Buzz Bits: Dow, Nasdaq Win Big
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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
Jabil Circuit (JBL) reported Q3 EPS of $0.36 vs $0.35 cons on revs of $2.592 bln vs $2.57 bln cons.
Bed Bath and Beyond (BBBY) reported Q1 EPS of $0.35 in-line on revs of $1.40 bln vs. $1.39 bln cons.
Today is a UUD - Woody Dorsey - 4:04 PM
Today looks like a UUD, a universal upday. Everything is up.
This is symptomatic of generic risk relief. As such, it probably does not mean much..or at least not as much as some media folk might posit. Ho Hum, stocks are still in a bear market. One of the clues we are looking for - and may be getting it today - is to see XAU outperform and de-link from other equity indices.
This would support a semiosis (changed meaning) in which case, the inflation trade can become more pure. Liquidity can withdraw form paper and inhabit the hard asset area again.
Positions in Metals, Bean Meal, Olive Oil and Bordeaux.
Hot Off the Press - A GTS Exclusive - Sanjay Somaney - 3:35 PM
Reliance Communication Ventures has obtained a contract with Duetsche Telecom to sell 200 gigs of bandwidth over the next 8 years. Reliance will provide an undersea cable link between the US and Europe and would deal with DT's broadband business on the two countries.
I have not been able to find out the contract value as yet.
Videsh Sanchar (VSL), SingTel and C&W were also bidding for the contract.
Position in VSNL
So let's get to the point and roll another Buzz... - Todd Harrison - 3:27 PM
- I hear ya Mr. Petty and I'm secretely rooting for you to crack the top five of our all-time greatest rocker poll! While Spyder tallies the totals--and as I pull together the many pieces of my travel puzzle--I wanna take the time to share some end-of-Hump thoughts.
- I understand that some glitches remain on the Buzz 2.0 rollout but trust me, nobody at MVHQ will sleep until we're golden.
- While I've sold a LOT into this rally, I've done so as a function of a freaky few weeks of travel in front of me. I leave on my "cores" in the metal and energy space (including Golden Star and Weatherford) and will balance that with some autumn JP Morgan puts. I've got other "situations," granted, but I share what I can, when I can and how I can.
- Another day, another 12% move in the VXO. Is vol of vol a precursor to....vol? I think so.
- Setting stops removes emotions. It also keeps you in the game when you're wrong, which is par for the course. Heck, if there wasn't risk, it would be called winning rather than trading.
- Good luck on Fast Money, Macke--while I've got a face for radio, you're a natural for the small screen.
- I can't shake the feeling that we're gonna see a spate of M&A activity in short oder.
- And finally, many thanks to our friends at MarketWatch for their continued vibage. Its been a pleasure sharing content with ya!
- Fare ye well into the bell, my friends, and be prudent and wise with them trading eyes.
Junk Bonds - John Succo - 2:46 PM
Junk bond credit spreads on average have widened dramatically since April.
They have widened by 90 basis points from 285 over to 375 over and by 25 basis points just in the last week.
This is a function of lower liquidity and risk reduction despite what you are seeing in stock prices today.
Hurry Up and Wait - Fil Zucchi - 1:59 PM
It has taken me almost an hour to write this Buzz, because I can't think of much to say. The meat of today's move is probably in the books, so I am basically sitting on my hands as far as short term trading goes. I have/am selling in scale calls against some of last week's buys - Akamai (AKAM), Goldman Sachs (GS), and some of the energy names, but that goes into the scalping category more than anyhting else.
Have you noticed how financial media has stopped inventing an inverse relationship between oil prices and stock prices? And did you know that the Oil Services Index (OIH) has had a greater than .70 correlation to the S&P 500 (SPX) and the Russell 2000 (RUT) since April 1?
Positions in AKAM, GS, OIH, SPX, IWM, energy names
Buzzles - David Miller - 1:13 PM
- Breadth on the NBI is a minty 132 to 31, but 41 of those gainers are less than 1%. 76 of those gainers are less than 2%. That means I've got a lot of stocks green on my screen by a couple of pennies. Color me part skeptical and part hopeful -- which I guess would be some sort of plaid...
- Best thing about the new Buzz app? It runs fine on Mozilla's FireFox browser. That means I don't have Internet Explorer polluting my screens.
- 70-ish continues to be an important support for the IBB.
- I told some people the other day that I hadn't been on a real vacation (defined as not needing to be near an internet connection so I could work if something popped up) since 4 days in 2000. The look I got wasn't, "Wow is he dedicated." The look was somewhere between pity and "Wow, is he a moron."
Oversold(er) - Kevin Depew - 12:04 PM
Looking at the S&P 500 and where we are in daily DeMark terms, the SPX recorded a TD-Sequential buy setup on May 23. Since then we have made some work toward price completion and an actual TD-Sequential buy signal, but we are still not there yet. In fact, we are at best (depending on today's action) only a little more than halfway there.
The same is true of all other broad indices I pull up, and even among the sector indices, which in some cases look worse.
The HGX failed to hold price completion buy signal risk levels on the daily charts. Although it did recently register new buy setups on both daily and weekly charts. The HGX illustrates the risk of trying to play rallies, which are in many cases now counter-trend, even when oversold readings register extremes.
Fed-Ex and Market Action - Brian Gilmartin - 9:03 AM
My firm likes the fact that the market has consolidated around the original May 24th low of 1246 on light volume, but we'd feel better if we could move above 1246 and stay there.
Although we haven't updated our spreadsheet yet with the results, Fed-Ex's (FDX) numbers look very good, as does guidance; although there is some question about employee stock option expensing. Guidance looks to be significantly above consensus for q1 '07, and 2007's analyst consensus numbers - per our piece yesterday - look to have discounted a slowing in both revenue and eps growth of the last few years, thus q1 '07's guidance looks to be a pleasant surprise.
As we wrote yesterday, average daily package volume came in at 4%, led by International and Ground. Yields would have to have been a positive contributor, although (again) we have yet to see the hard data.
FDX and the trannies have been a leadership group for this bull market, so FDX's trading action today in light of results will give us a good tell on the state of the market. The 200 day exponential moving average and the 50 week moving average both reside between $100 - $105 per share, so if FDX sinks to that low, in my opinion that would represent a good entry point.
Position in FDX
Keep Your Eye on the Ball... - Greg Weldon - 8:09 AM
The Turkish Lira is getting slammed this morning, making new move lows and breaking down versus the USD (and the EUR), as the move towards intensified risk profiling in emerging markets continues to build momentum.
Today's downside acceleration in the Lira comes on the heels yesterday'sTurkish Central Bank Monetary Policy Committee meeting, in which the CB failed to meet the market's expectation for a rate hike.
Perhaps more 'telling' is today's breakdown and deep decline in the South African Rand versus both the USD and EUR.
Indeed, the long-term technical picture in both the Rand and the Lira have turned decidedly negative, following the path laid out by the Icelandic Krona, which also remains under selling pressure following the release today of a larger than expected rise in wage inflation.
We will cover these currencies later today in a special Minyanville technical focus, but for now, remember to Keep Your Eye on the Ball, as intensifying disinflation in top-performing emerging market currencies is a macro-sign suggesting that ALL monetarily reflated markets are at increasing risk of striking out.
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