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Buzz Bits: Dow, Nasdaq Drop Lower

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Earnings Report - MV News

  • Sun Micro (SUNW) reported EPS of ($0.06) vs ($0.07) cons on revs of $3.18 bln vs $3.20 bln cons.
  • Netflix (NFLX) reported EPS of $0.10 vs $0.06 cons on revs of $224.12 mln vs $221.24 mln cons. Net sub adds were 687k vs 519.5k exp. Churn was 4.1% and SAC was $38.47.
  • Yum Brands! (YUM) reported EPS of $0.59 vs $0.57 cons on revs of $2.09 bln vs $2.11 bln cons. YUM P-4 blended comps of +1% vs +2.9% exp. International sales were +5% (in-line).



Icahan wreaks havoc on short sellers - Phil Erlanger - 3:49 PM

Ever notice that Carl Icahan accumulates positions in undervalued companies like Imclone (IMCL) that have lots of shorts? The stock is up today on announcement that he has taken his position in IMCL to 9.95%. Our short intensity level is 94% with an Erlanger Short Ratio of 5.98. The Technical Rank is 50% so the "squeeze potential" is there. Earnings are due tomorrow and ASCO pre release abstracts look favorable to IMCL.


Speaking of secular, distinct and somewhat haphazard... - Kevin Depew - 3:28 PM

Taking a look at a couple of stocks Minyans have pinged me about this afternoon:
  • Valero (VLO) on a PnF basis shows a long column of Xs higher with the nearest potential sell signal down at 47. A DeMark 9 sell setup could occur as soon as tomorrow. See the chart here with the recent DeMark indicators.
  • Hansen Natural (HANS) continues to show a potential PnF target of 161 based on the March breakout at 98, with near-term support at 130 and the nearest sell signal down at 120. Recent DeMark TD-Sequential and TD-Combo sell signals only produced a temporary pause in the trend before the "risk levels" established by the sell signals were broken, suggesting strong trend resumption.
  • The NDX remains above PnF trendline support as long as it is above 1690.
  • As noted on Friday, the Dow Jones Industrial Average has registered a TD-Sequential 13 sell signal and could register a TD-Combo sell signal as soon as the right conditions are met. TD-Combo requirements are more rigid than those applied to TD-Sequential.



Bund in the oven? - Jason Roney - 3:12 PM

German Business Confidence (the IFO Index) is reported tonight (well, at 4 a.m. so technically tomorrow) along with the US consumer confidence tomorrow. Over the last five days the German bund has formed an extremely tight closing range. This marks only the third time in the last year we've seen a 5-day closing range this small (and just the eight time in the last 10 years). This is not a directional tell but past occurrences saw a significant increase in short-term vol.



Some potentially interesting tells in bond market action...today... - Bennet Sedacca - 1:24 PM

I see some interesting divergences, at least so far today, that make me wary of the rally in bonds we expected to start today. First of all, housing stocks are getting whacked to the tune of 1.5%, utilities are red (barely - but SHOULD be rallying), and REIT's are down.

This really feels to me like an oversold rally like we have had on the journey up in yields and down in price since my firm picked up on this trend. Sure, nimble traders could try for 107-00 area in 10 year futures, but a point just doesn't do it for me in the scheme of things. I want more upside to take on risk in this market, personally, and am forced to remain patient.

Also, I keep getting the sense that we are going to see the 'creep' in oil prices into consumer goods if we haven't already. Down here in Florida, we are already seeing guys that do yards and pools increased their prices due to 'higher fuel prices' - I guess I'm just too lazy to do my own yard when it hits 90.......In my mind, it is not if, but when that creep of higher rates and commodity prices makes their way into consumer prices, hurting earnings.



Don't be crude... - Tom Peterson - 12:48 PM

While crude goes through a correction lasting probably several weeks, we would expect the oil and oil-service company shares to have relative strength, bottom before crude does, and start a new rising trend before the crude correction is complete. In other words, we look for relative strength in the shares to help tell us to watch for the end in the correction of crude prices.

As noted in our recent Strategy Report, we're expecting a 15 -20% correction in crude, and a test of trendlines in associated stocks.

BTW, one of my sharp eyed friends (thanks John) noticed a DeMark 13 sell signal for crude.

See the chart here.

Position in oil


Too many blogs? - Adam Warner - 11:05 AM

Just read the other day that there are now 35 million blogs and counting. And a new one gets created every second.

But is it too many? Google's (GOOG) "Blogger" program, which hosts about a kajillion blogs, including one by yours truly, is down today.

How crucial is Google in the blogging biz? Well, aside from hosting, which they do basically for free, they run their AdSense program through the system. Click on an ad on any site, and the blogger gets "x" cents credit in his account, and at the same time the advertiser pays Google "y" cents for that very click. And Google of course pockets "y-x" cents.

And guess what, they do not reveal either "x" or "y". But one can presume it is a pretty nice markup. Nor do they reveal the magnitude of Click fraud, the degree to which their ad revenue is artificially pumped by either "bot" programs or humans that create "splogs" with no actual content, simply to generate ad clicks.

So look for this system outage to end soon, it is too lucrative a biz for GOOG to leave offline for long.


The Bling Thing - Todd Harrison - 10:23 AM

Thy precious metals are front and center anew as silver dips a quick finski (5%) and gold dabbles in double digit losses. The bipolar stroller has become old hat, of sorts, as each day seems to be a world unto itself. What's interesting about today's fray, however, is that the smeltage is coming on the heels of a softer US dollar.

Be that as it may--and it may be a passing fancy--equity markets are fending off some supply to start the five session stretch. We know that S&P 1295-1300 is initial support (it's where we broke out) and NDX 1700 (there now) is a similar stand. Given the bunk breadth (2:1 negative in spite of a positive fixed income skew) and downside leadership (semis and, perhaps more importantly, the brokers), Boo has wrestled minxy Monday control from his bovine brother.

My current risk profile remains largely in tact as we edge into a fresh five and the XBD probes previous acne. It's still early, I know, and the post-expiration hangover is likely close to subsiding. Keep your eyes peeled and your risk tight as we'll likely see Snapper attempt to turn the tide.

As always, I hope this finds you well.

R.P.

Position in financials



Haven't seen the whites of their eyes - Rod David - 9:32 AM

Another new high can't be counted out. Especially not with the market ignoring the hype over Crude Oil. And especially not until S&Ps actually close under a prior relative low and signal that momentum has reversed down. The persistent optimism isn't necessarily bullish - notice what happened to Thursday and Friday mornings' optimists. And look at what's happened to Friday afternoon's optimists that caused the last-minute bounce - S&Ps fully retraced the last-minute gain soon after the Globex open.

But since Friday's open and close each bounced, Monday's open was likely to bounce, too. Failing that, as appears to be the case this morning, the next likely outcome is for the opening loss to be reversed. It's not normal for Monday's open to ignore Friday's influences, but the Globex loss hasn't extended lower overnight. Unless S&Ps were to print lower lows after the cash session's open, the morning will more likely range flat to higher.


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