Buzz Bits: Markets Mixed
Your daily Buzz highlights...
The Elephant in the room.... - John Succo - 3:47 PM
Financial TV is supposed to keep viewers up on what is going on. No one here remembers them mentioning gold stocks today.
Gold is a bright light shining on the shadowy machinations of bureaucrats at central banks. Their printing policies are finally "frightening" gold.
It is clear that their goal is to continue the credit bubble at all costs. Gold does not like this.
No one cares to ask why things are happening. All that printing is going now into the most speculative of things. All commodities and precious metals are breaking out here.
All I see is risk growing.
Position in gold
Mini-Minyan Mailbag - Jason Goepfert - 3:41 PM
"I see that the Nasdaq Composite has traded to new highs while the SOX hasn't. Isn't this unusual, and what might it mean? I position trade with a holding period of one to three months, so I'm most curious to know about that." Minyan Bryan
Bryan, this has happened a few times before over the past decade, but it is pretty unusual. I looked at all times the Comp hit a new 52-week high at the same time the SOX was trading at least 5% below its own high.
Going forward, both indexes under-performed a random return, but the SOX was especially hard-hit. It was positive two months later about 35% of the time, with an average return of around -2.9%. Striking a blow against mean-reversion between the two, the spread between the Comp and the SOX tended to continue to widen, with the Comp out-performing after two months 71% of the time, by an average of +3.2%.
Flashback! - Bill Meehan - 3:27 PM
This day in market history...
- Closing levels 2 years ago:
- DJIA: 10,381.70
- Naz: 2,000.63
- S&P 500: 1,127.00
- Crude: 36.15
- Gold: 257.10
This day in Minyanville history...
- In '04, Prof. Succo pondered over the question, What Bothers a Bear?
In other news...
- In 1964, Jeopardy debuted. I'm sorry, I meant "What is Jeopardy debuted?"
They Call it.... - Todd Harrison - 2:29 PM
Contra-Hour has begun as Snapper tries to have some fun. While I sold a ton of stuff this morning--and balanced my balance with piggy puts--I've been doing this long enough to know that I know very little. That's why you'll never see victory laps or pats on the back in these parts--as soon as you think you've got this game licked, humility is invariably hanging around the corner.
My sense is that if I'm to regret anything, it'll be overtrading the metals. I found myself in a similar position last year with regard to energy and vowed to learn from my mistakes (hence morphing it into a lesson). Still, and as I'm apt to do, I'm "trading around" a long-term bullish bias in those sectors. And they say I'm such a bear...
As it stands and as I sit, I'm relatively light and tight with regard to net risk. My market stuff is somewhat hedged, although there's always tracking risk when positioned with offsetting sectors. Still, I like my longs, I dig my shorts and I've got a spate of special situations that shouldn't be too "market dependent." Now I'm pounding my glove like Graig Nettles, waiting for the next pitch to come down the pipe.
Biotech News - David Miller - 12:22 PM
The gains in the biotech indexes yesterday were suported by breadth as the NBI was nicely positive with 105 up, 7 flat, and 48 down. Breadth today is not particularly stellar with 85 gains, 3 flat, and 72 down.
Since we backed off that IBB position I wrote about recently, breadth has been decidedly mixed. The action on my screen suggests the increase in short interest we saw last month is likely to carry over into at least the first part of this measurement period. And I'm not exactly sure what to make of my IBB chart since the buying pressure indicators I watch are doing some divergence dance they've never done before. I could interpret it as a non-confirmation of the recent pullback or I could interpret it as transitory buying that will fade and allow the IBB to move lower.
FYI, I will be traveling to NYC next week for a company R&D Day event on Wednesday. I arrive Tuesday morning and have that day mostly free except for dinner with some friends Tuesday night.
Super Sugar Bear - Kevin Depew - 11:21 AM
The higher rates move, the less the market seems to like it. This morning the 30-year yield is now at 4.899%, 10-year at 4.857%, and 5-year at 4.819% and the 2-year at 4.820%.
And just like that the market has backed off from the early spike, led by the lethargic action in the Russell 2000 (RUT), which was the first to turn lower. The RUT is one of my key proxy tells for speculation.
In the commodities arena, I am still following sugar, which I hope to buy into the 17.6 level. I also like cocoa but failed to get an order executed this morning on the move below 1500 and may have missed it for the time being.
Position in RUT equivalents
You can be a bear, you can be a bull, but you can't be a PIG. - Bennet Sedacca - 8:50 AM
We have been on this bearish call in bonds forever and I just wanted to point one VERY important thing out. Old 10's are now nearing an important 4.88% level, old bonds through 5%. In other words, we are 75-85% through what we thought the overall move would be.
Are we buying? No. Not Yet. Are we aware we have the bulk of the move BEHIND US? ABSOLUTELY. So our next move is to add duration as we puke into mid-late April. We will use proprietary and anecdotal evidence to try to time it.
Yes, I am proud of our call. But I can assure you I will not overstay my welcome. We are already examining the best ways to add duration here in a few weeks. One way it WON'T BE IS IN CORPORATES where we expect spreads to widen with the inevitable fall in stocks from the mid-April high.
Hope this helps. Not advice, just experience talking.
Eye on Gold - John Succo - 8:35 AM
The XAU is not keeping up with gold prices, and gold is increasingly looking like it wants to break out on the upside.
Scott and I have been wondering if central banks would do the right thing and take their foot off the liquidity pedal and finally ween the world off of free money, or would they take the politically easy way out and do the wrong thing in the long run and hyper-inflate.
The jury is still out, but watching gold, other commodities (copper is at an all-time high, aluminum 15 year highs, lead is at all-time highs by far), and the Russell 2000, it seems increasingly likely that the Fed and their partners in Asia will just keep on printing.
This is not a recommendation to buy stocks or gold or gold stocks for this is a very dangerous "trade." The liquidity bubble could (and eventually will) be burst by a reduction in risk by the "market" itself despite central bank intervention/manipulation.
The only thing of value that I see is volatility. Right now no one else wants it as the market continues to relentlessly sell options. It has been a relatively painful month for us as we have been a net buyer of volatility, but we are big boys. I have been doing this long enough to know that when buying value it requires losing money before making it. If I am wrong in the long run so be it: I know what I can lose and the risk is acceptable.
Position in gold
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