching important levels.
- Interwoven (IWOV): a long time fundies fave of mine is tickling important resistence.
- Goldcorp (GG): $21.10 would represent a break-out from textbook reverse dandruff.
- Tradestation (TRAD): they tried to get it down and they could not. If you ever used their platform you'd know why.
- Massey Energy (MEE): for those interested in coal, this one has come down to a strong support area.
Just sharing the eyes and not advice.
Positions in IWOV, TRAD, GG
Mini-Minyan Mailbag - John Succo - 2:53 PM
Is it "just me" or does this "smell" a bit like 1987? Substitute "The
Greenspan Put" for "Portfolio Insurance" and the subtext of "The market always goes up (whether Real Estate or Equities...)"...
Throw in complacency and little regard for risk and what do we have...?
In the sense that things are priced to perfection, yes it seems so.
But things are much different today than in 1987. The real economy is much more dependent on the stock market than it was then. Public and consumer debt accompanied by untenable cross-border capital imbalances today are the result of a hyper-active Fed that began its misdealings in earnest in response to the 1987 stock market crash.
Acrimony Manifest - Todd Harrison - 2:37 PM
As the Minx slinks through the afternoon muck, I've spent some time connecting with my brethren around the Street. I'll again share that nerves seem particularly frazzled across the board, even among those who are having a successful year to date.
While I assured them that this too shall pass, it's hard to ignore the heightened state of tension. While I'm not shocked, per se, I am quite conscious of the evolving dynamic. In particular, I can't help but wonder how this mood will manifest when the eventual downturn finally arrives.
I don't have any answers as I'm not sure they exist. I will simply urge ye faithful to take a deep breath and relax your grip on the handlebars. We call it the long, hard road for a reason and we need to respect that the minxy war is a battle of attrition.
Keep your head up, my friends, as that's the only way we'll find better tapes and better moods.
Flashback! - Bill Meehan - 2:16 PM
This day in market history...
- Closing levels 15 years ago today:
- DJIA: 2539.36
- S&P 500: 316.03
- Naz: 348.8
- Crude: $30.08
- Gold: $377.30
- GM: $37.63
This day in Minyanville history...
- In '02, Toddo talked tape and trading in Donke Shoen
In other news...
Happy 36th birthday to Ken Griffey Jr. This just in, Griffey tore a hamstring while blowing out his candles and will be sidelined for next season.
Let's Get Together - John Succo - 2:08 PM
The revised merger agreement between Guidant (GDT) and Johnson & Johnson (JNJ) stipulates that there must be new material changes in order for JNJ to be able to back out.
All events prior to this new agreement are deemed part of the new deal.
Managements of both companies have basically said this deal is going through.
But we still see buyers of GDT puts at prices that make little sense. Maybe someone knows something we don't, but we put the probabilities of the deal going through as is at 97%.
Positions in GDT and JNJ
Ours Goes to 11 - Adam Warner - 1:15 PM
Look out below in the VIX as we threaten to breach back into Bo Derek levels. Keep in mind it's a perfect storm for a low statistical reading here between a slow, up-trending market, post-expiration option rolls, and the imminent holiday weekend. More lack of interest than anything else.
Here's some more cover bands I'd like to see. Durante Durante, Psychedelic Fur Traders (actually that's a store I'd like to open up at the local Mall) and Phish.
Minyan mailbag on solar power - Fil Zucchi - 12:28 PM
One of the original, and ongoing, concerns around SunPower (SPWR) is the ever growing tightness in the polysilicon market, the raw material needed to make solar chips. While SPWR may well have access to supplies, it is still exposed to prices which have risen almost 50% in the last year. MEMC Electronic (WFR) is a primary producer of polysilicons. Here are some more comments on the topic from wise Minyan GL.
I've been active in the development of solar electric and thermal projects for tax oriented investors so I've been closely watching the polysilicon shortage issue. A keynote speaker from MIT at the annual NREL report in Denver noted tight supplies but not a shortage. I think he's wrong and hasn't factored in the increased demand from the 30% ITC. There was some good and bad buzz about SPWR at NREL. Good that some concentrating technologies are using them for high performance collectors and they are acknowledged to have a high performance panel/cell. Bad that they and other higher performance C-silicon PV makers apparently suffer pretty bad performance degradation at high temperatures and in certain diffuse radiation climates.
I came away hearing Evergreen Solar (ESLR) is really in the sweet spot in terms of high performance combined with economical use of silicon.
Position in SPWR
Pulse of the Planet - Jonathan Schwartz - 11:20 AM
News, laughs and ideas beyond borders...
Globes Online reports Israeli insurance companies expand foreign investment 37% in 2005.
Xinhua Online reports 99% of Chinese businesses don't donate to charity. Businesses point finger at tax laws.
MosNews reports Russian arms exports increased by 15 times over last three years. Jumps from 30 countries to 50.
An afternoon of videogames used to get you nowhere, now it can get you a medal and $80,000.
Pop till you Drop? - Todd Harrison - 10:49 AM
The Minx edges to the green as Hoofy tries to gain some steam. I opined earlier that S&P 1250 may be a bit obvious (as a road block) and we might need to breach it before some stiffer supply materializes. I don't know if that's today's business but for purposes of my approach, it doesn't matter much.
As most of my paper is December and defined, the "trading side" of my portfolio remains relatively tight. I'm still short a spate of financials vs. some tertiary longs (that I've been peeling out of). On the other side of my book, the metals and energy exposure has served me in good stead (althought they're due for a rest).
So, as I scribe vibe and watch tape, I'm looking for incremental opportunities that stand out as advantageous risk/reward. The homies continue to intrigue me (on the short side) but I haven't stepped up to the plate yet. If I do--and as I do--you'll be the first to know.
As always, I hope this finds you well.
Two roads diverge... - David Miller - 9:43 AM
In a Buzz from last week, I noted the strength in the NASDAQ Biotech Index (NBI) and its positioning to break past a double top formation.
If you pull up a chart of the NBI and compare it to its larger-cap bretheren in the AMEX Biotech Index (BTK), you see a big divergence. The likely proximate cause for the divergence is the difference in short interest between the two segments of the space.
Our understanding is the big bets being placed against NBI companies are being offset by positions in larger cap biotech. Since regulators fail to provide timely short interest data to market participants, simply watching those monthly numbers may not be enough to see if this trend continues. Instead, watch the relative movement of the two indexes.
A rally in the NBI will really have legs when it starts regularly besting the BTK.
Morning vibes from Katie Townshend, CMT, of MKM Partners: - MV Respect - 8:54 AM
"Hopes for a rally run deep, but we disagree that it's a sure thing. There is the historical phenomenon of the "Santa Claus rally," which is attributed to year-end influences. However, according to the Stock Trader's Almanac, this does not occur until the second-half of December. We believe it could come in the shape of another failed oversold bounce rather than a continuation of the current upmove. In support of this, the weekly stochastics are approaching overbought extremes again for the major indices. The speed with which this occurred is disconcerting because it reveals a market that is quickly saturated by willing buyers."
Say what? - Kevin Depew - 8:29 AM
A look at commentary, opinion and analysis from around the world:
The St. Louis Post-Dispatch says of the war in Iraq, its "time to start marching out."
Llewellyn Rockwell Jr. writes about our Money Madness; a tale of a world before central banking/planning, and a world after central banking/planning. Also pirates. Seriously.
New Orleans today: It's worse than you think, says Time Magazine.
The Washington Post's George Will asks if life has become so mind-shatteringly awful that we must constantly entertain ourselves with iPods to the point of limitless self-absorption? If his little article doesn't mention me, then "Yes."
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