Buzz Bits: Dow, Nasdaq Rebound
Your daily Buzz highlights...
Do you Believe in Miracles? - Todd Harrison - 12:50 PM
Settle down, Al Michaels, we're a long way from home. Still, the Snappa off of the S&P 200-day is pretty sharp as we edge through a thin and thinner Friday afternoon. Just how jiggy is the tape? The XAU is only down a deuce. Now that's jiggy!
It's worth noting that market internals have completely flipped--from 2:1 negative to 9:5 positive. That, coupled with the traction in the financials, the spike in the VXO, the ramp in the semis (+2.5%) and the slippage in the dollar (halved it's gains) are reason for optimism in Matador City.
Risk management is a two-sided equation, Minyans, so please be careful heading into the afternoon. And, just because I don't have alotta risk on (totally kidding), I just found out that I've got a 3pm meeting in....New Jersey!
Position in metals, financials
You want a toe? I can get you a toe, believe me. There are ways, Dude. You don't wanna know about it, believe me. - Kevin Depew - 11:31 AM
- Yesterday we warned to keep an eye on 676 for gold as that forms a serious brekadown in the futures from the previous high-risk formation.
- Where to now? On a PnF basis there is no chart support until 244.
- July corn has formed a bullish shakeout pattern with the move below 254 today.
- Crude has given multiple sell signals on a PnF basis, and I see no support until the 65 level.
- 1250 is a very important support level on the SPX.
- By the time we get to that level we will be oversold based on the PnF 50-day MA indicators and very near DeMark TD-Sequential buy setups in multiple indices. I'm still looking for that early next week, Monday or Tuesday.
- But again, my thesis is that relief from those levels will be both less than most expect and shorter in duration.
Position in gold, corn, SPX equivalents
Mini-Minyan Mailbag - Vitaliy Katsenelson - 11:20 AM
Like your hero says, "I look for a consistent and superior operating performance and turnarounds seldom turn." Wal-Mart (WMT) isn't exactly a turnaround, but my point was that at more than 2% of the U.S. economy, it would be reasonable to expect Wal-Mart to be harvesting cash at this point and instead of cannibalizing its own sales. Maybe all of the things you say will happen and Wal-Mart will turn into a poor man's Target (TGT). Or maybe not. You really don't know, and the odds are against them.
Let's say for the sake of the argument you are right and I am wrong. Even in the worst case, Wal-Mart can grow sales in the US at GDP or at least a couple of points above GDP as it takes market share from weaker counterparts and adds double digit int'l growth and are still getting to high single digit earnings growth. Couple this with a dividend yield (which would be higher as capital expenditures in this case would decline and free cash flow rise) and in the worst case we are still talking about a total return of 10% a year or so. I can live with it.
Position in WMT
Stick 'Em Jays - Adam Warner - 11:14 AM
As a proud alum of defending national lacrosse champion Johns Hopkins University, I hereby have to question those Orange-glazed glasses that Toddo must be wearing.
But in all seriousness, it's good to have the lacrosse focus on actual games again.
Volatiltiy in the metals patch continues to trade at 52 week highs, although it has generally not lifted in this latest debacle. It rings bullish, but I would note that it has NOT given off a good directional signal so far.
Hey good lookin.... - Laurie McGuirk - 9:55 AM
Gold at $20 under the London AM fix, the price the world was happy to buy physical gold an hour or two ago, looks pretty sweet. Just sharing the vibe.
Position in gold
Precious freak-out!! - Fil Zucchi - 9:31 AM
Heads up Minyans!!! Gold is down $23 but IMHO, it's actually worse than that. Trading in the gold e-mini futures, the domain of small speculators, has been WILD all morning, with volume going through the roof. The combo of higher margins and falling prices looks to have caught a lot of people leaning the wrong way. Come the open I suspect that my puts / Streettracker Gold shares (GLD) will put me in a net short position against my longs. That's not where I wanna be for the long run so I'll likely be doing some covering. That said, I still plan to practice safe trading down to the $575-600 area.
Out for the rest of the day. Make it a good one and an even better weekend
Position in gold, XAU, GLD
Turn Off the TV - John Succo - 8:49 AM
On financial TV the treasury secretary is talking about "the incredible shrinking deficits." Tax receipts are up and the deficit is shrinking. The implication is that this is good for stocks because it shows the economy is expanding and tax cuts are working.
This is the problem with financial reporting and its effect on naive investors. This is why current and past fundamentals do not matter.
You must always ask the question "why" because the market always asks it. The market already knows that the deficit has improved some, but stock action of late is telling you that it knows why and is doubtful it will continue.
Tax receipts are up off of the heels of a hot housing market over the last few years. This has already happened. It is already in the market. The market is now asking what next; that is how it is pricing stocks.
Are housing prices rising or falling now? Are further capital gains (on the margin) going to continue to increase tax receipts or is a cooling housing market on the margin going to subtract from them in the future?
These are questions the market is asking. The market does not care, no matter how the media tries to get you to believe, what happened in the past.
If you are going to be a trader, think like one.
Turn off the TV.
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