The Mother Chip has landed - MV News - 4:18 PM
Intel (INTC) guided Q4 revs to $10.4-10.6 bln vs $10.2-10.8 bln prior and $10.6 bln cons. Gross margin is guided to 63% +/- 1pt vs 63% +/- 2pts prior.
INTC is trading lower in initial reaction.
Old Man take a look at my Buzz
It's a lot like you were - Todd Harrison - 3:46 PM
- There are two sides to every trade. Boo will offer that we failed miserably at S&P 1270 and trapped the year-end hopers. Hoofy will vibe that this is a healthy retest of S&P 1245 that is shaking out the weak hands.
- When in doubt, sit it out...or trade "in between." (which explains my partial strippage earlier). I've still got one leg in the fur (25% conviction on short side) but, truth be told, I can see both sides.
- The Minyanwood Reporter?
Please note how the semis held SOX 485 (in front of the Mother Chip).
- It's days like this that I don't miss trading the homies.
With regard to the all-star guitar auction (and because alotta folks are asking), the winning bidder will receive a receipt for the tax deductible portion of the bid in the amount that exceeds the fair market value of the guitar. So, in other words, all but (roughly $800) is tax deductable!
Fun facts to giggle at - Jason Roney - 3:31 PM
Nasdaq is expected to announce the changes to the Nasdaq 100 tomorrow, which will become effective December 16 after the close.
Obviously Google (GOOG) is an expected addition. Anyway, I was joking with a guy here that GOOG just opens higher every day. So I looked. GOOG hasn't opened down more than a point since Nov. 15 and has only opened down more than a point 5 times out of the last 60 days.
All useless knowledge, but that's impressive.
Look at me, I'm A....
(I've been docked two D's) - Todd Harrison - 3:03 PM
- Premature evacuation on that furry appendage? Perhaps, but 20 handles in two days--coupled with S&P 1245 support--forced my hand, er, paw. I would actually love a soft close to that level so I can dance naked at Starker's Bass shindig tonight (metaphorically speaking of course).
- Regardless of what happens in the next few weeks, I still think tech and financials are over-owned (while energy and metals) are under-owned. Think about all the overhead supply (purchased into the bubble) that's still held for sale.
- Damn, I forgot to eat lunch again. I must be busy!
- Note to self: the next time you're underwhelmed with an extended semi that is up two percent pre-open, unleash the hounds (or at least a puppy).
There aren't alotta folks who can penny Succo!
The VXO is up 5%--and still not a teen!
If you haven't read Tuttle's Afternoon Jo....Drink up Johnny!
position in metals/energy.
Slim Jim - Kevin Depew - 1:47 PM
A Minyan asked me to look at a long-term chart of ConAgra (CAG). On a point and figure basis, the stock is right now testing trendline support from the March 2003 lows. A move to 20 would violate this trendline. The stock is already on a sell signal that was generated at 25 back in June.
Speaking of CAG, do you know how many Slim Jims are manufactured each year? 533 million. That's enough to circle the earth 2.7 times, the company says.
I'm not sure why CAG would want to circle the earth 2.7 times with Slim Jims, it sounds dangerous, but they are the ones who brought it up. Maybe that is why their stock is down as word of their plan has leaked out. Just speculating here.
Bio-dome - David Miller - 1:47 PM
Deal flow in the biotech space is picking up. The latest example is AstraZeneca's (AAZN) with Protherics (PTIL) for CytoFab, an anti-sepsis infection therapy. CytoFab is about to enter Phase III trials.
The deal calls for GBP$171M in milestones, all of which are approval milestones. There is GBP$16.1M in cash plus a GBP$7.5M equity investment priced at a 25% premium to the midpoint of the 30-day moving average.
PTIL is trading up about 70% today on the news.
Flashback! - Bill Meehan - 1:26 PM
This day in market history...
- Closing levels 7 years ago today:
- DJIA: 9027.98
- S&P 500: 1181.38
- Naz: 2034.75
- Crude: 11.33
- Gold: 294.40
This day in Minyanville history...
- In '03, Prof. Reynolds wrote of his thoughts on Treasuries and the Friday Tremor that occurred prior to a snowy weekend.
In other news...
25 years ago in 1980, John Lennon was killed outside his NYC apartment
In 1939, mindful of his illness, baseball writers waived the five-year rule and voted Lou Gehrig into the Hall of Fame by acclamation. Gehrig suffered from ALS, a disease that still has no cure. Join Minyan Ryan in his quest to raise money for the ALS Center at UCSF.
Hey brother, can you spare a dime, or a hundred billion or so? - Bennet Sedacca - 12:56 PM
Recently released data from the mutual fund complex reveals that cash as a percentage of assets in equity funds has fallen to a near record low 3.9%. Incidentally, that is the approximate level of cash prior to the declines in 1973 and 2000. It does after all; take some fuel to drive a market higher. Any kind of market.
I am totally aware that it may be 'different this time' due to foreign buying and the proliferation of ETF's and index funds, but I have never made much money using the 'it's different this time' concept.
