An evening taste of the daily buzz.
'Scuse me, While I Kiss the Sky! - Todd Harrison - 2:38 PM
The Minx slinks to session highs as Hoofy tries to kiss the sky. We sensed some upside jiggle during the fishfest and stepped out of the fur (son) to avoid any unnecessary afternoon angst. Why didn't we do the Texas two-step and ride the tide? S&P 1270, for one, and quite possibly because I've got a case of the Fridays.
A quick trip around the minxy ship finds strong semis (impressive in the face of the Mother Chip), firm financials, strong breadth and sloppy (and sloppier) metals. I'm a long-term player in these names but if you put a gun to my head, I would say that the short-term direction runs straight through Red Dye.
A week that started with white light to Dorothy is ending with a snazzy showing by the all-star guitar. You know what would really make my day? A three handle into the weekend (we're $1400 away). I still sense upside for our philanthropic splash but perhaps it's next week's business.
Hope you're all having a fine day.
position in metal equities.
The option quarterback... - Vitaliy Katsenelson - 2:12 PM
Symantec (SYMC) looks somewhat alluring on the surface: it is trading at 18 times next year's earnings. It looks even more appealing if you factor in a $4 billion cash pile, which accounts roughly for 20% of the company's market capitalization.
However, a look at company stock options expense kills the appetite for the stock, as stock options wipe out 20% of the earnings. Though the company has lowered stock options issuance, curbing it down 2%, the stock options that were issued awhile back are coming to haunt the company as they have a ten year exercise period.
Oh did I mention Microsoft (MSFT) is wanting to wet its beak in the security software market?
Flashback! - Bill Meehan - 1:58 PM
This day in market history...
- Closing levels 2 years ago today found:
- DJIA: 9923.42
- S&P 500: 1060.18
- Naz: 1908.32
- Crude: 31.72
- Gold: 407.60
This day in Minyanville history...
- In '03, Mr. Practical swung through the 'Ville saying he was Not Buying It, with regards to the market and volatility.
In other news...
- In 1793, The American Minerva, the first daily newspaper in NYC was published for the first time.
Lost - Kevin Depew - 1:24 PM
New buy signals continue to expand over new sell signals as we move past what for some people is the lunch hour, but which for MVHQ is the lost lunch hour.
Sectors that are positive internally today include Biotech (continuing the slow but steady technical improvement we've been seeing the past couple of weeks), Healthcare and, perhaps most surprisingly, Oil. Meanwhile, on the downside, Retail and Foods/Beverages are showing poor internal action.
Speaking of lunch, I vote for Lucious to cancel the lost order and instead scare up a heaping helping of Ketchup Hamburger-flavored Corn Snacks from Frito Lay.
Pick One and Go With It! - John Succo - 11:21 AM
Bonds are up a point one day and then down a point the next.
Very unusual action.
Bonds have recently been more volatile than stocks. I think this signals the market's complete confusion as to central bank flatulent monetary policy.
They have "fixed" things enough, or tried. Printing money is not a solution, it is a band-aid. A band-aid that hides a festering infection beneath.
There will be a time when markets just say enough! It is time for us to heal ourselves. This means a debt correction.
Gold & Silver vibes from Tom Peterson of Bulls Eye Research: - MV Respect - 11:09 AM
Gold has reached our $525 target. Coincidentally, Gold and Silver are also generating "upside exhaustion" readings now. [Copper also has a weekly signal, as we noted a few days ago.]
There have only been six daily gold "upside exhaustion" readings in the past 21 years: July of 1992, November 1989, September 1986, January 18 1980 (when gold was $835!), December 1979, February 1974. So it has been a good signal.
The previous high before the breakout was $482.20 from October 12th on the Dec. futures contract, so that will define near-term risk for now.
Position in gold, silver
Ask again later - Kevin Depew - 10:45 AM
It's early but so far, once again, despite the red in the major indices (with the exception of the S&P 500 Equal-weight Index, which is positive), new buy signals are trumping new sell signals, the BKX remains positive, Google (GOOG) is up on the day, and the SOX has flipped the switch to green.
So far, the XLK (Technology SPDR ETF) is underperforming the XLP (Consumer Staples) by just a hair. The day might get a bit more interesting if that relationship changes.
What's your name?
Who's your daddy?
