Buzz Bits: Chairman Bernanke Sworn In
A taste of the Buzz
Earnings Report - MV News
- Disney (DIS) reported Q1 EPS of $0.35 vs $0.30 cons on revs of $8.85 bln (in-line).
- Yum! Brands (YUM) reported Q4 EPS of $).81 vs $0.78 cons on revs of $2.90 bln vs $2.97 bln cons. Period 1 same store sales were +5%, KFC comps were +8%, Taco Bell +11% and Pizza Hut (4%). The company guided '06 EPS to $2.79, including $0.13 in options expense, vs $2.88 cons.
State of The Markets For The Current Week - Phil Erlanger - 3:36 PM
The Dow Jones Industrial Average, S&P 100 and the NASDAQ 100 reversed course after last week's positive finish to close lower across the board. The daily Squeezeometer signal for the NASDAQ 100 Index moved from cash/speculative sell to sell/sell short on February 3rd. The S&P 100 Index daily Squeezeometer remains in sell/sell short.
Our 14-day choppiness index for the NASDAQ 100 Index moved from 47 to 51 over the past week. This index ranges from 0 to 100, and the lower it goes the more a trend is evolving. We are now in a choppy period. The S&P 100 choppiness index moved from 46 to 58. The NASDAQ 100 Index and the S&P 100 moved below their respective DMA channels.
Where are you going now my love
Where will you be tomorrow? - Todd Harrison - 3:24 PM
The Minx slinks towards the close with the critters running nose to nose. While the broader movement has been muted, the motion in select sectors is the story du jour. Energy and metals are swelling anew, adding flava to the Matador City mantra that they're the new age winnas. Over in Red Dye, the homies, retail and pharma are today's source of funds.
As I shake off the jet lag (Visine anyone?), my red eyes are watching our aforementioned levels for fresh clues. Nada much on that front, for now, and I'm content to do more watching than trading as we edge towards Turnaround Tuesday.
I'm still hanging with Bruce Banner (read: long gamma) and I'll carry that torch overnight. I'll only ask that you don't make me mad. You wouldn't like it when I'm mad. But if Sammy keeps on ruling the roost, I may have no choice.
As always, I hope this finds you well.
Say What? - Kevin Depew - 3:08 PM
A look at opinion, analysis and commentary from around the world:
- US Attorney General Alberto Gonzales defends the government's spying program in today's Wall Street Journal. "Americans Expect Surveillance," he writes. And his job is to make sure they are not disappointed.
- The Asia Times asks "Why can't Muslins take a joke?" Despite the glib headline, the article itself actually discusses serious demographic issue sin the Muslim world and contains a number of interesting charts looking at literacy rates, secularism, and population growth.
Flashback! - Bill Meehan - 2:59 PM
This day in market history...
- Closing levels 4 years ago
o DJIA: 9653.39
o S&P 500: 1083.51
o Naz: 1812.71
o Crude: 19.77
o Gold: 297.20
o AAPL: 24.67 ($12.34 adjusted for splits & dividend)
This day in Minyanville history...
- In '03, Toddo gathered around the breakfast table with the Critters in Hang on to Your Hat.
In other news...
- In 1985, Microsoft announced it would develop a word processing program for the IBM PC - Word.
Could the new 30 year be a 'special' case? - Bennet Sedacca - 1:51 PM
Much talk today and Friday circles around the when-issued 30 year now trading at sub 4.5% and the lowest yield on the entire curve. A rumor going around that makes some sense revolves around the potential for the new bond to go 'on special.' Specifically, 'on special' is a term used in the repo market "when a firm is willing to lend money overnight at rates below those on general collateral in exchange for the securities because the issues are in demand to satisfy borrowing needs." Thank you Bloomberg for the definition.
Basically, it is just like a short squeeze in stocks. Considering the COT data showing their huge long position, maybe that is why they are long?? Not advice, but most certainly intriguing to me. It has all sorts of implications, including rates on long term corporates, munis and anything priced relative the new long bond.
