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Buzz Bits


An evening taste of the daily buz...


Steady as she goes... - MV News - 4:09 PM

Target (TGT) said its Dec comps are trending in-line with its current +4-5% guidance.

Up, up and away - MV News - 3:58 PM

Boeing (BA) raised its quarterly dividend by 20% to $0.30 from $0.25, payable March 3 to shareholders of record Feb 10.

Protein Pudding - Kevin Depew - 3:47 PM

  • Yet again, more net new buy signals than sell signals under the hood. The NYSE Bullish Percent has increased in value in each of the past 10 sessions.
  • The Dow Transports ETF (IYT) will break a double bottom with a move to 73, if/when.
  • Winner of the "Worst Brand Extension of 2005 award? The Harley-Davidson cake-decorating kit.
  • Gold, silver, natural gas and crude tend to get all the accolades, but today was a good day for commodities virtually across the board. Soybeans were higher, cocoa recently saw a point and figure breakout worth noting, orange juice closed near the high, cattle was up, wheat, corn and cotton were higher as well.
  • Also, note that today the CRB Index (CR/Y) moved through the trendline I showed last Friday.
  • Today's Unsolved Mystery: How the Harley-Davidson cake-decorating kit beat out Sylvester Stallone Protein Pudding to win the "Worst Brand Extension of 2005 Award." There are a lot of things I would never, ever put in my mouth; a comb, all insects, money, but right up there at the top of the list is Sly Stallone Protein Pudding.

Of Mice and Men - Todd Harrison - 3:32 PM

The Minx slinks towards the close with Hoofy winning by a nose. While the story of the session has been the downside reversal in the metals, the equity mix has been a lesson in patience. There are some standout sectors (energy anyone?) but, for the most part, we're in wait and watch mode.

While Elmer will take center stage tomorrow, my sense is that psychology will remain top duck in the metric pecking order. Whereas I had a (perceived) edge in fading the top of the recent range (1270), I unwound the meat of my bets towards the end of last week. Call me Todd-lot, call me a premature evacuator, call me too short for this much weight--just please don't call me undisciplined.

I wish I had something meatier for ye faithful but I'm not seeing it yet. As such, I'll continue to scan my eight screens until something jumps out and gets noticed. And I'll also be keeping an eye on the all-star guitar auction, which is $36,100 bid by newcomer "Indxarb".

Fare ye well into the bell.


position in metal equities

Interesting SP Quarterly Analog - Jason Roney - 2:15 PM

The SP500 currently has an outside quarter and looks likely to record a higher close (i.e. high above Q3 high and low below Q3 low with a close above the Q3 close).

Looking back 50 years, there were just 11 prior quarters with the same pattern. Each time, the SP500 closed higher the next quarter. The max high, low, and close for the next quarter is listed below.

See the table here.

And related to expiry (previously noted having a positive bias to the week):

This Friday is triple witching expiration. Of the four triple witch months (March, June, Sep, and Dec), December has the highest probability of opening higher on expiry Friday. Since the inception of futures in 1982, the SP opened higher on December expiry 83% of the time by an average +.15%.

The Consumer Is in Great Shape Financially-I hear that alot... - Bennet Sedacca - 1:47 PM

Well let me give you a news flash. Would you believe that household's Free Liquidity (non-equity assets less liabilities) was minus 3.1597 trillion dollars? The calculation is simple. Non-equity liquid assets include: checking accounts, CD's, currency, money market funds, savings accounts, corporate and foreign bonds, municipal bonds, U.S. Government securities, mortgages and Open Market Paper. That free liquidity added up to $8.239 trillion.

The liability side of the ledger equaled $11.399 trillion dollars. Hence, the deficit stated above. If you are a believer, as I am, that it takes liquidity to make a market run, it is easy to see that in 1974 and 1982 (two major bottoms in the stock market) that the net Free Liquidity was 65% of the value of the entire Wilshire 5000 Equity Index. Today, that level stands at roughly minus 25% of the index. This once again does away with the theory of all the liquidity around to run prices higher. They can always run the stops at 1270 and get a few percent out of it, but until the deficit becomes true liquidity, it seems hard to imagine a new secular bull market is at hand. The information herein was courtesy of my good friends at Ned Davis Research and the chart is available upon request.

Mini-Minyan Mailbag - John Succo - 1:43 PM


Do you have any current stats on the Implied Volatility in Gold and Silver? The ACTUAL volatility of these two metals has increased tremendously from the summer months.

