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Buzz Bits



Get In Your Mouse and Drive Away! - Todd Harrison - 2:29 PM

Alright, Hoofy, we get it--the first move was to the upside and--just like that--we're back at daddy's nemesis (S&P 1270). While the little bull on my shoulder is eyeing Citi (C) and JP Morgan (JPM) as upside pins/pulls ($50 and $40, respectively), the furry thing to my right will point to internals that simply don't support acne.

What am I doing? Watching my positions for disconnect (energy and metals for long-term entry points) and schnitzeling around some of my shorter-term stuff. For those looking to trade 'em and fade 'em, S&P 1275 offers a nice and tight short-side backstop. Not advice, as you know, just making sure you see it.

A bit slammed--lemme hop. I sincerely hope this finds you well. But before I do, please note the four-handle on the all-star guitar auction. That's what I call mojo!


position in energy, metals,

Retraction - Kevin Depew - 2:16 PM

The release of the Fed statement contains the following language change, including the removal of the word "accomodative."

"Committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance."

Here is a link to the previous statement for comparison purposes

Flashback! - Bill Meehan - 2:02 PM

This day in market history...

  • Closing levels 1 year ago:
    • DJIA: 10638.32
    • S&P 500: 1198.68
    • Naz: 2148.50
    • Crude: 41.06
    • Gold: 438.50

This day in Minyanville history...

  • In '04, Prof. McGuirk taught us what an Esky is as well as some rules of cricket when he opened A Whole New Bag of Prawns with gold at $435 and Silver was $6.78.

In other news...

  • In 1975, Foghat released "Slow Ride"...take it easy!

Chart alert! - Fil Zucchi - 1:16 PM

While I am not a fan of trading biotechs based on charts, Amylin Pharma (AMLN) key products are already on the market, so I am more inclined to read the chart as a reflection of current fundamentals rather than the company's pipeline. And the chart is looking pretty snazzy.

Caveat - this stock is a major battleground between longs and shorts. Has been since it was at $14, so be aware of the darker side of the story.

Position in AMLN

The Hedgehog - Jeff macke - 11:42 AM

At the risk of seeming like the type of guy who would blow his own horn, Best Buy (BBY) missed for pretty much all the reasons we've been discussing in this space and, um, on TV last night...

I've still got a short position in the name and am actively mulling it, as would be expected. On the one hand, it's a popular "Buy the Dip" name, as evidenced by the Street rushing (in a pusillanimous way) to defend them. On the bearish paw, I think Best Buy has wrapped a good bit of rope around their own neck by convincing the Street that stereo installation is a growth business.

The problem with convincing customers that you offer great service is that you eventually have to actually deliver on the claim. As it stands, Best Buy's Geek Squad is a bust. The initiative is exacerbating the margin pressure facing Best Buy already.

Given that BBY has started warning on a more or less regular basis I'm having a hard time pulling the trigger on covering all of the remaining short.

Position in BBY

Paging Dr. Emil Schluffhausen
Paging Dr. Emil Schluffhausen... - Todd Harrison - 10:56 AM

  • Drugs and hugs? The action and energy in pharma is stepping up and standing out.
  • Yawns R' Us? The financials are flattish despite the fright from the Brothers Lehman (LEH).
  • The Fearless Fed? We're 88 ticks away from single digit vols (as measured by the VXO). That's not an ursine causation but it certainly ain't bullish.
  • Best guess? Status quo--25 bips and verbatim text--and a test of S&P 1245 support.


position in select pharma

Eastern Sizzler - Sanjay Somaney - 10:49 AM

The Indian markets had another sizzling day with both major indices closing higher on the day, reaching new all-time highs. The Sensex closed up 130 points to 9264 and the Nifty was up 36 points at 2812. The Midcap Index closed up 41 points at 3972 and the Small Cap Index was higher by 5 points at 5853.

Capital Goods, Banking, Auto, Technology, Metals, Oil and Pharma sectors saw strong buying interest. Wipro (WIT) was in the Top 5 gainers on both the Sensex and the Nifty.

Lovaii Navlakhi, who is the Managing Director of International Money Matters Pvt. Ltd, talks about shorting at close to these levels and that might be the way to go for him. For me, I have never been able to time the market well enough to jump in and out. I have talked the India Inc. story from a long term perspective and I continue to view it that way.

I think we are in the early stages of a once-in-a-lifetime opportunity as far as India Inc goes. Will the ride be straight up? No way! Will there be some volatility? Oh yeah, a lot of it. Is the India story played out? Far from it.

Position in WIT

How bout that PFE/PPH? Will it be more than a one day wonder?? - Bennet Sedacca - 10:14 AM

As mentioned yesterday here, Pfizer (PFE) raised its dividend 26% to a 6% tax-equivalent yield. Others in the group have similar or higher yields. Of note, S & P (quite unlike its comments on General Motors (GM)) didn't think the increased div would have a financial impact on PFE's AAA rating (by the way, there are like 5 companies left with AAA ratings in the U.S.).

So maybe this is the spark that gets these dogs going? I would make the case that most of the bad news is already discounted (who doesn't know that their pipelines are drying up?) But maybe they buy pipelines, like in biotech to get those growth rates back up. At any rate, you certainly now get paid to wait. I am curiously watching to see if PPH can finally clear the 50 day moving average.

One last note, the best performing group, after the Fed's last rate hike, until they begin dropping them again are, you guessed it, big pharma. Why? I can only assume that the Fed stops raising rates because they have slowed the economy, sometimes more than they want. So areas like health care and consumer staples tend to do well.

Positions in PFE/PPH

Snoop Tony Tooooooone - MV Respect - 8:54 AM

"The strong season pattern appears to be offsetting the near-term issues (higher energy, spiking gold, correcting US Dollar, lofty sentiment)- ending up with limited movement in either direction. Part of the churn has been a run higher in recent sessions for gold and energy.

Our recent Gold profit taking call has thus far been wrong (we still wouldn't chase here as the trade higher remains too popular) and Natural Gas has made a move toward new highs (we also wouldn't chase because it is still seasonal and while it could rally further on trading momentum, any gains while potentially sharp, should be temporary).

In the very near-term, the equity market and its sectors are in "no man's land." Typically, we try to identify the "pain trade" extremes (the trade that hurts the most people, which is what the equity market tends to do) and make some kind of comment. Right now we can't, as most sectors and stocks are marking time.

We continue to remain very bullish as long as the S&P 500 operating EPS direction, 3-month to 10-year yield curve, and High Yield Corporate spreads to 10-year US Treasuries remain favorable."

Tony Dwyer, FTN Midwest Securities

Say what? - Kevin Depew - 8:37 AM

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

  • Bloomberg's Mark Gilbert says "GM, GMAC Derivatives Bet May Unravel." At the start of the year, it cost about $200,000 a year to insure $10 million of GMAC debt for five years using credit- default swaps. That soared to more than $750,000 in May.
  • The brain responds emotionally and often illogically when forced to make decisions based on little or conflicting evidence, according to a recent California Institute of Technology study.
  • The financial blog, Macroblog, points to a pay-per-view article from American Banker that notes that this will be the first year without a bank failure in the FDIC's history.
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