Does he Buzz like me? - Todd Harrison - 10:20 AM
The opening fray is a two-side sway as the critters debate which way they will play. While I slipped out of some fur yesterday (near 1250), I've still got some downside game on. I've been noodlin' my McRisk all morning and here are my thoughts.
The early lift in the S&P brought us right to the downtrend line from Tuesday's high. If I want to tighten up my risk profile, I could lower my stop to above S&P 1260 and trade with a "credit." I'm intrigued by this approach as I sense S&P 1245 will hold the first time. I know it's a bit granular but it's an option---and options are good.
So be it--with the financials sticky, the semis holding firm and an ability to lock in an advantageous risk/reward, I'm rollin' my stop to that level and will keep my downside ducks if we continue on our southbound train. It's not for everyone, I know, but I'm hopeful that by sharing my process, it might add value to yours.
As always, I hope this finds you well.
India Update - Sanjay Somaney - 10:16 AM
As Lovaii points out in his Live From India diary, Indian markets zipped higher closing at all-time highs on both the Sensex and the Nifty. The former closed higher by 161 points and the Nifty was up 50 points to end the day.
Top gainers of interest to us in the USA were Mahanagar Telephone Nigam (MTE) (MTNL in India) which closed higher by 6.9%, Videsh Sanchar Nigam (VSL) (VSNL in India) which was up 5.5%, Tata Motors (TTM) which closed up 2%, Infosys Technologies (INFY) was up 2%, Satyam Computer Services (SAY) gained 1.4% and Wipro (WIT) edged up 1.4%.
In other news, Hitachi increased its stake in a joint venture with Telcon Construction Equipment (controlled by TTM) to 40% from 20%. Financial terms were not disclosed as yet. However, yet another global giant beefing up its Indian presence.
Position mte, vsl, vsnl, mtnl, tcs, infy, infy calls, wit, say
It's not the 'what?' it's the 'why?' - John Succo - 8:45 AM
For those of you drinking coffee and trying to figure out what the markets are telling us this morning, good luck.
I have said for a while that to these old trader's eyes the markets are not acting naturally.
Stocks trade up much faster than they trade down, the opposite of what I am used to. Rallies are futures led. This means stockpickers are not driving the market, inflows are. Those futures buyers are curiously not price sensitive and in fact prefer to pay higher prices rather than lower. This is illustrated in the tick data, most of which is surreal.
Gold is up every day. This is not as the apologists say due to jewelry being bought. This is due to every central bank printing money in an attempt to drive nominal asset prices ever higher.
And the constant lamenting on TV about "when will the Fed ease again?" With real interest rates at zero and the bulls crowing about a strong economy, people are so hooked on free money that they want it cheaper? What?
Never has the Fed eased at this point in the cycle.
And futures bid up after Intel (INTC) warns, Merck (MRK) blows-up, FedEx (FDX) and IBM downgraded? Why would a portfolio manager bid up futures on the back of such news. Why not just wait?
Gap (GPS) is out saying their store traffic is down and they have pretty much given up on good holiday sales. But the TV pundits have not given up on talking about good sales.
I urge all not to listen to "what" they are hearing and try to find out "why".
Position in GPS, IBM, MRK
Say what? - Kevin Depew - 8:35 AM
A look at commentary, opinion and analysis from around the world:
Bloomberg's Joe Mysak says the biggest public finance stories of 2006 will be "What happens after the bond sale."
So, recently the Wall Street Journal told us future Fed Chairman Ben Bernanke is a huge Great Depression buff. Judging from his singular, overriding theme to "beware of the gold standard," apparently he hasn't read everything that has been written about the Great Depression... especially not this.
Finally, good news. Really, really, really, good news.
There is an interesting article in the Nikkei Shimbun today. - John Succo - 8:24 AM
It said that the BoJ was getting concerned about the scale of individuals borrowing in yen (lower interest rates) to buy dollars (higher interest rates), the carry trade that is taking place in massive size in yen. It said that this was behind the Yen weakness to the dollar. It also said they are taking on too much risk and this is why the BoJ will end the quantitative easing.
It's interesting that they finally are linking the two together (or at least admitting the linkage), and I would say that this is effectively an indication by the BoJ that they are becoming concerned about the repercussions of the yen's continued decline (more and more debt).
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