Buzz Bits: Dow Moves Up, Nasdaq Turns Lower
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Earnings Report - MV News
- Palm (PALM) reports 3Q EPS of $0.16 vs. $0.12 cons on revs of $410.5 mln vs. $403.51 mln cons.
- Jabil Circuit (JBL) reports 2Q revs of $2.9 vs. $2.83 bln cons. JBL does not report EPS due to ongoing stock options review.
- Nike (NKE) reports 3Q EPS of $1.37 vs. $1.33 cons on revs in-line of $3.93 bln.
Bell Buzz - Todd Harrison - 3:45 PM
- In like a lamb, out like a chop as the market meanders and the sun peeks through Gotham. Heck, it's almost "time for a run in Central Park" weather!
- Directional risk into the close? South, as it stands, given the stealth slippage in the brokers, banks (-1%) and semis (-1.5%).
- Of course, given yesterday's "thank you sir may I have another?" rally, the bulls would correctly offer that this action is healthy and digestive. I hear ya Hoofs. Got milk?
- He would also note, as he's a bull, that the BKX stochastics are about to cross at the bottom.
- S&P 1450, while not as "tight" as Boo would like, is the next discernible resistance for the broader tape.
- I've lost my sense of humor again today. Hate it when that happens.
- The good news? Tomorrow is Freaky Friday and we've got all sorts of March Madness to look forward to. I'll see YOU on the other side of tonight, Minyans, so make it count and keep it real.
Position in financials
Today's SPX? - Lance Lewis - 1:08 PM
Mostly just fun more than anything else, I've got a few charts I want to share. First, is a chart of the SPX. See it here.
Now, you can see that while the basic technical structure of the "peak" in the SPX is remarkably like today's (a selloff, followed by a double bottom, followed by a rally, etc), that's not actually "today's SPX."
Today's SPX looks like this on the charts.
What's my point? Well, it's possible (although an extremely low probability) that when and if the current rally fails, it will resolve in a downside panic of sorts. And the fact that today's peak so closely resembles the other peak that I've cited above is a little intriguing, especially given what happened once that peak eventually resolved (which you can see here, with the dates now included).
Is that just a funny coincidence? Probably... But that price structure and its total duration of about a month and a half is pretty common at major stock market peaks historically. If the market is smart enough to look ahead and see the inevitable result of both an eventual US recession and a higher rate of inflation (both of which lie ahead in my view as we slip into a version of stagflation), a drop of that sort in US stocks would be warranted. And the March-April period has certainly been known to be unkind to US stocks in the past, as many that owned tech stocks back in 2000 might recall.
In any event, we can worry about that if and when the rally fails. As we've noted before, the trend for the past 10 years or so has been that the stock market doesn't worry about problems until it has literally tripped and fallen over them, and that's the way I am going to keep leaning until I see something that suggests otherwise. So for now, let's just wait and watch... and hang onto plenty of gold and gold shares...
Position in gold shares
Scapegoat Randoms - Jeff Macke - 12:18 PM
- Bloomberg reports that Motorola (MOT) CEO Ed Zander is "running out of scapegoats" for repeated missteps, according to some fund managers. Not to worry, Mot-bulls, the company can always hire a new CFO to blame for next quarter's miss.
- Nice report out of General Mills (GIS), announced this morning. As expected, if you were paying attention to PPI data, the company is seeing rising input prices. Also as expected, if you paid attention to CPI or your grocery bill, GIS is passing those costs on to me and you.
- Not such a nice quarter out of Borders Group (BGP). The company is closing a slew of Waldenbooks stores and severing ties with Amazon (AMZN) to open it's Borders-brand website. BGP's CEO advises investors to "not waste time thinking about" a possible sale.
- Some shows run from American Idol and March Madness (seen a new Office or 30 Rock lately?); Fast Money is countering with Gene Freaking Simmons, of Kiss fame, on Face2Face. Hey, can Jim Nantz touch his sternum with his own tongue? Let's just say I doubt it, Minyans.
S&P 500: Extremely Vulnerable! - Jess Thompson - 9:48 AM
How vulnerable is the S&P to a retracement from these levels? Normally stock index futures charts (which expire every three months) are spliced together and adjusted on roll-over to create a continuous chart.
This chart is a non-adjusted S&P futures chart which I purposely do not adjust. Often I check this chart as it reveals certain price points not seen on on a normal adjusted chart. This chart reveals that the large overnight gap into the recent collapse on Feb. 27 separated from the 1452.50 close (at X) of Feb. 26 (on this non-adjusted chart). This indicates a thrust into the 1450 handle may be a temporary "price too high" and vulnerable to overhead supply .
This chart is a normal continuous chart of S&P futures which is adjusted for roll-over. Notice the move down on Feb. 27 really turned ugly precisely when the 1447 level (the 2/12 bottom) failed to provide support. This chart indicates the S&P has thrust up into this key inflection point.
Bottom Line: The momentum of the late-afternoon buying is considerable and may be able to push the S&P higher into week's end, but one of the very worst places to be long the S&P is when it's extended in the extreme on a short-term basis and pushing up into overhead resistance. We are there this morning.
I would consider reducing long exposure in the S&P's in this zone between 1447 and 1450. My firm was a tactical (short-term) seller of the 1449-1450 handle this morning in the Globex before the NYSE opening. We'd take partial profits near the 1445 to offset risk.
For more on what to look for to validate strategic and tactical trade entries and my firm's trade management process, click here!
Position in S&P, Globex
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