Buzz Bits: What a Rally!
Sweeping up under the bell... - MV News - 4:12 PM
Starbucks (SBUX) reported Nov comps of +7% with net revs +22%
UBS downgraded U.S. Steel (X) to reduce from neutral citing valuation
Diamond in the back, sunroof top, digging the scene with a gangsta lean, ooh ooo-ooooh - Kevin Depew - 3:11 PM
Diamond Offshore Drilling (DO) broke a spread triple top today with the move above 63. Interestingly, the point and figure price count based on the October pullback to trendline support suggests a longer-term target of 79, compared to support at 60.
Not all energy plays are alike. In 2003 virtually anything energy related was acceptable, but as this trend has matured, the plays have narrowed.
Consider the iShares Dow Jones U.S. Energy Sector (IYE ), for example, with a nearly 40% weighting in just Exxon Mobil (XOM) and Chevron (CVX). Both of those stocks are laggards in their peer group and have weighed on this particular ETF.
While ETFs are great tools for picking up quick and dirty exposure to a particular sector, it is critical to understand the components and weightings of the ETFs you play.
Trudging up Achilles Hill - Kevin Depew - 2:01 PM
- See the VIX, VXN and VXO, all three down anywhere from 5.5-7%?
- Did you know that one in six of Switzerland's richest residents are involved in the luxury goods sector?
- Speaking of luxury goods, I think the time has finally come for the suede laptop.
- You can add Colgate-Palmolive (CL) to the list of stocks violating downtrend resistance and generating a new buy signal.
- The future looks finger licking good!
- The Merrill Lynch Nanotech Index (NNZ) has also broken a double top today, but it's very small and hard to see.
- For lunch I ordered a Greek salad. Apparently, I forgot to specify NOT ANCIENT GREEK. I'm not sure when it was made, but on the bottom of the box it said "Ìῆíéí ἄåéäå èåὰ ÐçëçúÜäåù Ἀ÷éëῆïò."
- Dude, let's get Trumped up!
- Although it often feels personal, I can assure you (and myself) that the market could not care less whether we are making or losing money.
Flashback! - Bill Meehan - 1:44 PM
This day in market history...
- Closing levels this day 8 years ago found...
- DJIA: 8013.11
- S&P 500: 974.77
- Naz: 1630.72
- Crude: 18.76
- Gold: 294.35
- XOM: 61.56 (25.58 adjusted for dividends and splits)
This day in Minyanville history...
- Toddo published a mailbag from a Minyan reminding us of lessons from Jesse Livermore's "Reminiscences of a Stock Operator"
In other news...
In 1990, the "Chunnel" between England and France was completed as workers from the two sides met 40 meters below the Channel seabed. Noice! Now how many feet is that?
Pulse of the Planet - Jonathan Schwartz - 12:15 PM
News, laughs and ideas beyond borders...
Two women elected to Jeddah Chamber of Commerce and Industry in first open-gender election. 100 women and 4,000 men participate in vote.
Chinese government says it aims to maintain fast growth, with an emphasis on efficiency and aiding the rural poor.
EU grants market economy status to Ukraine. Show me the steel baby!
Globe and Mail reports Canadian home prices to rise 6% next year. Calgary leads the upswing. Transactions to slow by 3%.
Kurt Rambus - Adam Warner - 12:04 PM
Big volatility lift lately in Rambus (RMBS) as they get ready yet again for another installment of "Law and Order: Special Chip Unit". Apparently the never-ending litigation involving this name has spawned a generation of Courtroom Groupies who follow the case from town to town. Sort of like a bunch of Deadheads with Lear Jets instead of VW vans.
I shy away from names like RMBS, and now Research in Motion (RIMM), as there remains little edge in buying pumped options ahead of an anticipated news event.
Mini-Minyan Mailbag - Kevin Depew - 11:00 AM
Can you take a look at Encore Wire Corp. (WIRE)? This company is involved in manufacturing copper electrical building wire and non-metallic cable. With copper moving up does this chart look potentially explosive?
Not intended as advice, but on a point & figure basis the chart looks as if the explosion has already occurred. There were two potentially playable risk/reward setups on the chart, one in September with a double top break that occurred at 15.5, and another in October with a spread triple top that occurred at 17. WIRE has a price objective based on the August move off the bottom of 28.50, near the 2004 high, so the bulk of this move appears over in my opinion.
Why does everyone hate bonds so much? Even Mikey likes em! - Bennet Sedacca - 10:36 AM
The Conference Board just released their monthly Interest Rate Expectations Survey. And can you believe it? People are the most bearish (expect rates to rise and prices to fall) since the results began being released in 1987.
Each time that people have been this negative, a rally in long-term government bonds has ensued, sometimes a very large rally. When you get this many people leaning one way, it usually represents an important inflection point, whether in stocks or bonds.
Why rates would fall is for the economists to decide. Perhaps a slowdown in housing? A pickup in savings and corresponding slowdown in retail sales? You never really know and it is dangerous to make such predictions, but it is my experience that when the crowd leans this heavily in one direction, it usually pays to lean against them.
A royalty pain - Sanjay Somaney - 10:01 AM
Research in Motion (RIMM) investors need to know that the jury had awarded NTP a 5.7% royalty but the judge has raised it to 8.55% based on willful infringement.
The previous settlement was for just a one-time payment of $450 million and zero royalties. The size of the settlement will likely go up now and I dont think any analysts were expecting a royalty payment to NTP as high as 8.55%, which means numbers will have to be taken down from where they stand at the moment... unless the eventual settlement changes things.
I bailed on my puts into the shellacking after RIMM opened for trading following its halt... but in hindsight, should have waited.
Not good for the good guys in RIMM.
Cross-currents from the For What It's Worth Department: - Jason Roney - 9:33 AM
The SP futures open is at least +.5% from yesterday's close and it's the first day of the month: this has occurred 31 times with the close higher 74.19% by an average of 1.15%.
A couple of additions to the above query:
1) Only 4 of those 31 were in December, and surprisingly they closed lower 3 of the 4 (after an intraday high of more than 1% for each)
2) If we say that on the day before (month end) the SP futes closed below the prior day's low: there were only 9 occurrences and the close was higher in 8 of 9 with the lone exception closing down just -.06%
Flow!? What Flow? - Fil Zucchi - 9:06 AM
With regard to Scotto's take that there will be "no flows" out of real estate and into other asset classes, keep in mind that the equity in many recently acquired properties consists of the first 5%-20% of the current "over-value". Knock off 6-8% for selling costs and it won't take much before there is "no flow". . . or worse.
We might see a different story with respect to commercial real estate. There are billions upon billions of dollars currently earmarked for CarrAmerica Realty (CRE) investments, much of it in the hands of large "fast money investors". Already the Horse has noted a subtle shift away from CRE and into other asset classes. If such a trend were to accelerate, there would be a lot of cash to put to work, not to mention the leverage that it could command, and the price insensitivity with which it would be deployed. Whether that money will actually find its way in the public equity markets, as opposed to the next "asset bubble", remains to be seen.
DeVibe from DeScribe Jeff DeGraaf - MV Respect - 8:41 AM
"The S&P had its first day of distribution since this rally began in mid-October, while the NASDAQ churned. Curiously, the breadth figures were flat, with a slight (100 issue) bias downward.
Financials were the weakest component Wednesday which belies the power of the group. One of the likely reasons for the S&P being at a new high has been the performance of this group. The percentage of issues above their 200-day moving average is sending a message consistent with breadth and new high indications: failing to confirm the most recent high in the index.
One important level for us to differentiate bull from bear market will be the ability of breadth to maintain its October low. Should the breadth-line fall under that level, it will set a bear tone for the market regardless of the SPX price level."
Jeff DeGraaf of Lehman Brothers
Say what? - Kevin Depew - 8:33 AM
A look at commentary, opinion and analysis from around the world:
Michael Darda, chief economist and director of research for MKM Partners, takes an interesting look "Beyond the Bubble" in housing in today's Wall Street Journal.
Norway has hired professional philosopher Henrik Syse as the "in-house ethicist" for the government's Petroleum fund, which controls around $190 billion. First order of business? Solve the ethical dilemma of the office honor-snack box.
Weekly Scary Science Fact: Scientists are increasingly concerned about a 30% reduction in the span of just 12 years of the warm currents that carry water north from the Gulf Stream.
What It Means to You: When exploring what was once Europe next century, pack a parka.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter