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Buzz Bits: Dow, Nasdaq Creep Higher


Your daily Buzz & Banter highlights...


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

Earnings Report - MV News

  • Cisco (CSCO) reported 2Q EPS of $0.33 vs $0.31 cons on revs of $8.44 bln vs $8.28 bln cons.

Bell Buzz - Todd Harrison - 3:42 PM

  • The more things change....

  • We're seeing alotta February call buyers in Corning (GLW) ahead of earnings.

  • Does anyone else miss volatility? I used to trade for dollars, now we trade for dimes. Dollars, these days, seem to be earmarked for investors.

  • My "better" fundie guys think Cisco posts a slightly better quarter, in-line guidance and decent commentary. Heck, when's the last time you heard Chambo glum?

  • The Minyans have spoken and there will be a T-3 lag time on any 24 commentary. Mea Culpa on sharing the news of Bill Buchanan's demise (yes, I'm kidding)

  • Snaps to Professor Bennet for allowing his mistakes to serve as broader Minyan lessons.

  • Fare ye well into the bell and I'll see you on the other side of Chambo.


Anarchy in the UK - Adam Warner - 2:16 PM

Well, it's the Johnny Rotten Show tonight as Cisco (CSCO) reports. "The most important day for tech..." until the next biggie reports. Prediction: Our illustrious Chairman will speak nothing but Sunshine in the conference call and the media round tomorrow.

How 'bout them options?

Only one line is really in play, the 27.5 strike. But there's a whole lotta shakin' going on today. The Feb calls have changed hands 53,000 times (vs. open interest of 99,646) and the puts 37,000 times (vs. 83, 599).

Volatility in the Feb and March calls suggests the over/under is about a $1.50 move tonight, pretty much what CSCO always does.

As noted last week, Cisco is actually a modertately more volatile stock and option than Google (GOOG), believe it or not.

Position in GOOG

Under the Hood - Kevin Depew - 11:38 AM

  • New point and figure sell signals leading new buy signals by a slim 4 to 3 margin in the early going.
  • Overall, however, it's mare of the same: point and figure buy signals leading handily, 15 to 6.
  • Bottom line: demand is in control.
  • But what about short and intermediate indicators? Are we seeing any weakness or divergences?
  • We've discusses the High-Low Index indicators here before - an intermediate-term indicator that gives the best buy signals when reversing up and crossing above 30 and reversing down and crossing below 70.
  • The High-Low indicators for the S&P 500, NYSE and Nasdaq all remain well above 70.
  • For a while it appeared the Nasdaq High-Low would be the first to cross below 70, but it stopped just short of doing so; one of the reasons we don't want to anticipate the anticipators, as it were.

Energy Pickin' - Ryan Krueger - 8:50 AM

The temperatures drop in the Northeast and, voila, we have a natural gas rally. It's warming up down here in Houston and two equipment companies are merging – Hanover Compressor (HC) and Universal Compression (UCO).

I have owned each in the past, and UCO since the IPO at a time (Spring of 2000) when there couldn't have been a bigger yawn from my partners about buying a natural gas compression company. I think a few wanted to compress me.

Toddo made a great call at the APEX event down in Houston, and in the 'Ville with some wise words about length in energy while others were selling. Prof. Sedacca's timing was also considerably better than my own about establishing trading long. I was already over-weighted but cautioned each about a bounce being elusive 3-4 weeks ago. Looks like they nailed it.

I can share, anecdotally that I recently met with a large private natural gas exploration and production company with tremendous properties in Pennsylvania and Colorado. They are seeing a real drop-off in production from the same wells that had been more productive and more promising until very recently. Their concern speaks to one of the many reasons the equipment stocks – to improve production - look so good for, I believe, so long.

I mentioned at APEX while Todd sat next to me dreaming of wearing a cowboy hat, chewing tobacco and letting cattle roam the pasture nearby his gas wells (and none of those pesky state taxes bro!), that I thought the next private equity buyouts to surprise in size would be in the ole energy patch. If they don't, it's likely because the futures markets make them too expensive.

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