Buzz Bits: DOW, Nasdaq Up
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Acne vs. Dandruff - Kevin Depew - 3:55 PM
Doing its best to clean up the dandruff, the Nasdaq-100 (NDX) on a PnF basis broke a triple top (5x3) with the move above 1690 today. Meanwhile, the SPX remains below the well-watched 1300 level.
The head and shoulders pattern mentioned in Five Things... this morning remains intact, however, and the bullish percent chart for the NDX too remains negative, an indication that this acne is simply a passing phase, just like mom said it would be.
Meanwhile, in the land of stuff, real stuff, the CRB Index was off 2.5% today. Sure, energy and metals were largely responsible for the CRB weakness, but note that sugar (which I believe is used to manufacture copper tubing and Russell 2000 stocks) was down more than 5%.
Turnaround Tuesday? We shall see. Toddo is due back on the red eye after vsiting ____, potential site for MIM3.
That is all she wrote from this side of the street. As Dan Rather would say, "Courage!"
SunTrust Banks (STI) - Jon Doctor J Najarian - 3:35 PM
Last Friday, late in the session, our computers tracked speculators agressively buying March 75 calls, implying they think the news will break in the very, VERY short-term! They paid up to $0.45 on Friday for those calls, but have run the price up to $0.65 today on heavy call buying!
In the month of January, SunTrust Banks (STI) traded an average daily volume of 920 contracts. Last Thursday, February 23rd, STI traded a relatively normal 1,009 calls in total, but on Friday, 5,192 calls were purchased and our Heat Seeker, which searches for unusual buying patterns, lit up like a Christmas tree! So far today over 3,300 of the March 75s have traded and I think it's safe to say someone thinks they have a copy of tomorrow's newspaper today!
We're in touch with trading desks that say Wells Fargo (WFC) is the rumored buyer and it would be an interesting fit for them. STI is roughly a $26 billion market cap, and WFC a $107 billion number. You know what they say about smoke and fire!
Position in STI stocks and options
Corporate India Confidence Levels at 45 Month Highs On The Eve Of Union Budget - Sanjay Somaney - 2:46 PM
A new FICCI Business Confidence Survey shows corporate India confidence is at a 45 month high. Head honchos within Corporate India are looking for new triggers to drive growth faster and higher once the Budget is out tomorrow. Will the Finance Minister deliver? I think he will.
The main task ahead of the Finance Minister is to even and simplify the tax structure and provide incentives to boost infrastructure, and increase FDI/FII investment restrictions on all sectors. I think he comes through on all counts.
We shall see.
Flashback! - Bill Meehan - 2:18 PM
This day in market history...
- Closing levels 5 years ago
- DJIA: 10,636.88
- Naz: 2207.82
- S&P 500: 1257.94
- Crude: 28.26
- Gold: 267.70
This day in Minyanville history...
- Prof. Succo was Confused as Greenspan spoke to Congress
In other news...
- In 1974, People Magazine was first issued. Grocery store lines were never the same.
Drivin' and Cryin' - Jeff Macke - 1:45 PM
Greetings from NoCal where it's raining Sideways without any sense of irony. I spent the morning making my way through that rain just so I could deliver the shopping report from last weekend in the Napa Valley area:
- Ralph's in Napa: Closing. Safeway (SWY) long: Working.
- Target (TGT) stores in Napa as well as Minneapolis: Looking pretty good, actually. Nothing outstanding, by their standard, but polished gems when compared to...
- Wal-Mart (WMT), or at least the 4 different Wal-Mart's in 2 different states I visited in the last 6 days. All four stores were interchangeably grim. Either they are cultivating penicillin near their coolers to defray Health Care expense or Wal-Mart needs to spend more on maintenance.
- Microsoft (MSFT) XBox360: Unavailable and being shipped to stores "about one at a time and not very often."
Position in SWY
Ooh . . .you mean the markets are open? - Fil Zucchi - 11:43 AM
- It's thin and thinner out there, consistent with the much discussed "compression" theme.
- I can be blinded by the light of the precious metals (long term) but I can't miss the absolutely fugly dandruff in Newmont Mining (NEM). I remain convinced that the Philly Gold Index (XAU) has a date with the low 120's.
- Just as ugly is the pattern in Phelps Dodge (PD). Incidentally, Prof. Erlanger's excellent service shows that the shorts may have jumped out the window precisely at the wrong time.
- The months' supply of new homes is now up to 5.2 months, while the absolute number of new homes for sale is at (another) all-time high. Prof. Sedacca has already noted the price drop in Q4, and I'll add that homeowners in DC are experiencing tax assessment sticker shock as many neighborhoods are seeing jumps of 28%-44% in assessed values from last year. If the latter is not a sign the market has peaked I don't know what is.
Position in NEM, PD, XAU, homebuilders
Russell-ed Up - Adam Warner - 11:00 AM
I mentioned a couple of times recently the relative overpricing of IWM options vs. the price action in the index itself. A couple of weeks ago, IWM option volatility hit 20, while the index itself traded at about a 14.
Well, they are now close to equal again as the options have sold down to a near-15 volatility, virtually a 25% drop in two weeks. At this juncture I would say there is little to read into this anymore.
I speculated two weeks ago that it implied continued outperformance in the Russell as fear existed here that was not at all evident in the other indices. Well, so far, so good, as the IWM is up 3% vs. 2% in the SPY and .75% in the QQQQ. Probably a little early to crow about this one though, lol, particularly since I noted that this pattern suggested outperformance for 3 months or so.
And just like that bonds rally, what a surprise! - Bennet Sedacca - 9:39 AM
Long TIP's now up 1/2 and long bonds up 3/8. The inversion continues with the when-issued 6 month bill a full 1/4 point ABOVE 30's. And hey, in case you missed it, median home prices plunged 8.6% in the fourth quarter from $299,600 to $272,900, according to the Commerce Department. THE LARGEST ON RECORD. So those of you that think there is no bubble and it can't break might want to re-think that. (Today we get Commerce Department report on new-home sales at 10 a.m. EST).
Eventually, that makes it mighty tough to extract capital from those homes. Those who bought in that quarter with no cash, may just hand over the keys to the lender. This makes the rally in banks a little more suspicious to me. Homebuilders just keep building, just to make numbers, IMHO. That will be a finite deal too, I think. In sum, yes, rising rates hurts housing. Economics 101.
Fore! - Greg Weldon - 9:09 AM
I have been monitoring this story, which has made the rounds a few times since the 4Q data was released on Dubai gold imports.
It's all so intriguing; petro-dollars into gold, UST debt, Chinese holdings, new long-term deals
for commodity supplies inked by China with OPEC, with an intensifying centric-focus in the UAE and Dubai as the next major financial/money hub in the world.
This 'fits' with stories of rampant real-estate speculation in Dubai.
Of course, I note that Tiger Woods defeated Ernie Els at the recent EU-PGA Tour event, the Dubai Desert Classic, in sudden-death. A very exciting finish, with great camera shots of the city from the Golf Channel. An impressive looking place.
Position in gold
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