Buzz Bits: Dow, Nasdaq Gain Again
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Oh, it doesn't just seem paradoxical... - Kevin Depew - 3:35 PM
An article from the Shrewsbury Chronicle takes a look at housing in Massachusetts:
"Paradoxical as it may seem, a modest increase in housing supply now, leading to a moderation in housing price appreciation could help inoculate homeowners against a much larger loss in their property values in the future," Barry Bluestone, professor of political economy and director of the Center for Urban and Regional Policy at Northeastern told the Shrewsbury Chronicle. "The only way to increase housing, the economists agreed, was to help builders build more affordable homes."
Economic theory is littered with paradoxes, but unfortunately the above is not among them. Somewhat related, however, is Allais Paradox, one of the more famous paradoxes of behavioral inconsistency and choice under conditions of uncertainty.
Here is a notable quote from Allais that, although spoken years ago, is relevant today: "In essence, the present creation of money, out of nothing by the banking system, is similar - I do not hesitate to say it in order to make people clearly realize what is at stake here - to the creation of money by counterfeiters, so rightly condemned by law."
CME Moving on the Volume Report - Brian Gilmartin - 3:15 PM
Despite the good May volume that Chicago Mercantile Exchange (CME) reported before the bell this morning CME opened lower this morning, and I held my breath for a few hours (accounts for the brain cell loss and the drooling I did before lunch) but fortunately we have reversed on good volume this afternoon as CME has recovered the $350 area, and looks to be on track to do at least average volume today.
I'd love to see one day where we do twice average volume in CME or 1.1 - 1.2 ml shares to get me comfortable with the position.
This is one leadership group I'd like to see recover as metals get taken out and shot.
Position in CME
There's something happenin' here
What it is ain't exactly clear... - Todd Harrison - 12:40 PM
Alrightee then, as long as we're sticking with a "for what it's worth" theme, I'll offer that S&P 1280 should cap the tape today in front of tomorrow's payroll data. Why? A self-fulfilling prophecy, perhaps, as traders are conditioned to sell resistance with an unknown looming.
The tricky aspect to this mix? Tomorrow's numbers may well be binary, meaning "gap risk" is more than likely, it's probable, as we toggle an important inflection point. Thus, those who wanna put their chips behind Hoofy or Boo will have to do so with the understanding that they'll be on a horse by the time the track opens tomorrow.
Where's Stephen Stills when you need him most?
We just heard on TV about what a possible inversion of the curve would mean - Bennet Sedacca - 12:28 PM
Well, let me throw my hat in the ring. I think a curve inversion is likely to reoccur. That's right-for the second time this year! And yes, I think it is important. REAL IMPORTANT, in fact.
I have been talking about how the world seems to be levered to the front end of the yield curve with with carry trades (soon to be carried away trades, I think) and the US consumer with credit card debt and every kind of ARM imaginable.
But Boom Boom is talking 50 basis point hikes? You MUST be kidding me, Ben. The housing market would implode, IMHO (yeah I dragged out the old 'bubble comparison chart again - see it here - shoot me if you are tired of seeing it, but it does prove a valuable lesson). I could imagine an inversion followed by some quick footwork by the Fed to save housing, the consumer and the economy. Note to self-a bubble is a bubble is a bubble is a bubble. They are ALWAYS the same and always end in pain in despair. And the inversion would prove it to me.
Big things in small packages. - Rod David - 9:20 AM
Wednesday triggered both a morning bias-up signal and an afternoon bias-down. That's not rare for an inside day, but the signals captured a combined 12 points when the session only ranged 10. Wednesday's volatility and pattern fulfillment revealed a struggle between differing opinions that didn't fit the definition of a complacent inside day. And Wednesday afternoon's rally recovered only what the morning's surge had already accomplished. That's a less bullish reading than just referring to the session's 10-point gain.
So, it's not surprising that S&Ps overnight retraced half of yesterday afternoon's rally. That loss, too, has now been recovered, in reaction to this morning's economic data. More reports are coming - this is an especially busy day - and post-open reports tend either to reverse or to accelerate any initial trending. The target of Tuesday's decline still needs to print during regular trading hours, despite its thorough testing Tuesday night. That would probably be avoided this morning so long as S&Ps remain in positive territory through the opening hour.
Morning News - Jon Doctor J Najarian - 8:25 AM
Sun Microsystems Cutting 13% of Workforce - Sun Microsystems (SUNW), the world's No. 4 maker of server computers, said it will cut as many as 5,000 jobs in the next six months as part of a plan to end almost five years of losses. The moves will cost $340 million to $500 million, mostly in this quarter, and will then save $480 million to $590 million a year.
Judge Approves Delta Concessions – The bankruptcy judge approved the $280-million-a-year concessions deal yesterday, scant hours after the airline's rank-and-file pilots gave the pact their nod by a vote of 61 percent in favor. Court approval came despite an objection by the government's pension insurer, which insisted that a $650 million note and $2.1 billion unsecured claim that Atlanta-based Delta has promised the pilots should belong to the agency if the pilots' pension is terminated as expected.
Euro Manufacturing Growth Most in 6 Years - Manufacturing growth in the 12 nations sharing the euro unexpectedly accelerated to the fastest in almost six years in May, the sixth indicator this week of faster economic expansion. Even so, The Bloomberg Euro 50 is down .7%, FTSE is off .7%, and I show the DAX down 1.5%
Gabelli Lawyers In Settlement Talks - Lawyers for the famous money manager are reportedly in talks with the Justice Department to resolve civil-fraud claims arising from alleged use of sham small-business affiliates in federal auctions of cellphone spectrum. The settlement is expected to exceed $100 million. Gulp!
Stock to watch:
Bronco Drilling (BRNC) Why?
Because the contract land driller to oil and natural gas companies in the United States looks like it bounced at $20.50 and is showing offers being taken on this morning's Heat Seeker. Also, at just over $2 above the 52-week low, this stock is among the cheapest in the space. The 52-week high is more than $11 higher, at $32.
I will patiently buy in for $21.10 with a $25.50 target. I will set my stop loss $.50 under my entry.
Position in BRNC
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