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Buzz Bits: Markets Close Mixed

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Metal Check - Laurie McGuirk - 3:55 PM

Gold
is nice at the top of the range again (Aussie gold at $800 an ounce)…. Did silver nudge $11 while I was away???

My premature speculaton with my personal metal equities (selling close to 25% with HUI around the 300 level) was ordinary on face value although one must always take into account time horizon, risk appetite and individual requirements - (setting up a new fund, office rents, lawyers, accountants and all that takes some wedge). Risk/reward indicated that I lightened up on some issues for a few months and I am still very concerned of a savage equity market pullback taking the metals shares down. It's hardly gonna break the bank and I was just sharing what was cooking in the McGuirk mind.

More later
Loz

Position in gold, silver



More on WAG - Vitaliy Katsenelson - 2:08 PM

I agree with Brian Gilmartin's observations on Walgreen (WAG). It was an OK quarter, but this stock is not priced for an "OK" quarter. It is expensive any way you slice it or dice it.

The Medicare Part D, aging baby boomers, high inflation in pharmaceuticals, and the stable of generics that will be hitting the market over the next couple of years (Zocor is coming off patent this summer for instance, and watch out Pfizer's (PFE) Lipitor) all factor together to create an incredible tailwind for this industry generally, and WAG specifically.

But the valuation prices this in already. Generics are good for WAG as it makes more money per prescirption - margins increase substantially but sales suffer - not a bad problem to have though.

Position in WAG



Fed Worries? - Adam Warner - 12:38 PM

Yes, they are in a veritable panic for volatility in TLT. That is assuming you consider an 8.5 volatility to be a panic.

Even by bond standards, this an extemely low level. Not saying it is unjustified to have no Fear in front on a news event where we already know the outcome, just that...well...if there is no Fear, then why does the meeting get all this psychic attention?


It's more like a quarter-end mark-down... - Jason Goepfert - 12:06 PM

Over the next few days, we will hear traders, reporters, writers and most certainly TV commentators talk about the likelihood of a quarter-end mark-up, those times that come every three months when portfolio managers goose their returns by bidding up their stocks and supposedly the market in general.

Don't fall for it - it just is not true. There is no evidence that mark-ups exist, especially at March quarter-end, and especially for equities in general. I have found that the best-performing stocks over the past quarter tend to do quite well in the days before a quarter-end, but it does not at all translate to the broader market.

But don't take my word for it, let's just look at the facts. Over the past 56 years, the last five trading days in March for the S&P 500 have shown an average return of -0.1% with only 24 of them being positive. If the prior quarter had been positive, then the return jumped up to a whopping +0.0% with 42% being positive. If the quarter was negative, then the return was -0.1% with 46% positive.

So, no matter if there were gains to protect or not, the last week in March showed an overall flat to negative bias in the S&P. There was certainly no evidence that it was more positive than random, or even positive in general. If we do happen to rally this week, it isn't because of quarter-end.



Mini-Minyan Mailbag - Todd Harrison - 11:38 AM

"Toddo, On the INTC stop. What happened Friday to prevent you from bailing? I thought the stop point was at or below $19.65. Just curious as to how you handle stops i.e., any print below, closing price only, two consecutive weekly closes below a level, etc.. Thanks for the feedback. Minyan Mike."

MM,

To each their own as there isn't a blanket approach in trading (which is why it's more of an art than a science). While I've been eyeing $19.65 as the 2004 double bottom (and an intuitive place to punt), I tend to allow for some wiggle room when levels (and markets) are as crowded as they are.

In that vein, and as I discussed on Friday, $19.35 (closing basis) is an important level in DeMark's world and one that Pepe alerted me to. So, that's what I've been eyeballing as a ripcord. I'm not crazy about the action--and the 2:1 negative internals are troubling--but setting stops removes emotion. That doesn't mean we can't change our minds, but it does offer a framework with which to measure risk.

R.P.

Position in INTC



OK. So I am supposed to be half smart in the land of bonds. Then why does this data below have me so perplexed? - Bennet Sedacca - 11:33 AM

Hedgers continue their record long in Treasury futures (see chart) while specs are record long 10's. Most times I can get a handle on bonds. The record long position in long bonds, however, makes me scratch my head.

  • Either they are getting positioned for deflation later on.
  • They are matching liabilities against assets.
  • They need duration for some reason I don't yet know.
  • There is a hedge I don't see - totally possible given the derivatives outstanding in the banking system - $40-50 TRILLION?

At any rate, 10's follow the script, REIT's and UTE's are getting ripped, so for the moment I will dismiss it as an anomaly. But I betcha by year end we find out why......



Copper Approaching Weak Seasonal Period - Tom Peterson - 11:01 AM

The copper market has some very reliable seasonal characteristics. One of those is a late March high followed by a break into April. The following charts identify the twenty of the last twenty-four years that the price rallied into late March. Nineteen produced downside breaks through mid April or later. The charts note the extent of the break through the second week of May. It is time to be defensive.

See charts here and here.


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