Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Buzz Bits: Markets Dip

By

Your daily Buzz highlights...

PrintPRINT

Freaky Monday dude! - Fil Zucchi - 3:36 PM

  • Gold and silver are overbought on both daily and weekly time frames, and yet both had eye popping moves today. Thus is the nature of primary bull moves.

  • The most catchy thing I saw on my screens today? The dollar caving like a wet noodle on the mere suggestion by the WSJ that the Fed may be close to stop raising rates; and it happened without any meaningful recovery in bonds. Not something that makes Boom-Boom too happy me thinks.

  • I've added to my StreetTraccker Homebuilders (XHB) short, as a way to get more exposure to NVHomes (NVR). Without financial engineering maneuvers (take private, buybacks, whatever) this one IMHO is not worth half its price. To go at it directly though it's just too dangerous.

  • Outside day reversal in Caterpillar (CAT), commodities notwithstanding.

  • "Sorry folks, park closed!" Thanks to Minyan JB for spotting this intriguing piece of news.


Position in XHB, precious metals



Oooh! Oooh! Oooh! Yes, Horshack... - David Miller - 3:16 PM

Two other thoughts...
  • NBI breadth is ugly at 30 up of 159 stocks, but it's been below 30 three times in the last nine trading sessions.
  • I opined that the "bubble" in stocks shifted to real estate and that the trick was to figure out where that bolus of money would go when the real estate "bubble" started to deflate. I figured equities and options/derivatives. I think I'm wrong. I think it's commodities, specifically gold and oil. I couldn't care less about the former, but if all that excess capital flits into oil then we're all in trouble.


Position in IBB calls



"Smile, Caroline, there's justice" - Bud Fox - Jeff Macke - 3:07 PM

TiVO
(TIVO) has given back about half of it's after-hours move from last Thursday after winning their patent suit against Echostar (DISH). CBSMarketwatch.com has a cautionary piece on the news, noting that TiVO has a long way to go before they cash this court W into ongoing business.

Also on the case are our friends at Weisel and William Blair, both noting that the win is "crucial" and "big" for TiVO in terms of leveraging future relationships with cable MSO's.

From a strategic perspective, from where I'm sitting it seems that TiVO becomes a fairly obvious acquisition target for any number of players in the media foodchain from cable to set-top boxes.

Position in TIVO


A look at the Utility Index - Tom Peterson - 1:46 PM

Since luckily snagging the late January rebound high in the UTY (as it tested the underside of the broken blue trendline), we've been expecting at least a test of the 400 area support extending back to October 2005; while also being appropriately bearish on treasuries (plus the US dollar, which is important for many fixed income managers).

Now we are here close to interim support on the UTY - what next? I expect a bounce here soon because it is oversold and probably can't sustain this downside pressure much longer . But I don't expect an oversold rebound to go much more than back to test underneath the broken "ice" support area near UTY 420 -422.

Thereafter, I would look for a drop to extend to test the 375 - 385 area. There was not a lot of action below 390 a year ago to say for sure where it could stop; while the meat of trading was in the 380 -382 area, it may find support as high as 388.

See the chart here.


Someday, everything is gonna be diff'rent
When I paint my masterpiece... - Todd Harrison - 12:59 PM


With the paint slowly drying on the Monday Minx, a crimson glimmer has begun to glisten. We noted the "S's over N's" dynamic earlier but the post-hump action has more of a N's under S's feel to it. In other words, the weight of the latter seems to matter more than the early jig in the old school. It's subtle, fer sure, but it's there if you squint.

While my primary tea leaves remained mixed--sticky green financials, strong energy and envious metals are offsetting pronounced lethargy in the homies and a general overall market malaise--our internals are drifting on either side of the flat line. That's a recipe to do a bit less for active traders looking to squeeze profits from the holiday thinned stone.

