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Buzz Bits: Dow Dips Again


An evening taste of the daily buzz.


Looks like Donovan's Eagles aren't the only ones disappointing... - MV News - 4:10 PM

American Eagle Outfitters (AEOS) reported Nov comps of +1.7% vs 10.9% exp.

The company lowered Q4 EPS to $0.70-0.72 vs $0.73-0.75 prior and $0.74 cons.

Slip Slidin' Away - Kevin Depew - 3:36 PM

Hoofy is nonchalant about the latest slip in the indices as we head toward the close. We're overbought, we're tired, we need a rest, he said. (Also, check out the Russell 2000 holding steady in the green.)

Fair enough. One of the toughest lessons I've ever learned was that extremes in bullish sentiment is simply one among many conditional elements of selloffs, not a trigger in and of itself. Still, while I see the possibility of another gasp higher, I've maintained my bearish position in the SPX complex with defined risk.

Mini-Minyan Mailbag - Scott Reamer - 3:20 PM

Scott -

Question... where do you guys expect the flow from real estate to go, as sellers head for the exits? That's been my real competition the last few years down here as a portfolio manager in Florida.

Minyan SDS


You may like my answer: in my opinion, there will be no flow. Just like the bulk of stocks were sold near the bottom (or at least very depressed prices) resulting in a massive destruction of capital, the same but WORSE could take place with real estate.

Why? Because the liquidity for the real estate market is much lower; such that one house on a block can sell for 20% lower than the market resulting in the ENTIRE block then getting re-set at that lower price.

So, just as the crowd (the bulk of the properties in this case) will be sold - like stocks - near the bear market low (many years from now), so too will the real estate holdings. Thus, we are likely to see a massive dissappearance of real estate 'value' without it ever having to translate into actual capital flows.

A Flair for the Dramatic - Kevin Depew - 2:42 PM

  • Anybody else notice how the Financials are taking a secret beating here under the radar? Fannie Mae (FNM) is off more than 2.5%, the BKX is down nearly 1.5%, and the XBD is off 1.3%.
  • Oh well, it's probably nothing to be concerned about.
  • Speaking of beatings, "To be the man, you gotta beat the man"...and it would appear, from this photo, that the man was indeed beaten, and subsequently captured.
  • And speaking of wrestling, the low-volume stock for World Wrestling Entertainment (WWE) will break a spread triple top with a print of 13.50; a spread triple bottom with a print of 12; a potential T-bone suplex or piledriver, depending on where you are standing.
  • And speaking of T-Bones, this T-Bone is no longer at large, though the alligator apparently is.
  • See how everything is related and the world comes full circle?

Position in FNM

Flashback... - Bill Meehan - 1:45 PM

This day in market history...

  • Closing levels one year ago found:
    • DJIA: 10,428.02
    • S&P 500: 1173.82
    • Naz: 2096.81
    • Crude: $49.16
    • Gold: $451.00
    • RIMM: $88.97

This day in Minyanville history...

  • Prof. Reamer asked, "what are they thinking?" when it comes to foreign buyers of our debt in Fortune Cookie Monster.

In other news...

  • In 1987, on his birthday, Vincent Edward Jackson (Bo knows who that is) had 221 yards rushing and 3 TDs on MNF against the Seattle Seahawks. I wonder if The Boz remembers that game?

What if? - Jason Roney - 1:15 PM

After running a series of "what if analogs" this one seems of interest -- if the SPX stays below yesterday's high -- which seems likely at this point: the SP 500 has a series of four consecutive lower highs since recording a high last Wednesday. So, what happens on the first day of a new month after four consecutive lower highs on the daily chart? Over the last 30 years, there have been 20 occurrences and the close was positive 75% by an average +.64%.

Also, check out the German DAX. It had an outside day, then back-to-back inside days, and with the ECB rate meeting (possibly the first hike in five years), would not be a surprise to see some movement take place in the DAX, which has been locked in a very close range for 8 days.

Hold me closer tiny dancer
Count the headlights on the highway - Todd Harrison - 12:38 PM

We're officially over our weekly hump as we tee up the back nine and look for a solid drive. While the tea leaves were balanced earlier (financials vs. breadth), the former has gotten laggier while the latter has flattened. And all the while, we're dancing on the pin head that is SPY 126.

