Buzz Bits: DOW, Nasdaq Rebound
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Pressure pushing down on me
Pressing down on you no man ask for - Todd Harrison - 3:05 PM
Alrightee then, contra-hour comes to a close with Boo making his strongest stand of the day. My eyes are flickering between Google (down an evil Minyan), JP Morgan and Citi (pretty in pink), market breadth (still 2:1 positive), the metals (XAU up a deuce) and the clock (before yet another trip to the airport).
While anything is possible, I don't foresee a redeux of last Friday's late day meltage. More likely, Hoofy will suck it up and capture this freaky Friday battle in the context of a much broader, longer and dangerous war. I say this, of course, as I watch the semis and Nazz dip into Red Dye. Not a shocker, given the S's over N's vibe, but worth noting on a relative traction basis.
I'm tying up (some of) my weekly 'to do's' before hopping towards the Carolinas for some vibe time with Minyan Brooks and his clan. We've got some Syracuse hoops as an appetizer, followed by Black Crowes and some good 'ol southern grub. While this is "official RP business," it's the type of stuff that makes our philanthropic efforts come to life. And that'll surely spark a wink from above.
Fare ye well into the bell and have a tremdous weekend!
Position in JPM
Offshoring - Sanjay Somaney - 1:10 PM
CNBC is reporting that Wal-Mart (WMT) is entering India by partnering with a local company. I think that chatter is a bit premature as the Indian government has not yet moved beyond its "single brand" retailing policy for foreign direct investors.
The government will allow majority ownership by FDI's as long as they are marketing a single brand in India, like for instance Cartier watches or Rolex watches et al. For multi-brand players like WMT, the increase to majority ownership is still being considered and will be passed pretty soon. However, for now WMT could more than likely enter the Indian market by taking a minority stake in a joint venture with an Indian company and then when the rules change, increase their stake in the JV. This is a similar strategy they have followed in similarly "regulated" markets like Japan, Mexico and China.
The other news is that WMT is increasing its goods sourced from India to about $640 million for FY:06, ending this month and that amount will more than likely double in the next fiscal year. WMT sources Indian goods like home wares, textiles, and fine jewelry from India.
Indeed indeed - Fil Zucchi - 12:40 PM
- If my I/M lit up as much for stock ideas as it is for commentary on the impending Hoyas doom I'd be in great shape. What do people have against the Hoyas? Isn't Calhoun a lot easier to despise?
- Yesterday we guessed a short term (60 min. chart) double bottom in the Russell 2000 (IWM) and we are getting it today. Where it goes nobody knows, but the two lines shown here are my best guess. Momentum divergences have worked well so far, so we'll keep watching.
- We also got our low 120's puke in the Philly Gold (XAU). The "defense" has now shifted from blitzing to "prevent," as I don't particularly mind getting longer the precious ones if we see lower prices.
- I am switching sides on a small Apple (AAPL) position as it approaches trendline support and the 200DMA.
- I've already gone through all my finger nails and the real March Madness is still a week away. Good thing I'm already bald.
Great news for the India Inc story indeed.
Position in XAU, IWM, AAPL, Hoyas
An interesting look at utilities - graphically... - Bennet Sedacca - 12:35 PM
I mentioned the other day that utes had broken. See the chart here. They have, and despite today's rally --somewhat counterintuitive, but markets never ask ME where they should go. Note that we have spent a few days below the line.
There are two possibilities: 1) The breakdown was false, and all the sellers below the trend line get trapped and they rally, or 2) We just 'kiss the trend line' and resume the downtrend. I don't have a position either way, but am interested as it will give us some guidance on the future of stocks and bonds.
I actually think enough damage in bonds and utes has been done for an eventual bear market in stocks. I have been looking for an April 1 top and still am. The fact that there is a lag between rates rising and stocks hanging in is not unusual. The higher rates, in my experience, hurts the internals first, and THEN the generals. That is my story and I continue to stick to it. So we will look to lighten our equity exposure into April 1 and watch for an entry point in bonds (I actually do get bullish sometimes!).
Goldschlager - Tom Peterson - 12:12 PM
Gold bullion is still down hard but both the HUI and XAU made undercut lows this morning and now have gone tentatively green.
This is what we wanted to see to setup a decent trade for the longside. One tactic is to simply buy the gold mining stocks, or a basket such as the XGD on the TSE. The other tactic is to sell puts or put spreads.
The first target for the XAU is the 135 -137 area. Much depends on how we get there. In other words, the setup here today may be good for only a trade back to 135 -137, but we won't know until later.
Position in gold
Never Fear, Option sellers are here! - Adam Warner - 11:27 AM
I hate to spoil the party, but the VIX has dropped nearly 6% in under 2 hours of trading and is now under 12 and yes, eligible to pitch in the Little League World Series again.
Now, part of that is the Friday effect of bid-lowering to pay account for the weekend decay. But this early in the day? And this soon after a rather ugly stretch? We are only one more blip down from getting an oversold signal a mere 3 days after the VIX hit overbought levels, and that is just Too Complacent, Too Soon in my opinion.
Mini-Minyan Mailbag - John Succo - 10:15 AM
Prof. Succo -
Whether hyperinflation or deflation, don't you want to be long gold in any case? During the late 70's gold flew because credit was so tight. So, please correct me if I am wrong, but you want to be long gold no matter what. Am I mistaken?
In the long run, yes. If they hyper-inflate gold will immediately rise from here. If they attempt to "slowly deflate the credit bubble", this in my view would crumble into deflation. Gold would in the short run probably correct significantly. But the policy to address deflation would most likely lead to hyperinflation later and gold would once again shine.
Now watch this gold puppy... - Laurie McGuirk - 9:57 AM
It will either:
a) Get slammed to 522 after the London close (no physical market on a Friday arvo).
b) Head back to 545 due to physical buying.
Either is a win for me. But I go for (b) – not advice.
Silver - who cares!!!! I own many bars of the stuff, in my own possession, and its value doesn't change for me - silver is silver (not paper claims or futures) - watch 9.45 and 9.72 for the paper players. Be careful - this market is rather scary.
Position in gold, silver
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