The one area that isn't asleep is in the commodity (and dollar) spectrum. Front month gold futes are up an udder $15 while silver counts it's Bar Mitzvah blessings. And they're not alone. Nat Gas is up 3.5%, copper is up 3% and chuga (aka Sugar) is higher by a deuce. Remember our discussions at CRB 320? They defended that level with gusto yet the S&P is 1% lower while the CRB is 8% higher. A recipe for ketchup or signs of supply?

Things that make you go hmmm....

R.P.

Position in financials



Schwab: Leveraging the P/L - Brian Gilmartin - 11:09 AM

Since Charles Schwab (the person) took over at Charles Schwab & Co. (SCHW), the stock price has sat up and taken notice.

This morning, SCHW reported q1 '06 results, with eps in line with recently raised guidance, and revenues slightly ahead of consensus.

What caught my eye in updating our spreadsheets was the P/L leverage: Net revenues grew 21% y/y, while expenses grew just 8%, resulting in eps growth of 58% from 3/31/05.

Pre-tax income margins have risen to 31% from last year's 23% in the March quarter, primarily due to the return of the individual investor to Schwab. Per the 10k numbers, the individual investor accounts for 74% of revenues, but 84% of total pre-tax income.

Despite the positive developments, SCHW has underperformed TD Ameritrade (AMTD) the past 12 months, although SCHW is starting to close the performance deficit.

Position in SCHW


It's gettin' so a businessman can't expect no return from a fixed fight. Now, if you can't trust a fix, what can you trust? - Kevin Depew - 11:01 AM

This week 119 S&P 500 companies are reporting earnings. PPI and CPI data arrive on Tuesday and Wednesday, respectively. Fed minutes tomorrow afternoon. The Chinese President is also arriving tomorrow morning for a four-day tour. In other words, things are wrapped tighter than a mummy in shrink-rap.

On the indicator front there are no real changes from last week. Risk remains high... still... and with many potential catalysts on the horizon this week, the road could be littered with unexpected potholes with probabilities favoring downside resolution.

Additionally, former breakout levels for SPX, RUT, NDX, DJIA are now overhead given last week's technical damage. The bright spots continue to be energy and financials - the BKX in particular held support at the 106 level last week while other groups were giving up the ghost, and of course commodities.com.

Position in RUT/SPX equivalents



State of Things... - John Succo - 9:31 AM

In my opinion nothing has changed. The U.S. economy is literally on "borrowed" time with no "dark matter" making things better than they really are: foreign investment in the U.S. is earning paltry treasury returns while the much smaller investments by the U.S. overseas is currently earning much higher returns as foreign stocks significantly outperform the U.S. stock market.

If that ever slowed down we would see a real crunch in the trade gap and current account deficits.

I have said it several times: income has been replaced by capital gains. The U.S. economy without capital gains is in real trouble. Can they go on forever? Perhaps, but the risk is significant that they will not.

There is a reason why no "respectable" person of financial acumen will take the post of treasury secretary: all are literally scared of current policy and its possible outcome.

Risk is high.



THIS CONTENT IS FOR EDUCATIONAL PURPOSES AND IS NOT INTENDED AS ADVICE.

Minyanville contributors may trade securities that are discussed on the site, both before and after the articles are published and/or may have a position in such securities for either personal or firm account(s). Minyanville contributors will indicate whether he or the firm has a position in stocks or other securities in any of the companies he discusses in an article. He will not disclose his or the firm's ownership of any securities issued by companies that are not discussed in an article. The disclosures will be accurate as of the time of publication of an article and may change at any time thereafter without notice to the reader.

The information on this website reflects an analysis of market conditions by Minyanville contributors and should not be interpreted as or deemed to be a recommendation to any investor or category of investors to purchase, sell or hold any security. Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Minyanville contributors will not respond to requests for individual and specific investment advice.

The views expressed on this website are solely those of the writers whose articles appear on this site and do not necessarily reflect the views of the Fund or of any other person except where expressly indicated.

Copyright 2006 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE