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Buzz Bits: Wednesday Novemeber 9, 2005

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Evening Earnings - MV News - 4:06 PM

Cisco
(CSCO) reported Q1 EPS of $0.25 vs $0.24 cons on revs of $6.55 bln vs $6.58 bln cons.

Whole Foods Market (WFMI) reported Q4 EPS of $0.57 vs $0.53 cons on revs of $1.12 bln vs $1.13 bln cons.

NVIDIA (NVDA) reported Q3 EPS of $0.42 vs $0.36 cons on revs of $583.4 mln vs $582.5 mln cons. Gross margin was 39.1%.

Vibes From Minyan Bennet Sedacca... - 2:51 PM

MV -

Thought other Minyans might enjoy some interesting comments fromTom Peterson of Bulls Eye Research on a chart from Ross Clark of CIBC.

"The recent pullback in gold ($456) generated a bullish divergence as the XAU and HUI put in higher lows than mid October. The support line from the May bottoms in the XAU and HUI must hold in order to maintain this bullish bias."

See the chart here, from Ross Clark, CIBC

Under the hood - Kevin Depew - 1:38 PM

Whole Foods Market (WFMI): Not advice, but on a point and figure basis, the stock has pulled back to a 50% retracement level of the bullish catapult pattern breakout. The longer-term price objective counts to 174 and there is simply no evidence on a DeMark basis that the stock has reached an upside exhaustion point.

Sometimes being insensitive can be a good thing - Vitaliy Katsenelson - 12:48 PM

Kimberly-Clark
(KMB) is raising prices for tissues by 6% - very positive for the stock. This is not advice, but as I mentioned before, this stock looks very attractive to me on a risk/reward basis. It is a very defensive stock and its sales are fairly insensitive to (potential) consumer weakness.

Position in KMB

From the Iron Horse's morning missive: - David Miller - 12:34 PM

"But with shareholder-friendly actions likely to pick up, the combined negativism of all other investors would also have to increase to keep stocks from rising."

Short interest reached record levels on both exchanges last measurement period. The NASDAQ's increase was driven by a large bet against biotech. While experience has taught this sort of negativity can go on for some time (we've set like 20 new short interest records in the last couple of years), one has to wonder how much more powder the bears have...

Best Buy? - Kevin Depew - 11:22 AM

A Minyan asked about Best Buy (BBY), which recently broke a double top with the move above 45 on a point and figure basis. The long-term trend in the upper 30s dates back to 2002 and remains intact for this stock; above that support is well established at 41. Not advice, but a conventional vertical price count based on the point and figure pattern yields a target of 63 on the upside, with resistance before that at 50, then 53.

Sluggishness combined with a lack of energy and an inability to focus - Kevin Depew - 11:04 AM

  • The iShares Energy Sector ETF (IYE) is creeping closer to a potential double bottom sell signal at 82. The primary trend is negative, basis .5x3 chart.
  • It's interesting that the top of the trading range in Citigroup (C) has narrowed over the past year while support at 43 on the downside has remained firm.
  • If you are on a boat, instead of a lifejacket, why not lifeshoes? Because, who likes to get their feet wet?
  • Why has the MS Consumer Index (CMR) been stuck below 592 for the past 11 months?

Brad Sullivan: Equity Index Update - Fari Hamzei - 10:20 AM

The index market participated in a quiet rangebound trading session for the 3rd consecutive day. Given the bond market holiday on Friday, it appears as though the indices will continue to chop in their current range until next week.

One index that did test its upside resistance yesterday was the NDX. The index pressed towards the key resistance between 1635 and 1637 before falling back. I continue to believe that the pullbacks from recent trading highs will be smaller and shorter in duration, setting the table for further upside gains. In this index, I expect to see 1700 before year end.

position in ES, NQ, ER2 & EMD

Free your mind, and the range will follow - Kevin Depew - 10:16 AM

Apropos (a French word meaning, literally, a porpoise) of Jason Roney's Buzz this a.m. on the narrowing range on the S&P 500, Minyan Ron points out that he is seeing a similar range narrowing in 14 of 28 ETFs trading over 1M share per day, portending possible volatility expansion.

With the primary contextual indicators I use negative, and considering DeMark exhaustion setups in many of these charts is nearer to buying exhaustion than selling exhaustion, the greater risk is that if a range expansion does occur, it will be to the downside.

David Miller - 10:07 AM

King Pharma (KG) obtains $200-250M in revenue annually from Thrombin-JMI, a cow-based anti-clotting substance used during surgery. ZymoGenetics (ZGEN) just entered pivotal trials for rhThrombin, a 100% artificial form of the drug. The trial pits rhThrombin and Thrombin-JMI head-to-head. Efficacy should be similar. Where the difference will likely be is in the side-effect profile. The cow-based product can cause the patient to create antibodies to important clotting factors, causing them various complications post-surgery. If Zymo's product is superior in the side effect measures, the King product will effectively disappear from the marketplace over a span of 12-24 months.

Zymo plans to file for FDA approval at the end of 2006 and put the product on the market in late 2007. Zymo is in our coverage universe and our Subscribers can read recent comments, caveats, and outlook on the pivotal trial of rhThrombin here.

Speaking of The Google - Kevin Depew - 10:02 AM

GOOG finally reversed down on a point & figure chart (2x3 basis) for the first time since October. How extended is this long string of Xs up? The nearest sell signal is at 290. The trend is your friend until it's not. On a weekly basis, the stock could soon register a DeMark Sequential 13 based on Thomson/DeMark charting software.

Say What? - Kevin Depew - 8:12 AM

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

  • Time Magazine's Inside Business section looks at how hedge funds tied to Refco used "naked short selling" to plunder small companies.
  • Paul Belian writes about the French Riots and "The Breakdown of the Extended Order" in The Brussels Journal. Belian says "Islam is not the cause but the consequence of the problems." Finally, after 16 long centuries, Islam gets its due.
  • Meanwhile, noted French intellectual, and all-around stylish guy, Bernard-Henri Levy, says in the Wall Street Journal this is no Infitada wearing French colors, but "a group reaching its melting point in a Sartrean sense." This is a critically important op-ed piece as it marks perhaps the first and last time the phrase "Sartrean sense" will be used in the Wall Street Journal.
  • The Christian Science Monitor asks, "Did the US military use chemical weapons in Iraq?"
  • The Wall Street Journal editorial team takes up the unpopular cause of the beleaguered energy company CEO scapegoat headed toward Capitol Hill.
  • Socionomic Sign of the Times: "Refco's Collapse Marks Onset of Outrage Fatigue," writes Mark Gilbert for Bloomberg. Alternate view: It marks a bottom in general complacency (cf. France).
  • According to Don Lee for the LA Times, financial anxiety compels Chinese to save, while Americans overspend.

Bell Buzz - Todd Harrison - 3:53 PM

  • There are times when equities are a reflection of the underlying fundamentals and times when they're purely pawns for vehicle starved traders. (Yes, I was thinking of WFMI when I wrote this).
  • If this XAU pennant plays out (to the upside), Chad Johnson will have a mouth full of money.
  • Oh yeah, Cisco. Remember the days when this was the biggest event on the trading radar? No mas, Mon Frere, as the bellweathers slink into the mainstream.
  • Boone Pickens, who predicted that oil would top $60 over a year ago, now sees Texas Tea near $50 in coming months (as a function of a slowing economy).
  • Note Pfizer as it creeps towards the gap ($22.5-$24)
  • All and all, this session was pretty much a push as we never got the late Snappage. Unless, of course, you're weighted to the metals (XAU +3%).

    R.P.
No positions in stocks mentioned.
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