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Buzz Bits: Markets Head Higher


Your daily Buzz highlights....


Earnings Report

  • Advanced Micro Devices (AMD) reported EPS of $0.38 vs $0.29 cons on revs of $1.33 bln (in-line). Gross margin was 58.5% vs 54.5% exp.

AMD sees Q2 sales being flat to slightly down seasonally from Q1.

Shares of AMD are currently halted. The company will hold a conference call at 5:30pmET.

  • Lam Research (LRCX) reported Q3 EPS of $0.65 vs $0.62 cons on revs of $437.4 mln vs $424.7 mln cons. The company cited market share gains and solid execution for driving strong results.

Shares of LRCX are trading lower by approximately (2.55%) after hours.

C'mon, just a little more... - Jason Goepfert - 2:44 PM

An interesting seasonal quirk that might come into play this year is what has happened to the S&P 500 the day after Good Friday when it is trading below its 50-day average at the time.

Out of the 21 years this has occurred, it has closed that day in positive territory only 2 out of the 21 times, and the average return was a rather nasty -0.8%, making it one of the worst post-holiday moves of them all.

There is a slight positive bias before the holiday, and even more slight after Monday. If we continue to consolidate around here for the balance of the week, this tendency is something to note.

And more signs of complacency anyone? - Adam Warner - 11:56 AM

Advanced Micro Devices (AMD) reports tonight, and I have to say I am not blown away by the nervousness ahead of the number. The board anticipates a roughly 2 pt. move or so tonight, or 6-7%. Sound high? That's under half the upside gap from the last report. Now generally, you would expect an overpricing this time around given that history, not the "fair" levels from today.

Oil - Ascending Triangle Pattern - Phil Erlanger - 11:36 AM

Non-energy minerals, industrial services and energy minerals lead the way as crude oil rallies towards $70/ barrel. Technology sectors are holding well. Transportation, utilities, health services and health technology are weak.

See the chart here.

Crude oil is the fly in the ointment for the market, and obviously is driving the sector action. The pattern for crude clearly is not a double top as most stock market bulls had hoped. Triple tops are very rare. It is more likely an ascending triangle pattern that indicates that crude will break the $70 resistance level yielding an upside count at least to $80 – yuck! Time to trade those Hummers in for Civics.

See the chart here.

Our strategy is to look for buying opportunities as the market correction plays itself out. Because of the crude situation and the overall choppy nature of the market last year and this, we continue to recommend a select few short positions as insurance.

The theory of relativity - Fil Zucchi - 11:22 AM
  • After the pasting of the last 3 days one would figure Hoofy would put up a bit more of a stand - if he can. So far we are just chopping, but breadth is trending in Boo's direction.

  • Gasoline is adding another 1% after the release of the DOE inventory numbers.

  • Watch the $44 level on the Streettracker Homebuilders (XHB) as a homies proxy, as the 10 yr. treasury is putting in a pretty nasty upside (yield) reversal.

  • Gun to head? I think we bounce around these levels through tomorrow, but I am not putting any money where that mouth is.

Position in XHB

Timing is everything... - John Succo - 11:13 AM

Both Guidant (GDT) and Boston Scientific (BSX) are trading up today. Yesterday's news that the EU will approve the deal has the market believing that the U.S. will approve the deal shortly.

So why are the stocks trading higher?

The deal entails a pricing period where the average price of BSX over twenty trading days is used to determine the ratio of stock to be issued to GDT shareholders upon closing. The problem is the market needs to guess which trading days those are: the twenty days are set to end three days prior to the closing of the deal. So the market must guess when closing is to determine the twenty days and thus the ratio.

Guessing, it now looks like somewhere around today might be the end of the twenty days. Due to the nature of the deal, there has been (this is guessing again) "artificial" pressure on BSX as arbitragers have forced down the stock price during these 20 trading days to get a more favorable ratio.

As the trading period ends, so does that pressure.

Personally I think that BSX overpaid for GDT. But then, I think those kinds of things a lot.

Position in GDT, BSX

Now that Macke's back in town... - Jeff Macke - 10:41 AM

Greetings from hideously rainy Northern California where I'm currently up to my neck in "To-Do" items, mud and golf equipment I may never get to use.

One thing I do still use, though I write about less often of late as a stock, is my TiVO (TIVO) set-top boxes tied into my DirecTV (DTV) service. I have no idea how Noah lived without it during his time spent hiding from endless rains but I'll never have to, after today's announcement that DTV and TiVO have agreed to continue offering the joint DTV/ TiVO service for another three years. Terms weren't released beyond the two companies "agreeing not to pursue patent violations against one another."

Given that TiVO is currently in court with DTV competitor Echostar (DISH) on a virtually must-win patent dispute for TiVO, DirecTV buckling at this point is an extremely interesting "Tell" for TiVO. In short, it seems unlikely that DTV would sign anything with TiVO unless DTV felt threatened on the patent front (execs at TiVO have told me privately that they feel TiVO actually has a better case against DTV than Echostar).

I'm still long TiVO but I have very little edge on the outcome of the case; making my mention of these events even less "advice-ish" than the standard "not-advice-just-sharing-the-process" conversations in these parts.

Up the down staircase - Rod David - 9:12 AM

Thursday and Friday's religious holidays will inhibit volume somewhat. Not as much as most other three-day holiday weekends, although it will be difficult to generate sponsorship for trending. It will be more difficult to generate sponsorship to reverse a trend. So, sellers will be trying to extend and entrench the decline as much and as quickly as possible before traders turn their attention to the fast-approaching illiquidity. Buyers will be trying to avoid that. And each has a little something in their favor.

Tuesday's close was under the morning's lows in a losing session, making lower lows likely. Gapping up or bouncing Wednesday would make the eventual lower lows that much more painful to compensate for their delay. Meanwhile, buyers outperformed sellers Tuesday according to their internal ratios - albeit on wide negative spreads while volume increased sharply. So, Wednesday's market has some obligation at some point to reward Tuesday's buyers for their relative productivity.

Also favoring a bounce is the "higher prior lows" from Friday and Monday that require being retested as resistance before a decline can be sustained. This factor isn't enough to prevent immediately extending Tuesday's drop, but it would limit the degree and duration of lower lows.


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