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Buzz Bits: Dow and Nasdaq End Higher


Your daily Buzz & Banter highlights.

Editor's Note: This is a small sample of the content available on the Buzz & Banter.

Runaround Sue - Todd Harrison - 3:47 p.m.

I emerge from my marathon melds to spy the tape and offer some quick hits. I'm overwhelmed on a few fronts so, without further verbiage, some top-line vibes:
  • Trannies with Acne? Ewww! Unless, of course, you're looking at the Transports, which are back above the neckline of the (bullish) reverse head and shoulder formation.

  • The S&P has a strikingly similar chart, which would confirm with a move above S&P 1405, if and when. I would like this but Professor Cooper has been all over it the last week or so (heckuva call Coops).

  • There is a pretty important story in the WSJ today on LIBOR. Two quick thoughts, both of which are equally important. First, the structural implications. If LIBOR is indeed understated, upwards of $350 trillion in swaps may be misvalued. Second, psychology is critical with regard to perception of the credibility of banks and faith in the systemic structure.

  • I've got my weekly thang on FOX Business Happy Hour tonight, which starts at 5:00 EST (I'm usually on around 5:30 EST). You won't be able to miss me--I'll be the dude with the red rubber nose and big floppy feet juggling topics and chainsaws.

  • As long as I'm in confessional mode with regard to scheduling, my daily dance is equally outstanding tomorrow. I'll be in pocket in the morning and then off-site starting at high noon. My apologies, in arrears and advance, as I build the 'Ville and balance the journey.

  • Fare ye well into the bell, Minyans. I hope you knocked the stuffing out of it today.


Minyan Mailbag: Transport Waves - David Waggoner - 3:35 p.m.

Prof. Waggoner,

I enjoyed
your article yesterday. I'm baffled by the movement in the Transports. Could you shed some Elliot wave analysis on this index?

Minyan Jess


Transports appear to be correcting up and are close to completing a large double zigzag.

A 1:1 ratio is the highest probability for completion of the double Z (5182). From here we can expect at least a 3 wave correction of a correction. One more extension (triple combination) is possible.

Click to enlarge


Charting SOX - Sean Udall - 2:36 p.m.

The SOX is again trying to recapture the 89 day moving average. So call it 89, 90 or 100 dma -- bottom line this area is proving to be a resistance zone. I still believe this zone will be broken fairly soon and the SOX has a good chance at ascending to the 200 dma, or around 430.

Click to enlarge

Meanwhile the Beige book came out and pretty much told us everything we already knew. The only thing I think you can glean from this is that the Fed may be growing resistant to lowering rates further as it mentions that price pressures are rising.

First, these are rear view mirror numbers and most of this news is priced into stocks at this point and has been confirmed multiple times with various economic releases over the last couple of months. Second, I still feel that we'll face more deflation than inflation over the next couple of years. Third, I've been thinking the Fed should be done lowering rates for some time but I could make a case that they could lower the discount window another 25-50 basis points. Further, had the Fed attacked the discount window much earlier as I mentioned months ago, they would have not had to lower rates as much as they have.

Lastly, I think the EPS results going forward will have a much more important impact to stocks than the Fed as I think the market feels the Fed has done most of its work and at this point the lower rates need time to continue to work their way through the system.

What I... - Quint Tatro - 1:35 p.m.

What I like:

  • 3 to 1 positive breadth in the NAZ, 4 to 1 in NYSE.
  • Trend line recapture in NAZ (see my earlier post).
  • Goldman (GS) confirming a short term double bottom.
  • Retail (RTH) going up with Oil going to the moon.
  • Move sparked by earnings, not helicopter Ben, economic data, or capitulation.

What I don't like:

  • Volume isn't surging (decent but not great).
  • Oil is going to the moon.
  • We're still in a longer term down trend.
  • Not being loaded in each stock I profiled HERE.

What I've done:

  • Added more Emerging Market exposure (EEM).
  • Refused to sell down the shippers (Dryships (DRYS), Genco (GNK)).
  • Booked some quick American Superconductor (AMSC).
  • Started a Nuclear ETF (NLR) Nuclear? Yup, Nuclear.

What I'm watching:

  • The close! Solid I buy, Weak I sell.

Positions in RTH, EEM, DRYS, GNK, AMSC, NLR


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No positions in stocks mentioned.

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