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Buzz Bits: Dow and Nasdaq End Higher


Your daily Buzz & Banter highlights...


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

Answers I Really Wanna Know... - Todd Harrison - 2:15 PM

  • Who makes the decision whether someone is important enough to be considered an assassination versus mere murder?

  • Does anyone really think that today's rally has anything to do with the signing of the stimulus package?

  • Do you see the internals begrudgingly and barely positive?

  • If you were the internals, wouldn't you be grudging too?

  • Is defined risk and the 50% retracement reason enough for the Blackstone (BX) schnitzel?

  • Do you see the semicaps since we spied them out of the gate?

  • Will any bailout package be dilutive to Ambac (ABK) and MBIA (MBI) equity?

  • By the way, do you see the 5% plus drops in those two names today?

  • What disease did cured ham actually have?

  • What, prey tell, should I write about for this week's syndicated vibe?

  • Why does a round pizza come in a square box?

  • If the financials can't find a bid during this attempted rally, are they gonna lead the speed lower?

  • Will the market burn out of fade away?


Position in BX

Homebuilding ETF Holds Support - Michael Paulenoff - 1:36 PM

The Homebuilders Select SPDR (XHB) managed to hold support in the 19.70 area again, creating a minor double-low" with Friday afternoon, and setting up a potentially strong upside acceleration if the price structure hurdles 20.85-.90 later this afternoon.

My technical work argues in favor of such a constructive move, which projects the XHB to climb towards a test of its prior rally peak at 23.60 from 2/01. Only a decline that breaks and sustains beneath 19.70 will neutralize my current outlook.

Click to enlarge

Is the SOX the key? - Sean Udall - 1:26 PM

I pointed out the daily, weekly and monthly charts on the SOX a couple weeks ago – showing that we were testing the monthly long term support line as well as what could be evidence of extreme price action to the downside. Further the SOX led Tech and the market lower starting in November. Now it looks like the SOX has tried to retest its lows and could be pointing to a bumpy ride higher off what looks like bullish candlestick patterns, and divergences (RSI, Macd & ADX) off the daily chart.

Click to enlarge

In the blended view, we can see more divergent technical patterns in the daily chart and a couple spinning tops and doji's are very clear. Also the weekly chart really shows that "shock and maw" low hit two of the past 3 weeks. The P&F configuration is still pointing to a bearish price target but these P&F charts practice a lot of revisionist history. So it will not print a bullish target number until probably 380 or even 400 on the chart. However, the P&F still shows signs of reversing and holding lows with 4 X's now carved out.

Click to enlarge

With respect to many SOX participants; Price-to-earnings multiples remain low, especially relative to interest rates. Moreover, the Intel's (INTC), Texas Instrument's (TXN), Broadcom's (BRCM) and others were not huge winners during last year's tech melt up. This melt up is minor as well and essentially non-existent if Google (GOOG), Baidu (BIDU), Apple (AAPL), Research in Motion (RIMM) and the solars were removed.

In summary, there is a tremendous amount of long-term value in the semi's currently – possibly some shorter term value as well. Just remember that any day the monolines are burning up the presses we could have large rallies or sell-off's in the SOX which will have very little fundamental impact on them.

Position in BRCM, GOOG, AAPL

Europe on Watch - Minyan Peter - 11:22 AM

Editor's note: Minyan Peter provided us with his thoughts regarding comments made by Bank of Italy Governor Mario Draghi that the next 10 days to two weeks will be crucial because the financial institutions in Europe will have their first audited accounts. The comments were published in this morning's FT.

I agree with Mr. Draghi. While not taking anything away from the quarterly financial statement process, the rubber really meets the road with the annual audit. This morning's "material weakness" from AIG on its credit default swap process is the first of what I expect to be several major accounting announcements that come from this year's audit process.

In general, I think that people would be surprised by how many "management estimates" are used to prepare the financial statements for a major financial services firm. In light of all of the market issues, I expect that many of these management estimates will be reviewed closely by outside audit firms as part of this year's closing process.


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No positions in stocks mentioned.

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