Buzz Bits: Dow, Nasdaq Tumble
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Earnings Report - MV News
Nike (NKE) reported Q4 EPS of $1.39 (in-line) on revs of $4.00 bln vs $3.98 bln cons. Global futures orders were +5% while U.S. futures orders were +9%. Gross margin was 43.8% vs 45.2% y/y and 44.2% guidance.
Supporting Hand - Kevin Depew - 3:14 PM
- Minyan CC asked about the PnF support level for the SPX, which is 1240 (5x3) and it takes a move to 1235 to "break" it.
- Minyan MO notes regarding Buffett that "in watching Charlie Rose last night, I didn't have the same impression of Buffet's future in investing. Gates will run the foundation with his wife. Buffet will continue to do what he does best, invest."
- Minyan RS asks for a PnF update on Schlumberger (SLB) - held trendline support at 55, new buy signal today; Patterson-UTI Energy (PTEN) - already violated trendline support, remains negative; Weathorford (WFT) - remains on a sell signal with no new buy signal until 51; and Nabord (NBR) - already violated trendline, remains on sell signal.
Position in SPX equivalents
What's on the Tube? - John Succo - 2:21 PM
I was forced to listen just now to a debate on TV on housing. Actually it wasn't much of a debate for one used logic and one used typical rhetoric. You can guess which is which.
Here is one comment often used to support the thesis of rising housing prices: "The fact is the number of households is growing and people are going to need a place to live."
This illustrates a clear misunderstanding of how markets work. What good does it do for a person who is forced to sell his house now because he can't afford the mortgage (when ARM converts) to know that eight years from now the price of the home will go up? And how do we know the price won't be higher after it first goes down 50%?
This economy is in a great struggle right now between fiat currency and deflation, between the rich becoming richer and the poor becoming poorer. Wealth is being re-distributed around the world and guess who is winning?
Flat footed and confused - Fil Zucchi - 1:25 PM
Why today's sudden sharp move? Are the chips (-4%) leading the market by the nose? The banks are holding: is Hoofy just laying a trap? Is the Naz 100 (NQ) breakout of its sideways pattern the tell, or are the Russell 2000 (ER2) and S&P 500 (ESU) still signaling that the real move is yet to come?
The commodities have reversed hard intra-day and yet Brazil is up 1% and the India Fund (IFN) and Templeton Russia Fund (TRF) are trading green. My gut says Sammy is still firmly in control and won't pass the baton until after the Fed ouija board session ends on Thursday, but I have been caught flat (trading wise) by today's swing and I'm hesitant of turning a missed opportunity into a loss by pressing.
Wow, that's a lot of bears - David Miller - 10:20 AM
To put the NASDAQ short interest gain of 11.42% in a single month in a bit more perspective:
- One year ago, the number was 5.84B. This is a 23% increase YoY.
- There are 45 fewer companies listed on the NASDAQ now than in June 2005.
- In January of 2003, there were 4.05B shares short. That number has increased by 77%. The NASDAQ has gone from 1439 to 2072 (+43.99%) in the same period.
Wide Left - Adam Warner - 9:52 AM
Nice of them to finally list options on the Emerging Market Fund (EEM). But it only trades on the CBOE and AMEX now, which means you can drive a Mack Truck through the bid-ask spread.
How wide? The EEM itself is about 4 cents apart bid to offer, yet the July 90 calls are quoted $2.15 bid, $2.65 offer as I write. Now if I were standing in that crowd, I would love it, but I thought the days of publishing markets like that were long gone.
So my question is why are the other exchanges not listing this now, and even in the absence of that, how do they get away with quotes this wide?
Position in EEM
Morning Dew - Todd Harrison - 8:29 AM
- I'm all for jury duty but if they're gonna allow personal computers while the paint dries, they should at least offer Wi-Fi for so I can read the Buzz! I'm having some serious critter D.T's!
- I returned to my turret last night once the ticks stopped flickering and found a snapshot of a lazy grind higher. The homies, small caps, metals and energy all out-performed the broader averages which, as it stands, remain nestled under "collective resistance" while working off the oversold condition.
- The obvious focus (foci?) for the rest of the week is two-fold. We've got the upcoming FOMC (bring your thesaurus) and the frenzy that is quarter-end.
- Speaking of catalysts and trading style, vols have now retraced more than 50% of the June upside explosion. As I believe that volatilities will trend higher, I wanna use them to help define my risk when I proactively position anew.
- There are alotta unhappy hedge fund campers out there and war stories will likely edge into mainstream circles as the ink dries on the Q2 spew. The question, from a trading standpoint, is two-fold: Structural (contagion vs. containment) and psychological (which, if any, sectors are the most likely mark-up candidates).
- I'm chewing through a morning Randoms before heading back to City Hall. Take me at my word--I wish I was diggin' in beside thy faithful today. But, (jury) duty calls and I've never been one to run from my civic responsibilities. No, really!
Position in metals, energy
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