Buzz Bits: Dow, Nasdaq Close Slightly Lower
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Bring it Home Buzz - Todd Harrison - 3:39 PM
- That smallish buy program did indeed dent the upside but alas, breadth has barely budged. A recipe for doing less? As my brother Jeff Saut would say, "you betcha!"
- The heaviest Betty in piggy land? Yep, JP Morgan (-1%), which is eyeballin' its 200-day again.
- Please join me in a moment of silence for our worthless June Paper. May peace be with you.
- That's a heckuva comeback by the drillers as the OSX tickles the flat line anew.
- And that stealth XAU snapper that we flagged in the metals continues to continue.
- The good Doctor, Jon Najarian, just informed Queen V that he wants to play shortstop in our MIM3 softball rubber match. That works for me, Doc, as long as I have Terri Succo on my side!
- The more I think about the defined risk in the BKX and XBD, the more "sense" it makes as a hedge vs. my long metals and energy. The risk? That technicals are slippin' down the metric totem pole.
- Wasabi Minyan Lynn Halstead--don't be a silly goose!
- I'm gonna flip lids and juggle struggles as I finish up my spate of 'to do's' and grab a quick haircut (I get charged by the follicle). I sincerely hope ya'll in a good place and that you're taking the time to enjoy the ride. Fare ye well into the bell and have a heckuva weekend.
Who Sucked Out the Volatility? - Bernie Schaeffer - 3:32 PM
Todd, on your financial bullets (2:35 Buzz), I offer this up the following purely as information. XLF is back trading below 32 today, so some relief for the shorts.
On the "mouse fart" situation, I find it truly amazing how stocks like Google (GOOG) can get the volatility totally sucked out on expiration day. But it's not just the big June open interest at the 390 strike that creates the peg - it's the fact that (for whatever reason) trading volume in the underlying often disappears on expiration day, thus allowing the options floor to even more easily control the price action. In other words, the money managers/institutions seem to step aside on witch day. Reminds me of the old joke about the sharks in their people-eating feeding frenzy sparing all the lawyers out of "professional courtesy."s
Are we there yet? - David Miller - 1:24 PM
- Easy come, easy go for fans of the IBB. Up 2.6% yesterday, down 1.2% today.
- I'm struck by how often expirations -- particularly witches -- are pivot points in the market.
- Is it unreasonable to think the rally has legs into quarter end and then pfft?
- Only 27 advancers in the 164-stock NBI. If it closes there, the tally for the week will be 19, 33, 98, 144, and 27.
- Options backdating issues make as big a headline splash in dev-stage biotech as elsewhere, but it's simply not material to the financial health of these companies. They all lose money and it's a non-cash charge. Cash is the only financial metric that matters here. Keep that in mind before you blindly thump the next dev-stage biotech with publicized options issues.
- I'm thinking an early ripcord today sounds about right. You?
- Raise your hand if you think we need a critter graphic that has Snapper as a referee between Boo and Hoofy in boxing gloves.
Five and Ten - Kevin Depew - 12:14 PM
Earlier this week we looked at the Five-Year Yield Index, which had been banging around in the 4.9 to 5.05% range for weeks and weeks. Yesterday it broke above the top of that range. Does that assure still higher rates in our future? But what about deflation?
The chart linked above shows the near-term break above the range. A chart that provides a bit better context, however, is this one, the longer-term 1x3 chart, showing the 2001 "resistance" area at 5%. As well, take a look at this weekly chart nearing a DeMark "sell" price completion on TD-Combo. Similarly, the Ten-Year Yield Index registered a DeMark TD-Sequential sell on the daily chart earlier this week. Hmmm, very, very interesting.
Babe, I'm leaving,
I must be on my way
The time is drawing near - Todd Harrison - 10:47 AM
Oh, come on! It's STYX, for crying out loud--a classic American rock band cut from the same cloth as Journey! It's not like I pulled out Duran Duran, J. Geils or Def Leppard! And I most certainly didn't quote Air Supply, Adam Ant, Laura Branigan or Bon Jovi. So I've got that going for me.
Turning my attention to the Minx (yes, I'm a bit fried), my eyes are spying some slippy brokers (below resistance) and laggy small caps (Russell -1%), homies (HGX -1%), energy (OSX -2%), metals (XAU -1.3%) and biotech (BTK -1%). In addition, with breadth 2:1 negative and 200-days above--not to mention the 25% drop in the VXO or the massive short covering we saw--I would offer that Boo retains the benefit of our doubt.
I'll be right back--I just got all-of-a-sudden slammed.
position in metals, energy, financials
ETF Heft - William Fleckenstein - 9:53 AM
Wednesday, I was pleasantly surprised to see that (a) the gold ETF took in another 100,000 ounces, with the total ounces held now at a record, and (b) the silver ETF took in another 1.5 million ounces. What this points out: The un-leveraged "cash-type" buyers are availing themselves of dips in price, to get more exposure; while the leveraged futures traders are being forced to sell weakness. I think folks should keep that distinction in mind. People who trade futures tend to chase strength and sell weakness, and cash buyers tend to do the opposite. That phenomenon is one reason why people who trade futures usually lose money.
Just blowing off steam. - Rod David - 9:22 AM
NYSE advancing issues numbered 4 times decliners Thursday. Respectable, but also extreme. NYSE up volume was 22 times down volume. Also extreme, if not absurd. Up volume, alone, was sizeable enough to serve as total volume for an active session. Down volume's pace was equivalent to a slow noon hour. Regardless, that sort of momentum doesn't turn on a dime, which is just one reason to expect at least one more higher high.
But there aren't many more reasons than that. Thursday's rally was probably to some degree a function of position jockeying ahead of Friday's quadruple expiration session. So was some of the preceding week-long decline. It doesn't matter how much of which can be attributed to each. What's relevant is that no prior high has been recovered and no normal retracement limit was exceeded.
At this point in the pattern, timing becomes more critical than price action. If Bears haven't relinquished control, then they should rear their head Friday, or no later than Monday morning. Their energy was kept in reserve Thursday, while their Bullish opponents expended their own energy to the point of extinction. Any pullback in the interim will be viewed more as a function of buyers pausing, and not yet sellers stepping up their efforts. But if sellers aren't dominating price action soon - regardless of whether a higher high were to print first - then Thursday's bounce will gain traction.
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