Buzz Bits: Dow and Nasdaq End Mixed
Your daily Buzz & Banter highlights...
Uncle Shmuck! - Todd Harrison - 3:04 PM
So here's a twist--the systems at MVHQ are up and running but MY systems--just mine--continue to crash. I didn't know this until I tried to post further vibage which, of course, wasn't saved. I'll tell ya, Chloe has nothing on the pained expression on my puss. Some tag ends thoughts as I watch thy clock.
- Chatter abounds that the Google (GOOG) phone will be unveiled this weekend in Spain. I care about this as a function of my snivlet of Apple (AAPL) calls but wonder if the specter of increased competition was partly responsible for the 40% haircut from the highs.
- I was speaking with a trader and asked him how his day was. "Great," he said, "We're really long gold." We got to talking and I mentioned my inclination that the dollar could see a contra-trend rally. "I'm not worried," he said, "There's very little downside risk and I'll buy any dip."
- This isn't a comment on gold as much as an observation on trading: If you've got the pockets and patience, gorgeous. If you're a trader--as this dude was--be very careful balancing discipline vs. conviction.
- Sigh and sigher, my 3 pm just walked in as I try to play ketchup on the content. Some days your gonna be the windshield, other days you're gonna be the bug. I'm squarely in the gnat camp today and it has nothing to do with P&L. Lemme hop and focus on the important stuff. Fare ye well into the bell, Minyans, and have a mindful weekend.
At the Crossroads, Crossroads... - Quint Tatro - 2:31 PM
Are we at a crossroad or what? Well, let me ask you another way. Where's your anxiety level? I am trading with peanuts here keeping a good amount of dry powder well, dry, but feel as if I have my entire line out there. I interpret that a few ways:
1) I need to continue to play very small
2) I need to take a step back and analyze the bigger picture, no reason at all to watch every tick
3) I probably need to start drinking decaf
4) We're close to a big move in one direction or the other
If my anxiety level is high, I suspect others are the same. The S&P is notching a 4% loss on the week, we've run up and down over 1% intraday more times than I can count, and I had to take shelter for a darn tornado. Holy cow, what a week!
I am hanging with some Q's but so far they're more of a nuisance than anything. My stop is at yesterday's low and despite the most recent plunge, the stop wasn't hit.
If you can identify with anything that I am relaying here, I suggest we all take a step back and keep with our wait and see mentality. No one ever got hurt waiting things out.
Position in QQQQ
FCX Setting Up? - Lance Lewis - 12:26 PM
Is this reverse dandruff setting up on Freeport McMoRan (FCX) on a two month chart? If so, where does it project to?
I don't really see that on the chart myself, but then again I've always felt charts are a lot like cloud watching (ie- one can see whatever one is looking for). FCX is primarily a copper producer and not a gold producer (which I am more positive on). The market tends to trade it that way too, which is why its chart looks more like an Rio Tinto (RTP) or BHP Billiton (BHP) rather than Barrick Gold Corp (ABX) or Goldcorp (GG).
I am not as positive on FCX as I am the golds. Copper is GDP sensitive, and while I believe rising inflation will keep base metals prices "elevated", reduced demand is likely to cap prices within the 2-year trading range that copper and other base metals prices have been in.
Thus, unless FCX can dramatically grow production, I'm not sure it's is all that attractive. it will probably see a nice bounce at minimum -- along with the general market -- as this bear market rally unfolds, maybe back up to 105ish? (just a guess). Or at least, I believe this is a bear market rally in the broader market. Stagflation may be good for gold and inflationary proxies in general, but it's not good for "equities" as an asset class. And stagflation is where I believe we are and are headed. By easing aggressively the way the Fed has done and effectively "running the printing press" to cushion the housing bust and the credit contraction that it spawned, the Fed will save the banking system, but the price will be inflation.
Position in Gold, Gold Shares
The Reaction to News - Mr. Practical - 9:52 AM
Retail sales were probably the worst I have seen in 25 years, with guidance not much better. When consumer discretionary stocks didn't go down, traders covered shorts and by the end of the day had these stocks up 3-5% across the board.
This is a "bull market" response. In a bull market when bad news does not send stocks lower it is normally due to insider buying seeing an inflection point: the dip in sales or profits is old news and those that know already see things turning up.
But if we are in a bear market for stocks, which I believe we are, then those bull market responses will fail. Traders violently covered shorts but unless it is really caused by a turn in fundamentals that rally will quickly fail. Guidance indicates that this violent rally was short covering as a bull market response.
Separately wheat futures have been up limit five days in a row. It is certainly an accomplishment that bureaucrats have convinced the investing public that food prices don't matter anymore. I guess we can all just get skinnier.
But the pattern of higher input costs and lower output costs continues to squeeze future profits
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