Buzz Bits: Dow, Nasdaq Take Hit
Your daily Buzz highlights...
Turnaround Tuesday? - Kevin Depew - 3:57 PM
Once again, with this kickoff down following failure to get to 1300, the SPX 1250 level becomes important. As Toddo noted, we are no longer particularly oversold (on a daily OR weekly basis) and this makes 1250 as a critical stopping all the more important. A move below 1250 (1245 print) for SPX would break a spread triple bottom. (See the chart here). Moreover, on a daily DeMark basis, although we have a TD-Sequential 9 buy setup from May 23, we have only begun a countdown to potential price completion. This, along with the negative context of the PnF indicators, tells me the probabilities are that any bounces we see in the coming days will be short lived affairs with lower prices still to come.Position in ES/U6
Recession vs. Inflation - Which Do You Prefer? - Brian Gilmartin - 3:00 PM
I just finished the book, "Richard Nixon" by Richard Reeves, and in the book, when Nixon did worry about domestic policy (and that wasn't too often) it was usually around the election cycle and his common mantra was that Americans could typically swallow a little more inflation easier than they could a little less growth.
This market action now reminds me of what happened in late 2000, when Greenspan sat on the slowdown much too long, and the equity market took it in the teeth, albeit with the correction starting from a much higher valuation level, particularly in the large-cap stocks, than the valuations we see today.
The fact that Bernanke "sees a slowdown but stresses inflation fight" (according to one headline) isn't comforting, and the stock market is giving us the first signs of that discomfort.
Still, I have to say that today's equity market valuation is a lot more palatable to sit through than what happened in 2000.
They Call it... - Todd Harrison - 2:17 PM
Contra-hour has begun with nary a critter having fun. Today's fray has been the definition of fluxy, with the Minx drifting slowly lower and the sector action slinky at best. Indeed, with the metal equities fading towards a date with Red Dye, the last bastion of green is about to flip a crimson switch. A sharp cookie once said that "breadth don't lie" and, with the internals 2:1 negative, he seems to be earning his keep today.
Some top line thoughts:
- I pared both sides of my book today, selling a slew of my upside metal exposure and unwinding some of my piggy puts in sync. I've still go the bet on, mind you, but it's smaller than it was and I'm alright with that.
- The brokers, which were the Cliff Branch earlier, have fallen under the weight of supply (XBD -1.5%).
- Meanwhile, up in Boston, the Red SOX have slipped 2% from atop this morning's standings.
- And, as Bennet, Fil and other's have noted, the Art Carnage in the homies continues (HGX -3.5%).
- For what it's worth, and as I've written, I've been in the housing bubble camp for a while. And, along those lines, I do NOT believe energy and metals fall in the same camp.
- Bernanke comments on the tape--lemme hop and digest 'em before my 2:30 meld begins.
Position in metals, energy, financials
Why would I want to contradict myself? The difference between trading and investing. - Bennet Sedacca - 12:45 PM
See my piece from earlier today and you will see one does not need to be a rocket scientist to notice that housing stocks are following past bubbles. That is a view from an INVESTMENT perspective.
But see this chart. It is the same S&P Supercomposite that has puked an additional 4% today, taking us to an oversold point at long-term support. So a trader might take a stab (with a tight stop) for a bounce in here, particularly if my 10 year call continues correct and rates head lower near-term.
Long-term, IMHO, they are still toast.
The State of The Markets - Phil Erlanger - 11:10 AM
The NASDAQ 100 and the S&P 100 moved higher last week. The Dow Jones Industrial Average, however, pulled back a bit. The daily Squeezeometer signal for the NASDAQ 100 Index moved from sell/short to cash/speculative buy. The S&P 100 Index moved from sell/sell short to cash/speculative buy.
Our 14-day choppiness index for the NASDAQ 100 Index moved from 28 over the past week to 55. This index ranges from 0 to 100, and the lower it goes the more a trend is evolving. The NASDAQ 100 is now building up energy and is in a choppy phase. The S&P 100 choppiness index moved from 36 to 52. The S&P 100 moved into a sideways pattern similar to the NASDAQ 100. The NASDAQ 100 and the S&P 100 moved above their DMA channels.
Morning Dew - Todd Harrison - 8:57 AM
Into the blink-and-ya missed it pop early Friday, I made a round of sales as we approached NDX 1635 and S&P 1300. I didn't go nuts, mind you, I simply repositioned some risk around my core thesis that energy and metals are relative winners vs. tech and financials.
In that vein, I entered today's fray with a spate of the former (Weatherford, Golden Star, Goldcorp, Pan American)--which I'll pare into liftage--and nibbled anew on some IBM puts (is that dandruff in Big Blue?) along with some further autumn paper in the piggy complex. Just tradin', and doing so with discipline on my mind and alotta dry powder in my pocket.
Speaking of the metal complex, the Peruvians have spoken and Alan Garcia has been elected as the new Prez down south. That's a sigh of relief for the Nationalization crowd although, as Adam Michael recently noted, some black lung might still linger, pop.
Be that as it may, he was clearly the lesser of two hoarding evils and we may see some reactive traction in the XAU today. That, along with (all-star guitar signee) Jim Roger's rosy assessment in Barron's that the commodity boom has another eight to 14 years of life, will surely put some jitter in the bug's early step.
Good luck today
position in wft, gss, gg, paas, ibm, financials
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