Buzz Bits: Dow Grows, Nasdaq Slows
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Randoms - Fil Zucchi - 2:08 PM
- I have no idea why F5 Networks (FFIV) is trading like a ton of bricks, but, to my eyes, the way it trades suggests someone wants out in a bad way. The action is not changing my opinion about the longer term prospects for FFIV, and weakness is what I want to buy. In deference to the current mojo however, I have bought 65 strike puts and sold 2x 60 strike puts at even money. If I get assigned the naked portion of the 60 puts my cost basis in the stock will be $55.
- I am not getting nearly as cute with Akamai (AKAM), which I have now nibbled on to add some "beta" to my names, and I continue to bid for at lower prices.
- The Bank Index (BKX) is not shrugging off the M&T Bank (MTB) news; it has not had even a resemblance of a bounce so far today. Technically speaking one would have to say that the BKX 200 DMA is now firmly in the rear view mirror
- While not a direct competitor of Euronet Worldwide (EEFT), the buy-out of First Data (FDC) shrinks the pool of publicly traded payment processors.
Positions in AKAM, FFIV, EEFT
The NEW HUI - Lance Lewis - 1:33 PM
Note that the HUI popped intraday on the news that New Century (NEW) was filing Ch. 11 this morning and has continued to move higher throughout the day despite the S&Ps having stalled out around 11:00 EST.
Why did the HUI jump on this news? Because this sort of credit rot and financial contagion is precisely the thing that eventually forces the Fed to ease, and as we've been expecting (and was the case in November of 2000), the gold shares are anticipating the Fed's next move (which will be to ease when they shouldn't, thus, further stoking inflation) and beginning to diverge from the S&Ps, just as the XOI has already done.
That's obviously not good news for stocks in the near term, however, as more financial pain is coming before the Fed will eventually move.
Positions in gold shares, GDX calls
Around the Horn - Kevin Depew - 11:59 AM
- While the "can't get 'em down" chatter seems to be growing, note the weakness in financials with the BKX down more than 1.5%.
- Even more worrisome is that the weakness is originating in regional banks. Check out the KBW Regional Bank ETF (KRE),
- Biotech HLDRs (BBH) registered a DeMark TD-Sequential buy signal recently. On a point and figure chart 168 is an important support level.
- Related, Genentech (DNA) continues to hold its ground; 80 is the key support level there.
- Doesn't make up for last year's game 7, but not a bad way to start the season.
- Corn limit down. Looks like supply far exceeding demand.
Position in DNA
Wild ride on Friday instructive... - David Miller - 10:03 AM
I've written before how the "new thing" with some biotech funds is to short the common and short the calls, doubling-down on a position. Friday was the first time we've seen a large one of these positions have to quickly (some believe "forcibly") unwind. Dendreon (DNDN) has about 82 mln shares out and it traded over 90 mln in one day. It was the most active company on the NASDAQ Friday. The options activity was as massive as it was mind-boggling. Today's trading is all about cleaning up after Friday's wild ride, positioning for the next 43 days ahead of the FDA decision, and the growing rumors the "unexpected" decision has one or more funds scrambling to keep their investors from bolting.
I'll have more on the fundamental side later in the week. Thanks to those Minyans who sent atta-boy messages. We don't do advice here, but it's still nice when we can call attention to an oppy and make you some money.
Position in DNDN
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