Buzz Bits: Dow, Nasdaq Fall
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Seasonal Bias - Jason Roney - 3:02 PM
There are many statistics about the upside bias for November. Just last week, I noticed the extremely positive historicals for November through December when the Dow was up 10% year to date by October month end. But the November carnage calls into question the seasonal bias for the remainder of the month.
Over the last 50 years, the S&P 500 finished November higher 70% of the time by an average +1.62%. Of those 50 years, however, the index managed a monthly drawdown of more than 5% (as we've already seen) just eight times before. And the index was never able to mount a comeback to close the month positive.
If we isolate the above occurrences to those years where the 5% decline occurred over the first 10 days of November, we're left with just three occurrences: 1973, 1987, and 2000. Worse yet, it's worth noting that of all the November returns for the last 50 years, those three years were the worst. Will 2007 reverse that trend?
EMC Looks Good For a Parial Add - Sean Udall - 2:18 PM
I added a partial position that puts me back long EMC (EMC). Basically, I'm playing a chicken long on VMWare (VMW) which my gut keeps telling me I should hold my nose and buy some of.
However, I think EMC's core business is quite undervalued as I did when I talked about my bullish stance on EMC weeks ago. The Cisco (CSCO) news (on Enterprise weakness) was the perfect catalyst for tech bears looking for an opening. After the last three days I think we have more than accounted for "potential" enterprise weakness with various companies. As far as enterprise spending it's one of many areas where the CSCOs, EMCs and other large technology shops acquire business. The fact that the carrier business is trending higher should be viewed as a bigger upside catalyst than the risk of lower sales due to declines in enterprise spending.
Bottom line, I took my gains in EMC a while back and now the stock is well below levels where I think the value of the enterprise resides. I'm leaving room for purchases in the $18's if need be. CSCO, yet another name I disposed of not too long ago, is also tempting on a break to the $27.50- 28.50 range. Although it too could be bought here as long as your timeframe is something longer than a few days or weeks.
Position in EMC.
Between the Ticks - Jeffrey Cooper - 12:35 PM
- Leverage and liquidation: The Corsican Twins.
- Remember that excess leverage means that multiples of the underlying collateral must be sold when things hit the fan.
- And liquidation is what we are seeing on many names and it doesn't respect valuation or technical price levels.
- Under Armour (UA), a once beloved trendy name, is a good example.
- Note the failure when the stock offset the large range spike from Oct 30.
- Panic is in the air.
- If the S&P closes below the fulcrum or the midpoint of the summer lows and the October high which is approximately 1474/1475, yesterday's close coincidentally, does that suggest a Black Monday?
- Isn't it ironic that in a year ending in 7 near the 20th anniversary of the 1987 plunge that the S&P scores a high in October?
- Y'all see the big reversal in Agnico-Eagle Mines (AEM), a gold leader, three days ago?
- Do cycles suggest a near term peak in gold, a pullback, as it approaches historic all time highs?
Hello again from New York where I'm doing my part for NBC Universal's "Green Week" by enjoying natural resources. I've got the AC and the heat cranked at full, every light in in the house on and all my televisions tuned to CNBC's coverage of a red market. Out front, I've got three cars idling while the kids feed chunks of sweet, American coal into my Mother Earth Bonfire. Once the black smoke clears my neighbors will be able to enjoy a few million watts of yuletide lighting and Run DMC's "Christmas in Hollis" on an endless loop from now until New Year's Eve.
It's Like Rain On Your Wedding Day - Jeff Macke - 12:22 PM
If you're in the area stop on by; I'll leave a few lights on for ya!
- I shoulda run from all of my EMC (EMC) which has been gotten at least its share of the sell-off this week. As is, I've got 1/4 of the original shares I purchased last Spring and the stock is looking very near a point at which I'd start adding shares long. (Guy Adami wrote about EMC today).
- Other plunges that are becoming interesting: Microsoft (MSFT) anywhere lower than $33; Intel (INTC) lower than $25 and Citigroup (C) at $2.
- Stocks I just can't get myself interested in buying though I might regret it: Starbucks (SBUX), WalMart (WMT) and my former beloved, JW Nordstrom (JWN). The last was downgraded to "peer perform" today as it approaches a 50% decline from 52-week highs. Of such downgrades are ironic bottoms made.
- Snapper seems surprisingly shy today. It makes sense for the market to rally, if only because Boo's crew is going to start celebrating the week in about 10 minutes. The financials led us lower and they've rallied since last I wrote. Keep it on your radar.
Positions in EMC and INTC.
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