We opined recently that S&P 1245 may be the "easy" trade and, while nothing seems easy these days (see: Mercury Retrograde), we're not that far away. What's unclear, at present, is whether month end flows will buoy the tape and push out that date with destiny.

As always, I hope this finds you jinglin'.


Pulse of the Planet - Jonathan Schwartz - 11:22 AM

News, laughs and ideas beyond borders...

Middle East/Africa


  • China plans to merge Internet, telecom and broadcasting networks into one.



DeVibe from DeScribe Jeff DeGraaf - MV Respect - 10:53 AM

"On the short-term hourly charts, oversold conditions have presented themselves, but there has been no sign of a momentum turn out of this condition. The good news from an intermediate perspective is that the weakness of the last 2 days has not been accompanied by signs of distribution.

With breadth and new highs diverging as the S&P makes new highs, we admittedly believe the upside is limited, but without distribution, we also believe it to be too early to be an aggressive bear."

Deck the Halls with Wall Street Gains - William Fleckenstein - 10:18 AM

In the 'tis-the-season' department, I think that lots of folks are renting stocks -- i.e., buying them because they believe it's a slam-dunk the market will go higher -- whether or not they have any merit. Though playing that game happens regularly, I think that at this moment in time, it's occurring on a much larger and more pervasive scale than ever.

Take the action in Dell (DELL), which is almost back to where it was the day before the company had that ugly preannouncement a month ago. I am assuming that the buyers of the stock think: "Well, here's a quality company. Down a whole bunch. They already preannounced. They've announced their quarter and sure, it was awful, but gee, they can't need to say anything bad this soon, so it's gotta be safe to trade."

I think that attitude permeates the tape. While it may work, it may not, because sometimes a stock surprises you -- witness the fact that in the last two days, Google (GOOG) has dropped about $20. Not that Google wasn't "entitled" to a bit of a breather, but I think people had come to believe that the stock just couldn't possibly go down.

In the mania precipitated by Greenspan, stock renters have won far more often than they ever did in the past, by my reckoning. For those of you at home who are tempted to rent a stock because it looks so easy, my experience is: About the time you arrive at that conclusion is about the time it stops working.

Sometimes you gotta fight, when you're a man. - Jeff Macke - 8:12 AM

I'm going to Kansas City today for a board meeting. The business trip is going to happen, regardless of how I choose to feel about it. I could opt to whine about my yesterday, when my column was eaten along with about 5% of my Google (GOOG) and 10% of my TiVO (TIVO) longs. I could drop two scoops of sand in my under-ma-pants and sport a quivering chin all the way through Friday.

Alternatively, I could sharpen up my broadsword, don the face paint and sound my furious yawp to the four winds as a chilling portent of doom to those who would oppose my efforts to provide for my kinfolk.

Allow me to pick a couple of fights while the Minyanship guesses which way I'm going to take it:

  • Banc of America (BAC) is out saying that video game sales for November were "surprisingly weak". The weak part is right but "surprise" is a relative term.
  • Chico (CHS) rocked the house on EPS this morning, fitting our "hot retailers stay hot" theme.
  • "Fighting for a board seat" is not the same thing as having a clue as to how to run a company. Every mention of Icahn pushing around Time Warner (TWX) should include a graph of Blockbuster (BBI) and General Motors (GM)

positions in TiVO, GOOG

Say what? - Kevin Depew - 8:07 AM

A look at commentary, opinion and analysis from around the world:

  • The Wall Street Journal's Kris Hudson reports that some investors are concerned that Wal-Mart's (WMT) steep discounts this Holiday season will exact a price; namely, profitability. There is but one answer, and it's not rocket science - profitability in the face of expanding discounting requires expanding margins.
  • How do homebuilders plan to ride out a possible downturn? Just like the rest of us: watching reruns of Meredith Baxter-Birney in the Lifetime Original Movie, "A Woman Scorned: The Betty Broderick Story," with a quart of gin. Oops, sorry, that's just me. This WSJ article says homebuilders plan to just "earn" their way through it. Huh.
  • Is it really possible that I've turned into just another one of those nutty, libertarian "freedom lovers" who gets cranky when my civil rights are violated? Like this lady? Look at her. Just look at her! Crazy freedom lover. She's dissonancing my cognizance!
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