Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Buzz Bits: Dow and Nasdaq End in the Red

By

Your daily Buzz & Banter highlights...

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


Minyan Mailbag: Small Caps vs. Large Caps - Kevin Depew - 3:17 PM

Prof. Depew,

What do you make of the outperformance of the small caps vs. the large caps since Jan 9-14? Even today there's a big divergence in performance. It seems like a trend has broken: Any fundamental reason you can think of?

Thanks,
Minyan Jeff

MJ,

It's due to short covering rallies. There has actually been a longer-term shift in small caps vs. large caps which we've written about for a few months now.

It could change, but for now this looks identical to the February '07 short covering bounce that failed to reignite the five-year-plus period of outperformance for small caps.

- Prof. Depew


UltraShort Oil & Gas on the Rise - Michael Paulenoff - 2:33 PM

The DUG (UltraShort Oil & Gas, ETF), my hedge postion against a nasty but well overdue correction in the energy names and indices, is beginning to climb... Let's take a look..

After two weeks of sideways trading between 47.00 and 43.00, today's strength suggests that the DUG has completed a base-like pattern in the aftermath of its vicious correction from the 1/23 high at 54.64 to the 42.62 low on 1/30. However, completing a base is still one significant step from transcending a new upleg. The DUG must hurdle and sustain above 47.10/20 to trigger upside acceleration towards a retest of the January high.


Click to enlarge



What's Up With Gold? - Lance Lewis - 11:55 PM

Editor's note: We asked Professor Lewis his thoughts on the recent selling in gold and the growing sentiment of others building short positions in the precious metal.

The XAU/gold ratio is once again at 0.197, last seen on the Jan 23rd low in the XAU and HUI, which was the lowest this ratio has fallen to since the August low of 0.192. Many want to be a top picker but they haven't gone back in history to see how gold was overbought and stayed overbought when it broke out to all-time highs. This is what commodities do, especially after 30 year trading ranges are exceeded

Another examples is the Agricultural ETF (DBA), where many food commodities are making all-time highs. Wasn't that overbought in December and In January? It made another new all-time high yesterday.

Anybody shorting gold here is asking for trouble (just as top pickers were back in mid-January when gold also appeared to be "overbought"), and as the XAU/Gold ratio's 25 year history shows us, betting against the shares with a ratio below 0.20 has been a particularly bad bet from a purely probability-based point of view, as you can see in the chart below.


Click to enlarge


Position in gold, gold shares


Looking Forward - Adam Katz - 11:19 AM

Editor's Note: We asked Professor Katz's thoughts regarding this morning's ugly ISM Non-mfg data and where's he's putting his money.

Honestly, I am in a lot of cash. We had a very nice month in January, but I don't think the negativity is over. That said…I'm trading Sonicwall (SNWL) and Quest Software (QSFT) to the long side ahead of the numbers this week. I've been shorting gold as I expect others will have to lower their rates (with the exception of Australia) and so I expect the dollar to bounce. I'm also long some FXP which is an ultra short on the Shanghai market which was pointed out to me by fellow Minyan Gerry Vos.

I'm going to continue to wait for my pitches on the long side as I think that by and large, a mild recession is now built into the streets' numbers.

Position in SNWL, QSFT, FXP



GET THESE INSIGHTS AND MORE IN REAL-TIME. CALL 212-991-9357 FOR A 14-DAY FREE TRIAL TO THE BUZZ & BANTER OR CLICK BELOW.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE