Buzz Bits: Dow and Nasdaq End in the Red
Your daily Buzz & Banter highlights.
Pin the Tail on the Donkey! - Todd Harrison - 3:54 PM
Look at me, the S&P! Are you really that surprised? There is a serious game of hold the line going on as we edge towards today's close. That's setting up a binary opening tomorrow following the orange crop report. Noice.
Consistent with earlier vibage and in homage to Winky, I've unwound the push that was Pan American and whittled the DBA puts to token status (with a tight stop). I do have some situations on my sheets but for the most part, I continue to operate with capital preservation in mind. None too sexy, I know, but "sexiness comes from within" according to Mr. P.
Some of the best traders on the street are getting whip creamed so keep that in mind as you bump and grind. Risk is my middle name and the fact that I'm in aversion mode speaks volumes to those who know me. Perhaps that's telling, something we'll look back upon 20% higher with knowing nods, but it's how I feel right here, right now.
And of course, that's subject to chage. Always.
Gonna hop and chop, Yo--we'll see you on the freak that is Friday!
Position in DBA
Stocks With Revenue Outside U.S. - Ryan Krueger - 2:32 PM
As I mentioned in my last Buzz, because I am more interested than usual in breaking down sales overseas and domestic: Using the Russell 1000 universe I am going to share a field of 64 of stocks who derive more than 64% of their revenues outside the US and with few exceptions are set up to catch fresh highs in currency conversion tailwinds selling to customers whose appetites are growing.
I'm also going to flip the Russell 1000 upside down and hold a tournament for short candidates based on the opposite, the headwind of primarily if not exclusively getting paid in U.S. dollars and by customers whose consumption growth is slowing.
For some pre-game stretching, a bit a trivia: How many of the Russell 1000 have zero exposure to overseas sales? Closest to the bucket with a correct answer wins a not unrelated Kaizen vs. Complacency cap from me that has been known to bring great fortune and more than a few envious looks. Bonus trivia tiebreaker: Can you name one of the handful whose revenues are 100% overseas? E-mail me with your best shots.
UNG's Bullish Pattern - Michael Paulenoff - 1:18 PM
Although my next optimal near-term target zone in the U.S. Natural Gas Fund ETF (UNG) is 49.50-50.00, the larger pattern is so bullish and has so much upside potential that I will not be surprised to see the price structure accelerate to the upside in a vertical assault on the 56.00 to 58.00 measured intermediate-term target zone.
Frankly, I am eyeballing 50.00 as a viable exit area for my current long position, but if and when we approach the nearest-term target, I will assess the two-way risks of NOT taking profits sooner rather than later. In the meantime, as we speak the UNG is pushing up against yesterday's high at 48.12, which should be hurdled and should trigger the upmove to 50.00.
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Widening Spreads - Lance Lewis - 12:50 PM
Note that the spread between the 3-month bill yield and the Fed funds target rate has widened to a record 166 bps this morning (assuming it closes here or lower for the week).
Since August, you will also note that such a widening of this spread into this area (i.e. - the market becomes so terrified of the system seizing up that people pile into T-bills) has tended to precede emergency Fed action as well.
Could the Fed ease tomorrow morning after the release of the jobs data? It's a distinct possibility in my view. The Fed has made it pretty clear that it is going to continue to ease in a "timely" manner and defend "the system" regardless of inflationary pressures. I for one do not doubt their resolve, but then again that's why I'm long gold and gold shares.
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Position in gld, gold shares
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