Buzz Bits: DOW Rebounds
Your daily Buzz highlights...
Earnings Report - MV News
Jabil Circuit (JBL) reported EPS of $0.37 (in-line) on revs of $2.31 bln vs $2.22 bln cons.
Flashback! - Bill Meehan
This day in market history...
- Closing levels 4 years ago
- DJIA: 10,427.67
- Naz: 1851.39
- S&P 500: 1148.70
- Crude: 25.56
- Gold: 297.40
This day in Minyanville history...
- Prof. Succo answered a mailbag on Fed Speak
In other news...
Story Time - Scott Reamer - 3:23 PM
John was just relaying a real estate anecdote to the rest of us on the trading desk and it paralleled several other stories i have heard first hand from other parts of the US.
The essence of the stories are similar: sellers of houses or condos that have been on the market for 6-12 months are seeing some traffic but they are not seeing LOWER prices being offered for their properties. They are getting NO prices. That is, zero bids. This despite 20-30% reductions in asking price.
You read that correctly. There is NO market.
Essential to any negotiated market's stability is that there be a reasonably healthy liquidity involved so that in times of stress, the marginal buyer or seller can determine price discovery. We are seeing increased examples of situations in which there is simply no market. When real estate association economists tell you that the real estate market will not collapse and will simply revert to normal growth rates by declining a few %, they are decidedly not taking into account that there is simply NO market.
In order to get a 5-10% decline in real estate values, you have to have a transaction. In certain markets and certain neighborhoods, there simply isn't a market. That has potentially massive implications for housing prices.
We're Goin' to Sizzler! - Hoofy the Bull - 11:49 AM
The Matador Crowd has a few things going for 'em...
For one, breadth is skewed 9:5 positive.
For two, the financials are sticky green.
For three, S&P 1300 is back underhoof.
And fo sho', if the negative Microsoft news doesn't dent the tape soon, a fresh chorus of "can't get 'em down" will surely echo with laughter.
Just offering the 'other side' of the trade for ye faithful. Now, has anyone seen Daisy? I'm feelin' like a protein shake for lunch!
VXO-How can one NOT be in wonderment, Toddo? - Bennet Sedacca - 11:26 AM
Yesterday, here, I openly asked our derivatives professor John Succo, how in the world VXO fell on a day like that? His answer of course, was on the spot. I don't how it can stay there either, but one thing I DO KNOW.....
When and if this market falls, the speed at which it falls will make people lose their lunches. I have been there, done that, as they say. And please don't tell me it can't happen. Anything can happen when psychology and leverage converge. It reminds me, eerily, of portfolio insurance in 1987.
That is why we are selling early. When the door shuts, it shuts. And then, you will see the 'elephant try to escape through the keyhole.' Yeah, I have seen that too. Not a prediction, but this is really getting freaky. So we are heading for defense mode.
One last thing, I continue to think the bounce in bonds has been feeble at best, and that when cycles turn negative next week, you may wanna consider a seat belt. Stay tuned.
Red Red Vol - Adam Warner - 10:44 AM
Just wanted to play Devil's Advocate on these Red Volatility Sisters. Yes, they act awful and Complacent and Bearish. But.....
This is the first week of a 5-week cycle, which is ALWAYS particularly rife with option selling pressure. There are no macro market drivers out there on the horizon, like a key earnings or big jobs report. Maybe some surprise warnings, but no one ever games overall market volatility for that.
In addition, we also had that inexplicable lift in the calculated VIX last week that appeared to diverge from where the S&P options actually changed hands. Whatever caused that (and I frankly have no clue); the VIX is designed precisely to measure that) may have reversed itself this week such that the VIX is now back to mirroring the actual volatility again.
I do want to emphasize that I don't "agree" with such low options premiums, I am of the same opinion as Toddo and Prof Succo. I'm only saying that this particular move in the last 2+ days may be a little misleading.
Mini-Minyan Mailbag - Laurie McGuirk - 10:21 AM
Silver to $9.78? One or two things could happen. If traders are now loading up on silver in anticipation of the final approval, then yes, you will get a 'sell the news' reaction - maybe.
It all depends if Barclays has started buying to fund the ETF. If they have, then yes, you get a pullback, eventually. If Barclays hasn't completed buying before final approval, then silver, in the short term, takes out $11, easy.
If I had to guess, Barclay's prolly needs to do at least some buying to push the price higher. Couple that guess with the short covering that will happen and that is how I get the at least $11 price.
I know, it sounds pretty dumb coming from me, but I call it as I see it. How much do you reckon they have already bought? They already have a fair whack, I reckon. I've been watching the deliveries in Comex and would be surprised if Barclays hasn't been using Scotia Bank to soak up the silver for the ETF. They have been the big stoppers on silver in the past few months - by an enormous amount. The ETF is "old news" and the initial reaction was up and now all sorts of paper silver players are looking for more. They get nervous / bored / scared / disinterested and sidetracked quickly and will sell without instant gratification, IMO.
I haven't sold an ounce of my physical silver and won't till we see what I expect as multiples of current price. A 7% pullback isn't much when one is looking at hundreds of percent upside. My comment is for short term traders rather than us long term dudes. Silver is the ULTIMATE metal - bar none, monetary and industrial - par excellence. Supply/demand laws dictate a higher silver price. Remember though, ETF silver is not physical ownership of silver. It's just another proxy paper play on silver that won't be delivered , even if you want it!
Position in silver
Q&A? - David Miller - 10:09 AM
I was at the Invest NW conference all day yesterday. One of the features of the event was a talk by FDA #2 Dr. Scott Gottlieb. He chatted about the FDA's new Critical Path program, which essentially intends to implement changes in the way we approve drugs so personalized medicine comes sooner rather than later.
When asked (by me) during the Q&A about whether this was going to fix the problem of an overreliance on biostatistics instead of patient needs, his answer was non-committal. I followed up in private and got essentially the same response: "We have one way of approving drugs we've used for decades. It won't be easy to switch to new ways but we are committed to patient-based outcomes."
Translation? "No, I'm not holding my breath either."
Mini-Minyan Mailbag - Tod harrison - 10:02 AM
"Toddo, Microsoft through $27 could weigh on your Intel try. Just a heads up brother. Minyan Ken."
Sure can, although I'll offer that $26.50 is more important level as it's the trendline from late December and the 200-day moving average.
With regard to Intel, you may be right--I may be crazy--but with my stop level set directly below, I'm risking 50 cents to potentially make $5 (if it fills that upside gap). As I said in the previous Buzz, I'll take that risk reward every day (and twice on Sunday).
Not advice, Minyans, just sharing the thought process.
Position in INTC
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