Buzz Bits: A Flatliner
An evening taste of the daily Buzz.
Limpage! - Todd Harrison - 3:27 PM
The Minx slinks towards the closing bell as traders sit and critters dwell. Today was a lesson in patience (and Advil) for yours truly as Sammy slithered across the screens. Rangey? If this was an EKG, toe tags would be the order of the day.
There's not much to add that we haven't chewed through--that's the caveat of a flatliner and part of the process. As I doubt Snapper is lurking (as a function of the internals), S&P 1270 is likely safe for the time being and will morph into Monday's business in 35 minutes.
That's not to say we're not slammed at MVHQ--we've got a snazzy new site in motion (Minyans will be jacked!) and the guitar auction to prep for. All the while, we're trying to coin a coupla shekels while offering insight to help you do the same. Some days will be easier than others but, alas, that's what life is all about.
I'm gonna flip the switch and focus on the plate in front of me before edging into our requisite two day respite. I sincerely hope you have a fantastic weekend and take the time to enjoy the ride. In 100 years, that flickering tick you're focusing on won't matter that much.
Fare ye well into the bell and may peace be with you.
Texas Tea - Adam Warner - 3:17 PM
Hearing the "Evil Empire" is pounding out some puts in the XLE; 10,000 Jan06 41's, 11,000 Jan06 44's and 19,000 Jan06 46's. The XLE has underperformed the broader oil space lately, but not sure exactly what would motivate some gorilla to sell size cheapo puts here.
position in XLE
Screensaver - Jonathan Schwartz - 2:26 PM
After a midday meeting with President Fish, I return to find the screens a bit darker than when I left. Wait, nevermind, that was just my 2001 market screensaver kicking in. Dang.
I do see Freddie Mac (FRE) standing out, however, as it sheds 1.6%. A move to 62 would break a double bottom, and suggest the multi-week counter-trend bounce from the October low is finished.
Meanwhile, there are considerably more buy signals than sell signals today as Hoofy's fans continue to stretch the rubber band to the overbought side beneath the suface. Among individual sectors, the technicals of Oil and Oil Service sector continue to improve.
Flashback! - Bill Meehan - 2:02 PM
This day in market history...
- Closing levels 6 years ago found:
- DJIA: 11,039.06
- S&P 500: 1409.04
- Naz: 3452.78
- Crude: 25.88
- Gold: 286.00
- BA: 40.13 (36.41, adjusted for dividends & splits)
This day in Minyanville history...
- Prof. Reamer emphasized that The End of the World Will Not Be Broadcast
In other news...
- In 1927, Ford unveiled its Model A. The Phaeton sold for $395 and the Tudor Sedan for $495, about as much as it costs to fill up a Suburban these days.
Hello--Is there anybody in there?
Just nod if you can hear me.
Is there anyone home? - Todd Harrison - 1:00 PM
Yes, that's somewhat of a rhetorical question as I balance sleep deprivation with minxy motivation. Under the "know thyself" rule, I'm doing a bit less today. I've got my short-term chips to my left, my long-term stack to my right and, as it stands, I'm stuck in the middle with Boo.
As Randoms (as we know them) will be tough...
- Of the four heavy Betty's we flagged yesterday, General Electric (GE), Aunt Fannie (FNM) and Wal-Mart (WMT) are all lower. Lehman (LEH) is Uncle Buck, so far, but we still have time.
- The metals are trying to base above our double secret probation ($500/$8.50) but the XAU has run into a spate of profit taking. Hey, it happens.
- I support our troops and have friends in Iraq. I just wish I had more faith in our "plan for victory."
- Why didn't Tarzan have a beard?
- Leakin' while ya sleepin'? NYSE internals have skewed 9:5 negative.
- It should never take something bad to make you realize you've got it good. Those are "just words" until you lose a loved one or drip into the abyss. Perspective and balance, I've found, are simply massive.
position in metal equities
Pulse of the Planet - Jonathan Schwartz - 1:00 PM
News, laughs and ideas beyond borders...
- Kurds make surprise announcement that they are drilling for oil in northern Iraq. Tense situation just got tenser.
- China spends $618 million to bail out state-run textile and drug conglomerate.
- French government fines cellular carriers France Telecom, Vivendi Universal and Bouygues Telecom for illegal pricing.
Not actionable data... but puts into perspective the power of Hoofy's recent run - Jason Roney - 12:13 PM
This week the Dow will have recorded the seventh consecutive higher low on the weekly chart for just the 13th time in the last 30 years. The last occurrence was Jan 2004 and the streak ended the following week in 8 of the 12.
The Nasdaq Composite is the most impressive of the weekly charts. The index has 7 higher highs and 7 higher lows and a close above 2263 today will be the 7th higher close as well.
Looking back 10 years, we've only seen this pattern once before: December 1999.
For your Info-mation - Sanjay Somaney - 11:52 AM
Infosys (INFY), India's IT giant made another new high in India closing up by 2.75% on the day, or approximately $1.65/share.
Surprisingly, if one were to look at the one-year performance on INFY, one would be very surprised to see that the shares have done very little on a 52-week basis, lagging even the Nazz using the same time frame.
INFY is up about 5% on the year versus the Nazz, which is up just around 6% on the year.
India's other IT bigwig, Wipro (WIT) is actually down 12% for the year.
I am expecting the lag to turn into a lead within the next six months.
Positions, infy, wit, qqqq
Follow Up - Scott Reamer - 11:41 AM
Want to follow up on my "Physicality" post a few days ago and use another example, this one perhaps more interesting than the DELL example I used to describe the connection between phi relationships on charts and the physiological basis for irrational decision making (per Kahneman and Tversky).
Oil futures from the August 30th peak to the absolute low achieved on September 12th was $8.16. Compare that to the subsequent decline from the absolute peak on September 21st to the absolute lows on November 18th (i.e. the next impulsive leg down): $12.87.
The two legs down are a mere $0.24 cents from a perfect phi relationship between the two. Of course, one could make the argument that the entire decline is not yet complete, but we are only comparing the two impulsive decline legs to one another; yes there may be another impulsive decline coming but that would elicit yet another attempt at a phi comparison and would do nothing to invalidate the current comparison we are making.
Why would the oil futures market prove to be "more interesting"? Because, ostensibly, it's 'controlled' right: it's a cartelized commodity that operates under the rule of what (largely) OPEC wants. Isn't it interesting (and telling) that despite this purported control, the oil market operates under the same irrational, herding, feedback mechanisms as do all other negotiated financial markets?
position in DELL
VIX, you're acting like a fifth grader! - Kevin Depew - 10:46 AM
- Is today the day the VIX and VXO both slip into single digit territory?
- You don't have to YELL, but you can if you want to as this Transport stock slips toward a potential reversal down at 46. The primary trend is negative.
- G7's up, gold's down, as you central bankers bounce to yen.
- Tantra? Or Tang? Perhaps the two are... somehow... related.
- Her name was Rio Tinto (RTP) she was a metals stock, and she had copper in her hair, and a dull and vacant stare... until she broke out today with the move above 170.
Position in YELL
Danke Schoen, darling Danke Schoen... - Todd Harrison 9:59 AM
Alrightee then--we've got six hours left in the week and I can't shake the Ferris Bueller sountrack from my crowded keppe (thanks Tom Peterson). Open offer--the first Minyan to replace Wayne Newton in the lyrical madness of my mind will earn themselves a finski!
Over in toothpick central, opening top-line, bottom barrel thoughts include:
- We're seeing some early relative stength in the drillers (breaking out) and the semis (broken out). Both were stellar fellas yesterday so the early upside probage isn't a shocka.
- NYSE breadth has improved to 3:2 negative. My breath remains skewed to the bad.
- The dollar continues to trade dryer than Pepe's sarcastic wit.
- Wait'll Otis sees the new Minyanville website (slated for release in early January). It's fantabulous.
- Gold ($500) and silver ($8.50) are sitting directly on their points of pleasure.
- Why does the sun lighten our hair, but darken our skin?
position in metal equities
The ineffectual Fed. - John Succo - 9:09 AM
The irony of it all: as a result of its own policies, the Federal Reserve is fast becoming irrelevant.
The Fed no longer controls short term interest rates, our foreign lenders do. If they get antsy about their dollar reserves, short term rates are bound to go up.
And now the Fed's once influence on credit creation is pretty much gone. The Fed regulates much of the banking industry, which used to control credit creation: the Fed could change margin requirements, thus slowing down credit creation when they are deemed dangerous.
But if you look at the historically massive credit creation of the past few years, it has largely been done without the banking system. These days banks defease most all of credit to private investors: they securitize the credit, package it, and sell it off. Much of it went to GSEs, but now most of it goes to insurance companies, mututal funds, and yes, hedge funds.
The Fed only influences these entities by cajoling.
Say what? - Kevin Depew - 8:32 AM
A look at commentary, opinion and analysis from around the world:
- Brian Wesbury writes in the Wall Street Journal of the "Pouting pundits of pessimism." Coming soon, a look at Overzealous Orators of Optimism.
- Tom Petruno of the LA Times writes that using corporate cash to pay workers is better than cow-towing to hedge funds and short-term shareholders who prefer buybacks.
- A new book blows the lid off customer "loyalty myths," writes Harvey Schachter in the Globe and Mail. It costs five times more to acquire a new customer than to retain an existing one, unless you are a mortician. Fact or fiction?
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter