Buzz Bits: Dow, Nasdaq Climb
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Earnings Report - MV News
- Novell (NOVL) reports 4Q EPS of $0.05 vs. $0.04 cons on revs of $245 mln vs. $251.5 mln cons.
Did he really say that?!? - Fil Zucchi - 3:20 PM
The suggestion by Bob Toll (TOL) that the Washington area housing market is "dancing on the bottom" ranks right up there with his "we will crush the shorts" comment a few days before his stock top-ticked. The EPS numbers tell the story of what's happening to housing: keep the sticker price of homes steady while offering 6-figure discounts on the back-end. Revenues are propped up, margins get whacked, EPS continue to disappear (buybacks notwithstanding), but prior buyers do not freak-out and the government stats show prices steady.
The Philly Housing Index (HGX) is now approaching the 50% retrace (240) of the drop from July 2005 to August 2006, and the homies as a whole are beginning to tempt me again.
Extraordinary Popular Delusions - Kevin Depew - 2:10 PM
- Last week we noted the bullish shakeout pattern that began in Nordstrom (JWN). The stock has reversed up in the shakeout pattern with support now at 47.60 and resistance at 50.60.
- Cisco (CSCO) has broken a quadruple top on the .25x3 chart. See the chart for free here at StockCharts.com. The breakout has revised the price objective upward to 29.75 and completes a bullish shakeout pattern that began a few weeks ago.
- However, the stock yesterday registered a DeMark TD-Sequential sell signal to go along with a TD-Sequential monthly sell signal on the monthly chart of CSCO.
- That suggests to me this "breakout" has a higher than normal probability of failing.
- Minyan Ron Sen noted this morning that there were 82% of stocks above their 40-day moving average coming in today, an extraordinarily high reading, and similar to something John Roque pointed out on Friday noting that there are a number of key elements in place supporting a potential correction.
- Newmont Mining (NEM) may register a TD-Sequential weekly sell signal this week.
- Stocks that may register a daily TD-Sequential sell signal today include: Agilent (A), Cintas (CTAS), Heinz (HNZ), Liz Claiborne (LIZ) and McDonalds (MCD).
Toll Brothers (TOL) and FWIW... - Bennet Sedacca - 8:39 AM
They continue to write off real estate which I suspect is both smart (get rid of it while you can) and silly (why did they buy in the first place?).
I think this all puts to rest, at least in my book, that housing is a cyclical business. The secular trend may be a larger population, but IMHO, the parts of the population that are growing can't afford houses, at even these rates.
I asked a friend/client of mine that is a large in builder yesterday what he thought about 2007 and 2008. And this guy is smart with 40 years of experience. He flatly stated that the 4th quarter would focus on write downs and he expected zero earnings in 2007 for the group.
So here is the deal. TOL guides to numbers last seen pre-bubble in 2003. Where was the stock then? 15. Is this a prediction? Nope. But the hopers who think they are buying trough earnings are gonna get smacked at some point. Technically they look like they could squeeze a few more shorts, but FWIW, I think they are a short once this rally fizzles.
My guess is they eventually resume the post bubble move. See that ugly chart here comparing TOL to Intel (INTC) during the tech bubble.
What you need to know... - Jon Doctor J Najarian - 8:07 AM
Jefferies (JEF) Pays Nearly $10 Million Entertainment Fine - The SEC, which began investigating the gifts scandal in 2004, said they found Jefferies traders gave nearly $2 million worth of gifts to their customers at Fidelity, the world's largest mutual fund company, over a three year period.
Phillips (PHG) To Spend $130 Million On Branding - Europe's largest consumer-electronics maker, said it'll spend $130 million on its brand next year, but announced new core-profit forecasts that were under Street estimates.
Sirius (SIRI) Cuts Subscriber Guidance – SIRI now expects 5.9 million – 6.1 million subs by the end of this year, at least 200,000 under previous guidance. SIRI cited lower than expected sales since Thanksgiving.
Sub Prime Late Pays Hit Highest Level in 10 Years – Those of us that overreached on a new home purchase are falling behind on our loan payments at the highest rate in nearly a decade. Subprime mortgage originations climbed to $625 billion in 2005 from $120 billion in 2001.
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