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Buzz Bits: Dow, Nasdaq Head Lower Again

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Editor's Note: This is a small sample of the content available on the Buzz and Banter.



Earnings Report - MV News

  • National Semiconductor (NSM) reports 2Q EPS inline of $0.27 on revs of $501.6 mln vs. $501.2 mln cons.



The Butterfly Effect - Todd Harrison - 3:44 PM

A few Minyans have asked whether the Ecuador situation "matters" (risk spreads are jamming higher on chatter that they're gonna default on their debt).

Ecuador? Agador? Spartacus?

I don't know, is the honest answer, but awareness is prudent. I remember when the Russia "didn't matter" and Rubble chatter was pure rubbish. And then it mattered. In a big, bad way.

That was the late nineties and I would offer that the interdependency of the financial markets are much higher now--and entirely more correlated--than they were then. Remember, the $370 trillion worth of derivatives isn't an evil element. They only "kick in" when a spec of dust contaminates the intricate mechanism.

Can't happen? Yeah, hit me again John Meriwether--and this time put some stank on it!

Fare ye well into the bell, Minyans, and I'll see YOU at the Red Lion tonight.

R.P.


Slow Boat to China - Kevin Depew - 1:37 PM

  • I've been using the dull market time to pore over charts and identify potential upcoming opportunities.
  • A couple of potential weekly DeMark signals jumped out:
    - Advanced Micro Devices (AMD), which recently registered a TD-Sequential buy signal on the daily chart, could register a TD-Sequential buy signal on the weekly chart this week.
    - Newmont Mining (NEM) has rallied to the lower edge of former support (which should now act as resistance) and may also register a TD-Sequential sell signal this week.
  • Speaking of gold shares, I still believe the path of least resistance near-term is lower for gold and gold stocks no matter what happens tomorrow. Why?
    1) Front month gold futures have a 9-13-9 TD-Sequential pattern, which is typically quite bearish.
    2) The HUI registered a TD-Sequential sell signal two days ago after meeting the PnF price objective.
  • The euro and the yen have registered TD-Sequential sell setups while the dollar has registered a TD-Sequential buy setup. Why would those setups not proceed to countdowns and full-fledged buy and sell signals? They could, but so far each has begun a new potential setup count in the opposite direction from oversold levels.
  • University of Pennsylvania Professor Francis X. Diebold will be speaking on "Volatility and Investing: A Fifty-Year Overview" tonight at 8 p.m. at the General Society Library, 20 W. 44th St., between 5th & 6th avenues, courtesy of Victor Niederhoffer. I intend to go and Minyans reading this are welcome to attend also.



You're running the fade, and you slant over the middle... - Ryan Krueger - 12:31 PM

When I opened my firm's playbook last week to share the first few patterns of a trade we are drawing up (step one was a Humana (HUM) long put on last week), it was met with a giant thud of silence – except a few e-mails of complete disagreement, "the charts look terrible and the business looks worse." I knew we were a step closer to the "Mother of all trades" in '07.

If our new friends in Congress do what I think they will, we'll get prices in the healthcare sector that resemble oil service stocks when crude was at $15 a barrel only a few short years ago (late 1998 – doesn't it seem longer ago?). My firm triple-weighted energy shortly thereafter and at some point we may have a similar opportunity in healthcare.

We're not there yet, but notice the cleanup at UnitedHealth (UNH), and as the headlines fade this group will go from hated to ignored. And at some point, with nobody ringing a bell, the sellers quietly finished selling.

I think this group might have already reached that point, with others in the sector to follow led one by one, by the orchestra playing on Washington Ave. waving their batons in concert – pointing at all of the problems, many of which are their only hopes at a solution they will eventually find out.

What I think becomes clearer in 2007 and beyond is that, with over 70 million customers, UNH is not part of the problem – it is part of the answer.

Position in HUM


What the market knows isn't worth knowing... - Bennet Sedacca - 10:39 AM

This is an old Wall Street adage. And one that is extremely important from an investing and trading perspective.

Prof. Succo has been talking about Central Banks buying (intervention) for a while now. At first, I doubted it. Then the 'unnatural' bid to all asset classes showed up.

I have talked with three of my best friends on the sell side over the past day or so and they are all saying the same thing. Foreign Central Banks are buying every day. And they are insensitive to price or currency as they don't have a P&L like the rest of us.

I hate to say this, but it is why it is different this time. I never thought I would say that.

I will be touching on these points in an article next week. For the moment, traditional strategies are not working. It will not last forever to be sure. But I have to admit that it is what I think is causing the performance anxiety out there.

And why the bond and stock markets are at such odds. When you have a buyer with an infinite bid and no sensitivity to loss, it makes us old guys feel...well...dumb.

But I ask this question. If everyone knows it, will that in itself end it? What the market knows isn't worth knowing applies here.


What you need to know... - Jon Doctor J Najarian - 8:20 AM

Eli Lilly (LLY) Sees High Single Digit Growth – The pharmaceutical giant said it anticipates 2007 sales growth in the high-single or low-double digits and earnings of $3.25 to $3.35 a share, excluding one-off items and assuming completion of the Icos acquisition. LLY also submitted a new drug application for its Evista product with the Food and Drug Administration.

Seminoles Buy Hard Rock For $965 Million – The tribe will get 124 Hard Rock Cafes, four Hard Rock hotels, two Hard Rock casino-hotels and the world's largest collection of rock memorabilia.

BOE Leaves Rates Unchanged - The Bank of England left its key interest rate unchanged after moving them higher twice in the past four months.

NYBOT Approves Merger with ICE – The 136-year-old exchange said its 749 members approved the $1 billion merger with the Intercontinental Exchange as the center for open-outcry commodities trading moves to combine with a purely electronic marketplace that went public just last year.

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