My concern is that if the market actually turned to a cyclical bear from a cyclical bull, retail investors would not be very patient before selling shares-particularly with their near record low commitment to bonds and love affair with real estate. And if they sold en masse, the funds would have to liquidate to meet the need for cash. This is precisely what happened at the July 2002 low, for those that don't remember that nasty period. Again, not advice, but food for thought.
The Pharma King - David Miller - 11:41 AM
Anyone interested in King Pharma (KG), lupus drugs, rheumatoid arthritis drugs, and/or long-term sales potentials for Rituxan and Velcade should take time to listen to the R&D Day webcast for ZymoGenetics (ZGEN).
Zymo's rhThrombin will erase KG's sales of Thrombin-JMI ($250M in 2005) starting in 2007. Zymo's TACI-ig will be a factor in all the others I mentioned later in the decade as this Phase I program matures.
Accidents happen - Scott Reamer - 11:15 AM
The Nikkei is three standard deviations away from its 50-week moving average: this also happened in 1989 and 2000. the amount of stocks held on margin almost near the 1989 high in NKY.
The BKX index is also almost three standard deviations from its 50-week moving average. The last time it came close to this was April 17, 1998... three months before the 1998 collapse
Given the liquidity - real liquidity - stuff we have been cataloguing and the fact that inversion in the Greenspan era has almost always led to some sort of financial "accident" (a la 1998), the expectation for the same I think is not only reasonable, but probable.
Homies bites . . .uhm bits - Fil Zucchi - 11:05 AM
Toll Bros. (TOL) growth projections over the last 9 months have gone from more than 20%, to under 20% (but only because they grew so fast before), to 0-10% (again because of their success - whatever that means).
My "feet on the DC streets" - who saw the turn in the Washington market about as accurately as you can pinpoint it, says that a number of newly minted real estate investors are being spotted meandering around carrying very large bags - some containing "raw land," after older homes were bought at full market prices and torn down for spec McMansions flips.
Prices are not going down says Mr. Toll. They are just selling more houses for the same price.
Mr. Toll also says that the investors are now completely out of the market. If he is right, we'll see who's left.
And again Mr. Toll states that the market is returning to what he saw between 1994 and 2003. How convenient to omit 1992-1994 when prices in the swankiest areas of Washington fell a cool 20%.
Positions in TOL BZH
PTI, FYI - Sanjay Somaney - 10:07 AM
Patni Computer Systems (PTI) priced last night at $20.34/share. The offering consists of 5.125 million primary ADS, 1.75 million secondary ADS and up to an additional 1.03125 primary ADS to cover over-allotments.
Underwriters are Goldman Sachs, Merrill Lynch, ABN Amro Rothschild, Jeffries and Macquarie Bank Ltd.
Patni provides Information Technology services and business solutions. The company has over 10,000 employees in 24 offices across the U.S., Canada, South America, Europe and Asia-Pacific. The company has off-shore development centers in 8 of India's most IT-centric cities. General Electric (GE) is Patni's biggest client worldwide.
Shares of Patni in India are close to their 52-week high and have rallied about 56% this year from their 52-week low. Revenues for the most recent quarter ended September 30, 2005 (US GAAP) were $118.3 million, up 44% YOY and up 9% QOQ. Net Income was up 10% YOY and 13% QOQ. EPS for the September quarter were $0.13 per share, up a penny YOY and two cents QOQ.
Patni will be the fifth IT/ADR to trade on our exchanges and I expect a lot more as we move forward.
Position in PTI
MV Respect - 9:35 AM
Good morning. The daily stochastics are falling from overbought extremes for the SPX and other major indices, making the path of least resistance lower over the short-term.
HMO stocks are due for a correction; Health Net (HNT) and Sierra Health (SIE) have flashed trend exhaustion signals, and Coventry (CVH) and Humana (HUM) have stalled near resistance. Newspaper stocks may be surprise outperformers over the short-term (Gannett (GCI), Tribune (TRB), New York Times (NYT), Dow Jones (DJ)).
The retail sector has lost relative strength as it churns sideways. We believe the recent rally in furniture stocks was a counter-trend move, and reiterate our cautious stance on La-Z-Boy (LZB), Ethan Allen Interiors (ETH), and Furniture Brands International (FBN).
Katie Townshend, Chief Market Technician at MKM Partners
Say What? - Kevin Depew - 8:45 AM
A look at commentary, opinion and analysis from around the world:
Arthur Brooks writes in the Wall Street Journal that economists have discovered that "people with a lot of money tend to express a higher subjective happiness than people with very little." Needless to say, right now I am very, very unhappy about this.
Asia Times Online says India has revived a plan for an oil and gas grid for the Asian continent; an interesting piece on the global chess match taking place right under our noses for energy sources and supplies.
Recently, I thought to myself, what the world really needs is hotdog flavored cheese spread. However, when I expressed my desire for hotdog flavored cheese spread to a grocery clerk, I was forcibly removed from the store by security. Yet, somehow, Kraft has heard my desperate plea.
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