Positions in various Treasury securities.
Apple Turnover - Adam Warner - 11:03 AM
Will Robinson! With Apple (AAPL) now sporting a 6-handle for the first time in two months, a bona fide option frenzy has ensued. No particular preference for calls or puts, but volatility in the near month has hit 10-month highs at 50 or so.
Couple this with the Google (GOOG) shake and break and you can really see why the VXN will continue to hold strong here.
position in GOOG
Same old, same old - Fil Zucchi - 10:44 AM
The Minx continues to hang where it left off on Friday, that is in the 1260-1270 no-man's land. But there is some noteworthy motion. Dell (DELL) March 27.50 puts have traded 3,000 contracts on the ask, against open interest of about 10,000. DELL reports on Feb. 16. I've been eyeing pairing it against my Intel (INTC) long. My thinking (still somewhat confused, but no more so than usual) is that INTC down here discounts the bad news from the PC market, but not the potential good news from the communication market. DELL on the other hand discounts no bad news, and certainly not their ever lousier service.
Meanwhile, this morning Mr. Jobs finds himself staring at the first bona-fide lousy technical pattern on Apple's (AAPL) chart in quite some time: namely the falling off of some pretty clear-cut dandruff. That's notwithstanding my daughter's $50 iTunes shopping spree over the weekend.
Back to watching paint dry.
Positions in INTC, AAPL
Snaps - John Succo - 10:20 AM
Bennet Sedacca has been doing a great job describing the yield curve - how really large players with patience and capital are positioned. Does anyone think Buffet is going to get "scared" out of his position because TV is saying he is wrong?
The 2-10 curve is finding a new level of inversion this morning, dipping to a negative by almost 8 basis points. This does not yet compare to where it really can go (100-200 basis points) if things continue on their path of destruction (deficits, debt, over-capacity).
There is a lot of hype out there, more than I have ever seen. You can listen to it if you want; there is great pressure to do so. Every economist is trying to explain away the deficits, every pundit talks about upside but not the downside. Use common sense. Many on Wall Street have a vested interest in urging you to take more risk. But it's your money (well, the Fed doesn't think so, but at least you can slow them down) and no one is going to look out for you.
DeVibe from DeScribe - MV Respect - 9:50 AM
"Breakdowns, as a percentage of total breakouts, have begun to creep higher, with the numbers over the last week essentially even. What is astounding to us is the fact that less than 50% of all S&P issues are above their own 50-day moving average. Even as the market expanded to recent highs, that percentage continued to deteriorate, suggesting a weakening internal picture.
The percentage of issues at a 20-day high also failed to keep pace with external price data, making the internal weakness more pronounced. Interestingly, the Commitment of Traders' data suggests that the latest weakness is not finding support from commercial hedgers as their net short positions persist into weakness."
Lehman's talented technician Jeff DeGraaf
Minyanville morning commentary from Rod David, of AvidTrader.com: - MV Trading - 8:40 AM
"S&Ps greet this week's open at a critical price point, having fallen back from last week's high to the prior week's pivotal low (the low prior to the actual low). The prior week had held a Double Bottom upon retesting the prior Friday's three-year record for a single-session drop. The drop had stopped at the second target of the decline that was created by the January 9-13 topping pattern that developed at the New Year's rally peak; the interim low had stopped at the decline's first target. Anyway, last week ended with a drop into Friday morning's low that touched the prior week's pivotal low, retesting the decline's second target.
None of which should have happened if the prior week's decline had been only a correction that would resolve in new highs. Instead, the bounce into last week's high was the correction. So, by definition new lows are expected - not just within the context of retesting the prior lows, but a new downleg to lower targets.
What can save the market? A gap up above Friday's highs would be a good start. Another recovery above December's prior highs 10-12 points higher would confirm, but new highs
must follow without delay, and preferably within the context of price surging exponentially higher."
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