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Buzz Bits: Week Ends With Markets in Red


Your daily Buzz highlights...


Flashback! - Bill Meehan - 3:25 PM

This day in market history...

  • Closing levels 2 years ago
    • DJIA: 10,480.15
    • Naz: 2,050.24
    • S&P500: 1,140.53
    • Crude: 36.28
    • Gold: 422.10

This day in Minyanville history...

  • In '03 Toddo transcribed an argument between Hoofy and Boo titled Debate!

In other news...

  • In 1997, the Howard Stern Radio Show premiered in Fort Myers FL on WRXK 96.1 FM

Calm before the storm - Rod David - 2:50 PM

The SPX 1315.50 (ESm 1323'00) target was met early enough that sellers had plenty of time to fade it. And, oh, what a fade - almost back to last week's lows. In fact, S&Ps have been consolidating just one point above last week's lows for three hours. So close and for so long without simply making a quick round-trip to tag the prior low and prove the market has the strength to recover.

The protracted consolidation has meanwhile had the same effect as a bounce, correcting the morning's oversold condition. It's gotten too late in the day for a false break lower, and the only question is whether it is too late in the week for a false break higher. But a break either way that reverses back into and through the past three hours' consolidation is likely to extend in that direction. This pattern tends to resolve down, so a false break higher is more likely.

If there is another downleg today, then there is only March 28's lows at SPX 1292 (ESm 1300'50) to offer a obligatory bounce. Any lower would be a lot lower.

Alert Alert Alert. On The Run 10's at 4.98% - Bennet Sedacca - 2:25 PM

Off the run 10's are AT 5%, so expect some buying here. We are still staying short, not out of stubbornness but out of respect to the tape. It still looks too orderly and ordinary for a bottom.

I don't even know anyone worried. So again, bear markets get oversold and REMAIN oversold, until the big barf as far as I know. Yes, we are tempted. No, we are not buying, even though as we have said many times before, as a trader, I would likely cover and re-short. But we are investors who are waiting for the end of April and a feeling of the unruly.

Might we be wrong? You betcha bottom dollar. Just doesn't feel like the REAL bottom. So we sit in T bills, 1-2 year Treasuries and short-term cushion MBS.

We are also alert to change our position QUICKLY if necessary. Not advice, but we are getting closer, closer, closer.............

Positions in Treasuries and MBS

Rejected! - Jason Goepfert - 12:33 PM

The rejection we've seen from the attempt at new highs this morning has been emphatic - we've already seen the largest intraday range in the S&P 500 since January 20th, and it's one of the largest ranges in the past year.

I looked for other times we've seen the S&P hit a new high, then on the same day it closed negatively and in the process carved out the largest intraday range in at least 30 days.

The last time this occurred was January 3, 2000, after which the index lost even more in the following days before bouncing then dropping again.

In the past decade, we've seen this 5 times, and three days later the S&P was lower 4 of the 5 times for an average of -3.4%, so there's some recent precedence for continued weakness.

Fists and Docs - Todd Harrison - 10:13 AM

Almost on cue, the first half hour of emotion has subsided--along with the first half hour of gains. While echos of laughter eminated from (some of) the mainstream media, supply has filled in and tainted the tape. Most notable, perhaps, is the downside reversal in the chips and piggies, both of which led the tape higher in recent sessions.

Market breadth is flatter than a sat on hat as Hoofy tries to regain his footing. The "vernacular" felt a bit giddy this morning although, as we know, one (half) hour does not a market make. I've still got the loose grip thing going, with select (situational) longs, some defined risk (financial) puts and wide eyes looking for edges.

I've been known to make and take big bets but, truth be told, I'm not there right now. As I'll always be honest--and I'll always share my eyes--you'll be the first to know when I click off my safety and set my sights. I will say this--if the internals begin to drip (and sentiment starts to shift), Hoofy may need that nail file to widdle his way out of a cage.

As always, I hope this finds you well.


Position in financials

My next business venture? Crackberry Anonymous - Fil Zucchi - 9:32 AM
  • The worst news in the lousy report and guidance by Research In Motion (RIMM) is this press release by Palm (PALM) - the timing of which I'm sure was pure coincidence. Nothwithstanding the cheerleading by management, take away RIMM's monopoly on push email service and there is little excuse not to abandon the crackberry for the features-filled pastures of Palm based devices. Will RIMM disappear completely? No. Is it worth 35x its fading business? Neither.

  • Don't worry about a thing,
    'Cause every little thing is gonna be alright.
    Singin': "Don't worry about a thing,
    'Cause every little thing is gonna be alright!"

  • Our friends at MS Howells have been on the small-cap enterprise management software story for a while. It has not been very exciting so far, but there has been a very subtle yet different mojo in the stocks recently. Why now? If Hoofy is right and the economy is ripe for ripping, capex is gonna have to do the heavy lifting. The faves are Interwoven (IWOV), Webmethods (WEBM), Tibco (TIBX), Vignette (VIGN), and Stellent (STEL) all of which I am long as a basket.

Have a great Friday Minyans!


CME's NYMEX deal makes CME one-stop shop - Brian Gilmartin - 9:19 AM

The key to the Chicago Mercantile Exchange Holdings (CME) - NYMEX deal announced yesterday, which caused a late ramp in the stock price on heavy volume, is that it gives CME energy and precious metals products to complement their already ample equity, forex and Eurodollar futures and options products.

CME is moving smartly to the upside again in pre-market, as the additional products will likely get analysts to ratchet estimates higher on the additional volume.

We'll develop and explain the economics of the exchanges coming public in another forum (like News & Views), but CME led the IPO binge by coming public in December, 2002 at $35 per share, and other exchanges have followed. However the CME - with the NYMEX announcement - remains the exchange with the broadest product lines, and in addition, has the low-cost clearing operation, which is why the Chicago Board of Trade (BOT) sold their clearing to CME prior to coming public.

Although the CME remains the best-positioned exchange, be careful with the stock. CME is more volatile than Google (GOOG).

Time Bomb - John Succo - 8:12 AM

The 30 year government bond yield has risen 53 basis points since the beginning of March. That is quite an impressive move.

Stock bulls will say that is because the economy is "strong." That is precisely what they were saying in the fall of 1987 as interest rates were ticking ticking up and the dollar was ticking ticking down.

And then like a bomb everything exploded.

Higher interest rates are a head wind to stocks.

I have been told that there is no "bad" employment number for stocks this morning. A low number gives evidence that the Fed can stop raising rates (even though I personally do not believe they are in control of that) and a high number will show the economy as "strong."

Whatever. I think long rates are the key here. If they continue to rise from here it will increasingly troublesome for an over-valued stock market (I will get lots of mail on that one, but am prepared).

Just as in 1987, higher rates are ticking.


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