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Random Thoughts


  • Did anyone notice how Disney (DIS) tried to create an interactive media experience by feeding to the best Oscar moments (broadcast on television)? That cross-media dynamic will manifest in the years ahead as the boundaries between platforms evaporates.

  • A view from down under.

  • Daisy, how could you?!?!

  • The trannies continue to act fabu (+1%) on the heels of last week's traction. TRAN 3800 (December highs) is the next resistance.

  • Note Wal-Mart (WMT) as it retests the breakdown level ($52).

  • More media commingling!

  • Is Federated (FD) doublin' down on an extended consumer?

  • A judge in Breda, Netherlands, officially ruled that a 46-year-old bank robber, who stole money worth the equivalent of U.S.$8,400, could only be charged with a crime worth about U.S.$6,100 because the court had to let the man offset the equivalent of U.S.$2,300 that he paid for his gun -- as a legitimate business expense. (Daily Telegraph)

  • "The longer the Fed fiddles while inflation embers smolder, the more likely a flare-up may be." --Tom McManus of Bank of America

  • In preparation for the Oscars, I saw both The Aviator and Sideways this weekend. Neither was as good as I thought but both were worth the price of admission.

  • While S&P 1218 is "the" resistance (as noted in my opener), S&P 1212 is "a" resistance (February double top). S&P 1200-1205 will provide the first support.

  • I still sense that the metals have "room" to the upside (not advice).

  • "Our sense is that last week's surprising recovery (at least to us) has given the markets enough firepower to break out above the double-top visible in the charts around the 10854 to 10880 area with the "carrot in front of the horse" being the beginning of month new money inflows. From there, however, we would expect some sort of pause in front of Friday's employment report, which is rumored to be strong, causing one old Wall Street wag to lament "Will this be a breakout or a fake out?!" Obviously only time will tell but as for us the only way we would consider long speculative trading positions right there would be if they are combined with married put-options to hedge downside risk." Uber-Minyan Jeff Saut of Raymond James

  • Greenspan going golfin'?

  • Please "see" the continued spike in commodity prices as the CRB tacks on another percent. While this may be indicative of further liquidity flush (which may buoy equities), it's hard to put a positive spin on this.

  • Minyan Sanjay Somaney pinged me this morning with the following follow-up vibe: "The Indian Budget is out today in India. The Budget was stellar as I had expected on Friday and investors in India drove the Indian SENSEX to all-time highs on the heels of the report. A few highlights are as follows. The revenue deficit was estimated at 2.7% of GDP and government spending for this fiscal year (ending March 2006) has been increased 21% over last year's levels. Areas that will be positively impacted, at first glance, are as follows: banking, cement, construction, IT/BPO, cellular/telco, petrochem, sugar, autos, and PSU's. In addition, corporate taxes have been lowered to a maximum of 30%, which should spur massive investment by corporates in CapEx this year. Lastly, all customs duties on IT goods imported by IT companies have been done away with completely which will more than likely serve as a further lowering of costs for these firms making the off-shoring model even more attractive going forward."

  • This interview was forwarded by my good friend (and true Minyan) Fari Hamzei.

  • Frog farmers in the village of Bo Talo, Thailand, struggling with a glut in the local market, developed an export product for those who don't require their frogs to be fresh: frog-in-a-can (which they hope will catch on as chicken and duck sales falter because of avian flu). (China Post-AP)

  • The guard, who just happened to be walking by on a routine bed check, didn't think twice as Seylan hugged the wall.

  • Could there be late day month-end hijinx? Perhaps--especially given the Biogen (BIIB) pain. But I've always found that games are more likely on quarter-end vs. month-end.

  • For all its fundamental shortcomings, a ratio that I find useful to watch is that between stocks and bonds. Pick your favorite metric for either market (S&P 500 versus 10-year Note yield, or SPY versus TLT, or Russell 2000 versus 30-year Bond yield, whatever) and compare them over time. You should find that as the ratio becomes extreme, one market or the other will reverse. My short-term look at that type of ratio hit +2.0 on Friday, which means that it is two standard deviations above the norm (very unusual). Looking at future 20-day returns in the S&P when the ratio hit extremes:+2 or greater: -0.4%, with 45% being positive, -2 or less: +2.9%, with 83% being positive. We can see that when the ratio hit a positive extreme, meaning stocks had greatly outperformed bonds, then the future return in stocks was sub-par. We are at that point now with the short-term ratio. Using a longer-term lookback, stocks are not yet out of whack with bonds." -- Jason Goepfert on this morning's Buzz

  • We flagged the Phelps Dodge (PD) chart on Friday and it continues to race higher with the CRB. Textbook technical analysis dictates that the time to buy breakouts is on the subsequent retest of the acne ($102). Not advice--just sharing the eyes.

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