Buzz Bits: Dow and Nasdaq End Higher
Your daily Buzz & Banter highlights.
Gatekeepers and Keymasters - Todd Harrison - 2:45 p.m.
Action bookends expiration days, with the ticks flickering quicker on both ends of the bell. Keep that in mind as this is a particuarly important close (S&P 1405 and DJIA 12,800 remain levels of lore).
Sometimes you're gonna be the windshield, other times you're gonna be the bug. I've been the latter matter a few times lately (Schering (SGP), Wachovia (WB)) but scored one for the good guys with my last minute eyes-wide-shut nibble on Google (GOOG). My only regret? I didn't have an opportunity to Buzz it (I barely got the order in). Sometimes right, sometimes wrong, always honest.
I've taken some of those shekels and nibbled at some "underneaths" (out-of-the money puts) in the Brothers Lehman (LEH). Not huge (and likely not today's business) but I wanted to respect the process into resistance with a teenage VXO. Other than those and a handful of "situational positions," I'm all about dry powder as we edge towards our requisite respite.
OK, so Franklin Raines has to pay $25 million. I got that part. But is he still taking in his million dollar per year stipend? I haven't seen anything specifically speaking to that point.
Keep an eye on Merrill (MER) please. It got saggy all of a sudden.
It's 2:30 PM: Do you know where your next meeting is? I do, it's...here. And I've got one on its heels. I tell myself all the time "Next week, not so many meetings," but yet, they continue to stack. Not complaining as it could be worse. I could have no meetings!
Hang tough, yo, we're almost there. Let's finish with some jingle in our jeans and a smile on our puss.
Position in LEH
Intraday tech gleanings - Sean Udall - 2:25 p.m.
I'm taking a gain and trimming some long exposure into the teeth of this rally -- I'm now out of ComScore (SCOR).
I may also put on some QID (Ultrashort QQQ) near day's end for a multi-day hedge, as I don't plan on selling a single share of Google (GOOG) or many other names I feel could pull back short term but still have longer term upside.
Meanwhile, Visa's (V) topping $70, which is a value that could prove to be short term resistance. $65, -- give or take a $1.50 -- feels like a good place to buy this name. I've traded the name a couple times and think it could see something nearing the triple digits whenever we get a growing GDP again.
The question is, is that in 2008 or 2009. I'm still betting on late 2008. As well, I still maintain, that we may not officially "print" a recession (two negative quarters of GDP).
For next week I'm thinking the quarters on Apple (AAPL) and Microsoft (MSFT) will be quite strong (especially Mr. Softie), while Texas Instruments (TXN) could be mixed and possibly cause the market some near term angst. If so, the pullback might provide a chance to buy select communication semiconductor stocks on weakness. I'm also not a big fan of Amazon (AMZN) -- but that's more a valuation call at current levels.
Back to the AAPL call, I'm currently thinking the iPhone momentum will continue and think there may be opportunities downstream, which I will highlight Monday.
Lastly, I'm out of here and am finally long the DUG (Ultrashort Oil and Gas) after waiting all week for an entry that feels just about right.
Position in GOOG, MSFT, DUG
Gold's elevator and the dollar's staircase - Cody Tafel - 12:55 p.m.
As I Buzzed Wednesday, Gold looks toppy here testing the 50 day moving average from below and starting to form what looks like a bigger picture dandruff top which would project down to $800 for the yellow metal. $1000 proved to be a good target. I reiterate my view that we could see 1980's type action in Gold this year…volatility being the name of the game.
In regards to Professor Cooper's call on a dollar low, it certainly looks like we're getting an ideal setup right now and I second his view that the Euro looks like a high here. There's clear negative divergence on the RSI indicator on the recent high, and it looks like a weak close today will push the EUR/USD cross below the key 20 day moving average.
The Euro also sure looks like an ending diagonal (5th) in Elliott Wave terms so maybe Professor Waggoner can provide a little more color as that would be his specialty. Regardless I would expect a test of previous 4th wave lows coinciding with the 50 day moving average at 1.54 and then bigger picture maybe even a pullback to the mid 1.40's.
Citigroup's Earnings Confusing - Mr. Practical - 11:00 a.m.
Citigroup's (C) earnings report this morning is a confusing mess. Although bulls loved it, any accountant looking through the numbers would notice right away how much the company's financial condition continues to deteriorate and how many tricks it can use to hide that fact. Moody's put them on negative watch and Fitch actually downgraded them.
Take, for example, the headline write-down number of $6 billion. Nice headline, but if you look through all the numbers and add them up the total write-downs are actually $15 billion. And it gets worse.
The company states that "revenues included a $1.3 billion gain related to the inclusion of Citi's credit spreads in the determination of the market value of those liabilities for which the fair value option was elected." In other words (words which bulls don't like to pay attention to), because the market based price of their bonds fell it reduced the value of their liabilities. So by the fact that their credit became worse they are allowed to show an actual gain to earnings. I know it makes no sense that when a financial company's financial condition worsens they are somehow able to show a gain in earnings because of it, but don't complain to me. You'll have to take it up with Citi's CFO.
The bottom line is this: The U.S.' major banks are barely holding on to life itself. Citi's financial condition will keep them from making money for a long time even if they do not bust. As speculators pile into the financial stocks again, maybe they should sharpen their pencils a little more.
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