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Buzz Bits: Dow, Nasdaq Finish Higher

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Editor 's Note: This is a small sample of the content available on the Buzz and Banter


Earnings Report - MV News

  • McKesson (MCK) reports Q4 EPS $0.68 vs $0.68 cons on revs $0.68 on revs $23.06 bln
  • Activision (ATVI) reports Q4 EPS ($0.03) vs ($0.08) cons on revenues of $188.1M vs $132.5M cons.
  • Nationwide (NFS) reports Q1 operating EPS $0.94 vs $0.94 cons on revenues of $1.09B vs $1.08B cons.


Flashback! - Bill Meehan - 2:08 PM

This day in market history...
  • Closing levels 6 years ago:
    • DJIA: 10,412.49
    • Naz: 3,720.24
    • S&P500: 1,119.55
    • Crude Oil: 27.08
    • Gold: 279.20


This day in Minyanville history...

  • In '04 Professor Succo reviewed the Fed's words in Reality.


In other news...

  • In 1970, four Kent State University students were shot down by National Guard members during an anti-Vietnam War demonstration.


Left field thinking - Fil Zucchi - 1:19 PM

Much has been written on the issue of whether oil and equity prices are inversely correlated (i.e oil goes up / stocks go down and vice-versa) or not. Clearly that has not been the case for a long while, and in fact, the two have actually had a decent correlation.

Enter gold and silver which, for the short term, are looking exhausted to me. And lastly, the other commodities - as represented by the CRB Index - are also looking parabolicky.

What would happen if oil, precious metals and commodities were to take a coordinated dive? Would that spook the bond market even more than it already is? Is that going to spank equities because of the crowded environment in commodity linked stocks? And is that going to spank the market doubly because of rising rates? Is this a lose-lose environment where higher commodity prices will kill the consumer and lower commodity prices/higher rates are going to . . .kill the consumer?

As you can tell my "I must be bullish, I must be bullish" spiritual exercises have a hit a wall.

Position in precious metals



Buzzlets... - David Miller - 12:30 PM

  • The rumors have been flying about a healthcare fund liquidating, to confim what Toddo wrote earlier. It feels like it did in 2002 when Fidelity blew out of their healthcare positions near the bottom that year, but it's hard to tell for sure. When I look at companies that have obviously been bombed beyond their fundamentals, I see some common names, but to make this broad an effect the fund would necessarily be large -- which would tend to display commonality by coincidence.
  • Bill Gates, to his great credit, is doing something about trying not to be the richest man in the world. Perhaps we are more attuned to his philanthropic spending because we live in the same area.
  • Since the last week of March, the NBI hasn't been able to string more than two positive-breadth days together. One yesterday and it looks like one today will make two, so Friday should be instructive.
  • Have some thoughts on the "perfect" biotech investment research site? I'd surely love to hear your input. All ideas, no matter how wacky, are welcome.


Metals vs. Metals Equities? - Scott Reamer - 11:23 AM

Regarding Toddo's question on metals vs. metals equities, this analysis is an especially difficult one because of the offsetting forces at work. (1) Socialization of resources is no different than Smoot-Hawley on the surface (acts as a massive impediment to free trade and the price discovery mechanism at the heart of capitalism). But below the surface it's even more insidious: socialization will inevitably mean massive reductions in investments in production: thus mines, wells, fields etc. will continue to yield smaller and smaller amounts of materials. Indeed, already we're seeing Petrobas (PBR) announce that they are stopping investment in Bolivian projects. Smaller and smaller yields mean less supply which all other things being equal mean higher prices.

BUT…one cannot diminish the demand-dampening effects of higher prices themselves. One of the ironies of the monetary reflation the Fed and PBOC have engineered is that they created a situation where demand all through the production value chain is dampened from higher prices. If end consumers can't afford things, they simply buy less of them, creating, all other things being equal, excess supply.

So those two factors: decreased supply and increased supply may or may not offset each other; much depends on the timing of each of those forces and, of course, the larger credit cycle in which those dynamics are playing out.



Bet the Farm? - Tom Peterson - 11:10 AM

Station Casinos
(STN) is not one I follow regularly, so I have no position or suggestion here, but I thought I'd bring it up for two reasons (1) it's a technical pattern that often works, and (2) there is a buying opportunity here.

First the bear flag one sees on the chart, attached here, is a classic setup with a 'flat bottom' but lower highs. That often leads to a break of support. Now STN is trading near an area that it broke out from back in March, and this is defined by the action from July -August 2005 until March 2006. One would expect at least a bounce here.

Given there is not much accumulation showing, and there has been a large decline, I'd expect choppy trading in coming days as strong hands take over from the weak hands. How well it holds today's lows may depend on the conf. call today.


Hold me closer, Tiny Dancer.... - Todd Harrison - 10:44 AM

The Minx slinks to the Thursday fray as the critters look for a meaty play. They see the double-edged technical levels--the S&P is flirting with reverse dandruff style acne as the NDX tickles the trendline from the April high. They also see the dollar, slipping ever-still, and understand that the macro crosscurrents will help shape the direction of our collective rudder.

As it stands, and despite the lagginess in the financial space (Merrill has joined Citi and Bear in Red Dye), market breadth is supportive of an upside leg and a lil' spigot of liquidity could force the hands of the technical types. You don't have to agree with it--and you certainly don't have to trade it--you simply have to see and respect it.

Meanwhile, after a few days that felt like a Mercury Retrograde redeux,, the Minyan mojo is back at the hallowed halls as we map out some very exciting stuff. I'm being told by President Fish that we may unveil some spectacular stuff at MIM3 so if you wanna go, but haven't yet locked your spot, get in the game baby!

Gotta hop--I hope ya'll trading 'em right.

R.P.

Position in C, financials



Of NEM Ticker & Gold-Price Tracker - William Fleckenstein - 9:52 AM

I did a little quick math, using the methodology that I've used all along. By my way of looking at it, if you assume Newmont (NEM) has 100 million ounces, which is fairly conservative, before yesterday's decline it was trading as though gold fetched roughly $538 an ounce. Of course, that gives no credit to its oil-sands investment, which, depending on the value we ascribe to it, would mean that Newmont would be discounting gold at something less than that price. Obviously, that's a far cry from the price that gold was trading at this morning.

Though I admit that my methodology is probably flawed, Newmont has for a couple years tended to track the gold price that I backed into, using this methodology (though it hasn't for the last year or so). Either Newmont's stock is discounting a big break in the gold price, or it's undervalued vis-a-vis gold. Perhaps it's a little of both.

Position in NEM



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