In my opinion, there is a larger story to this move in Gold/Silver. Could it be a referendum on the appointment of Mr. Bernanke? But that doesn't make sense since the buying is coming from Tokyo. Or is it that real interest rates are too close to zero (Even negative now with a little inflation taking place in various metrics) in Japan (They import all their oil) and various Japanese investors have had enough and are turning in the Yen for metals?

Minyan Mark

MM -

I trade options more so on the stocks of gold and other commodities than the commodities themselves. Those have all risen as you would expect. We had been buying very cheap options there and have sold many out. We are not short volatility at these levels.

Gold and commodity prices are the elephant in the room. They speak of central bank policy of printing and debasing currency as a solution to world over-capacity and extremely high debt levels.

Investors can ignore what the price of gold is telling them at their

Position in gold

Flashback! - Bill Meehan - 1:28 PM

This day in market history...

  • Closing levels 4 years ago found:
    • DJIA: 9894.81
    • S&P 500: 1137.07
    • Naz: 2011.38
    • Crude: 18.38
    • Gold: 273.70

This day in Minyanville history...

  • In '02, Toddo tended to the Animal Farm that was the city of critters as year-end approached.

In other news...

  • In 1899, George Grant patented the golf tee. I need to live somewhere that I can play golf in December.

How long has this been going on? (How Long?) - Kevin Depew - 11:03 AM

Actually, it's been going on for quite awhile there, Ace, but all your friends with their fancy persuasions can't admit that it's part of the scene. I'm talking about the iShares Japan Index Fund (EWJ), naturally.

A Minyan, whom I have conveniently nicknamed "Ace" in order to work into this Buzz the song that has been stuck in my head all morning, asked me if this is a blow-off spike in the EWJ. It's a move higher, that's for sure, but not exactly a spike. A point and figure chart shows the EWJ last gave a sell signal in May 2004 (and even then held the bullish trendline). Meanwhile, a price count based on the December 2004 breakout yields an objective of 14.25. Not great risk/reward for new positions here, but still room to go on the upside. The first sell signal from current levels, basis the .125x3 chart, is below 12.

Seein' Stars - David Miller - 10:44 AM

Celgene's (CEGE) Revlimid is the only star at this year's American Society of Hemotology (ASH) meeting. While it might see some bump today, most of the buy side already knew this data was coming.

Hard to tell what will pique Wall Street's interest on this one, though, given a couple of people told me there were over 100 abstracts on Revlimid or Thalidomide at this meeting (we don't cover them, so I'll take their word for it).

Genzyme's (GENZ) Campath is mentioned much more often this year than last, even though the drug was first approved in 2001. Genzyme acquired the drug when it acquired ILEX Oncology about a year ago.

State of the Markets Weekly Review - Phil Erlanger - 9:49 AM

The Dow Jones Industrial Average, S&P 100 and the NASDAQ 100 indices pulled back this week. This is the first down week for the NASDAQ 100 in six weeks. The daily Squeezeometer signal for the NASDAQ 100 Index moved from buy to cash/speculative sell as of December 6. The S&P 100 Index remains in cash/speculative sell as of December 2.

Our 14-day choppiness index for the NASDAQ 100 Index moved from 45 to 65 last week. This index ranges from 0 to 100, and the lower it goes the more a trend is evolving. The S&P 100 choppiness index moved from 43 to 61. Currently, the NASDAQ 100 and the S&P 100 Index are consolidating recent gains. The NASDAQ 100 Index and S&P 100 remain above their respective weekly DMA channels.

Say what? - Kevin Depew - 8:46 AM

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

  • The Financial Times today looks at Japan's battle over tighter money. Worrisome: if Japan's debt of Y538,000bn ($4,500 billion U.S.) were stacked up in 10,000 yen bills, the pile would be 1,400 times higher than Mt Fuji.
  • AOL co-founder Steve Case, after playing a key role in bringing AOL and Time Warner together six years ago,in Sunday's Washington Post says now "it's time to take it apart." While noteworthy for its timing, Carl Icahn has been saying basically the same thing, the article basically says "blah, blah, unlock shareholder value, blah, blah, worst merger in history, blah, blah, Google, blah, blah social networking."
  • Chinese police shot and killed as many as 20 local villagers who were protesting government land seizures in Dongzhou last week. At least 42 residents are still missing. The Wall Street Journal editorial team notes that "political instability is Beijing's worst nightmare."
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