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Buzz Bits: Crude and RIMM Rise on Failed Attack, No-Decision Verdict


Start your weekend with the Buzz!


Sister Act - Adam Warner- 3:48 PM

I am no charting guru, but I know a little about the VIX, so I will take a stab at Prof. Zucchi's observations earlier.

It is tough sometimes to apply normal chart rules to the Volatility Sisters as they are statistical creations subject to some quirky behavior, such as pre-weekend bashings, the inability to get below certain levels, et. al. My guess is that the VIX and VXO basically reached "floor" levels over the last year or so not much below here, and thus give the illusion of bouncing off support. Or ready to bounce off support I should say now that we have "10" handles again.

Surprise!!!! - Fil Zucchi - 3:05 PM

As I was randomly pushing buttons on my keyboards in an effort to stay awake, I came up with this monthly chart of the VIX. Perhaps the Professors who have dug into the ins and outs of volatility can explain the stark momentum divergence over the last couple of years, as well as the DMI suggesting a developing uptrend.

Flashback! - Bill Meehan - 2:20 PM

This day in market history...

  • Closing levels 7 years ago
    • DJIA: 9399.67
    • Naz: 2339.38
    • S&P 500: 1253.41
    • Crude: 12.49
    • Gold: 287.40

This day in Minyanville history...

In other news...

  • In 1868, the House of Representatives voted 11 articles of impeachment against Andrew Johnson, making him the first president to be impeached.

Mini-Minyan Mailbag - Kevin Depew - 11:55 AM

Prof. Kevin-

I need to know if my eyes deceive me but is that reverse dandruff I see sprouting on the daily chart of the Russell 2000 (RUT)? I have dipped my toe in the water and taken a position long large caps and short small caps but realize that the prevailing opinion seems to be with me, which frankly scares me.

Minyan Sam N. Dave

Dear Minyan Sam N. Dave-

If I read your question correctly, you are saying something like "Soothe Me, baby, soothe me, soothe me with your eyes." Hold on, I'm comin'.

Try as hard as I can, I do not see reverse dandruff (inverse head and shoulders bottom) on the daily RUT chart. For one thing, head and shoulders reversal patterns must have something to reverse. However, I do see a potential spread quadruple top breakout on a PnF basis with a move to 738.

As I wrote here, and not intended as specific advice, I believe the RUT outperformance versus the S&P 500 is stretched and vulnerable. That is not necessarily today's business, as that article shows, it can take several months for that ratio to break down from such an extreme. I have patience.

Position in RUT/SPX equivalents

Pretty Boy Lloyd - Vitaliy Katsenelson - 11:02 AM

Our British friend across the pond did not disappoint us today. No, I am not talking about Tony Blair. I am referring to my favorite British bank - Lloyds TSB (LYG).

Though its consumer business was weak (as expected), business banking and insurance businesses showed superb performance (at least on the surface), further dismissing any fears of a dividend cut.

Position in LYG

Go, take your critter then, by the hand
Lead him away from this foreign land - Todd Harrison - 10:39 AM

The Minx slinks through the freak as we ready to end another long week. The critters are tired, as they should be after a tetherball tussle that would make Napoleon Dynamite proud (GOSH!).

But there's no cryin' in baseball and there's no quit in the 'Ville. Hence, a few Buzz Bits:

  • The most bullish thing on my screen? The financials, as the banks and brokers hang tough (in a perverted yield curve sorta way).
  • The second most bullish thing on my screen? The CRB (+1.5%), if you believe that a rising tide lifts all asset classes.
  • The least bullish thing on my screen? Prolly the dandruff in the NDX coupled with defined risk resistance in the S&P (under 1295).
  • The most neutral thing on my screen? The breadth, which is flatter than month old soda.
  • The coolest thing I've seen on my screen? This video, which has nothing to do with finance.

Position in financials

Morning commentary from Katie Townshend, CMT, chief market technician for MKM Partners: - MV Technicals - 8:45 AM

The oversold bounce in the retail sector was short-lived. Retail sector benchmarks have been consolidating over the past week after becoming overbought quickly based on their daily stochastics. The S&P Retail Index (RLX) remains below initial resistance at the November 2005 high (RLX 473.63). The 200-day moving average (RLX 452.68) provided support during the last pullback, adding to its importance going forward. We believe a breakdown below the 200-day moving average would indicate a test of secondary support at the late 2005 lows near RLX 420.

Our cautious posture is based on long-term technical factors. For one, the most recent rally off the October 2005 lows failed to capture strong positive momentum based on the weekly MACD histogram. The inability of the RLX to get closer to the upper boundary of its long-term uptrend channel is discouraging. Additionally, relative strength versus the S&P 500 Index (SPX) has been lackluster, suggesting in-line performance at best over the intermediate-term.

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