Buzz Bits: Dow, Nasdaq Take a Spill
Your daily Buzz highlights...
Welcome to the Grind - Jeff macke - 3:48 PM
Greetings from the Swamps of Jersey where it occurs to me, not for the first time, that the process of making financial television has much in common with making sausage. If you're involved with the production of either, your goal is to crank as fast as you can without getting your tie caught in the gear works.
A wise man once told me that technical levels are all about the close. With that in mind, I'm keeping my eyes on the fundamentally meaningless Big Round Numbers of 11,000 on the Dow and the 1260 SPX level Todd-O has mentioned a couple of times on today's Buzz. Getting name-specific at the risk of "grinding" salt in any fresh, Red wounds, I'm also eye-balling the off-tested $45 levels at Wal-Mart (WMT). Can the bears finally break the Bentonville behemoth?
Stay tuned, good Minyans. It's looking like a deeply weird earnings season is coming our way.
Bring it Home Buzz - Todd Harrison - 2:59 PM
- It's stickier than Kenickie at a high school dance as we edge towards the end of today's fray. I'm referring to the weather in Gotham but I suppose I could be talking 'bout today's tape as well.
- The curious traction in Weatherford (WFT) is keeping a bid to the energy patch.
- Tapes that are heavy all day tend to end that way. Look for sell stops below S&P 1260.
- Bear markets aren't straight up or straight down. They're haphazard, frustrating, demeaning and demoralizing.
- Frustrated? Take it out on a softball during the rubber match at MIM3. Hoofy's Heroes vs. Boo's Bandits. It's gonna be a sizzler!
- The dollar will inevitably fail as an intraday tell but man, it's been rather snazzy in its predictive powers.
- How do you shoot a devil in the back. What if you miss?
- Liquidity could remain light and tight through the rest of the summer, which lends itself to an uptick in volatility.
- How much do you think it'll cost to have Farley eat a plate of Snausages?
Checklist for a Drop - Rod David - 1:36 PM
Yesterday's rally had originated during a "no-bias" environment, which required its complete retracement. Check.
Last week's highs double-topped with each other. A 61.8% retracement back into the range is a normal correction of the pattern's second downleg. This level was met overnight. Check
The Double Top's interim low last Wednesday has been pierced three times intraday. A close under it would seal a top. Check?
The lowest test of last Wednesday's low was reached yesterday morning. A close under it would signal that momentum has reversed down. Still checking...
Global tensions flaring. Double-check!
Before I take some time off - Fil Zucchi - 1:08 PM
Some thoughts before I head out for a few days of fun and games:
- I am not suggesting New Zealand is going bankrupt, but Monday the Kiwis joined Iceland in a failed auction of 6-month bills.
- Coincidence or not (and the India bombings might have been another factor), the BOJ gets cold feet and talks down its plan to move away from 0% money policy.
- FItch's quarterly review of the housing market continues to guess a soft-landing, though recent sale and order trends are significantly lower than there forecast.
- Garmin (GRMN) is weak this morning on comments by the CEO that prices are falling faster than costs. I continue to think this company will be a major train wreck at some point, but I just can't find a reasonably safe way to play it.
- Whole Foods, Inc. (WFMI) is now showing dandruff in the daily and weekly charts. Is the hourly chart next? Prof. Gilmartin and I, have debated the fundies of this name before (here and here).
- Just to state the obvious, the Naz 100 (NDX) is at critically important levels.
I'll be back in the 'Ville on Monday.
Position in QQQQ, WFMI, homebuilders
Trouble Brewing - John Succo - 10:44 AM
Traditionally, home loans have been non-recourse loans: if a home-owner could not make payments and the bank foreclosed on the property, the bank could not go after your other assets if any losses were incurred.
I want to remind all that this of course has all changed in the last five years. Now that most refinancings and "home equity lines of credit" are going to finance secondary purchases and the leverage is the highest in history, the rules have changed at the peril of the little guy.
Now most (if not all) of home loans are recourse loans: if the bank forecloses and loses money on the resale of the house the bank can go after the homeowners other assets to settle the difference.
This does not matter now with defaults still low. But they are growing and at a certain point this fact could create a spiral effect and crush consumption.
See Dick Speak. See Tech Rally... - William Fleckenstein - 9:26 AM
At about midday yesterday, with the market hovering on its lows (down close to 0.75%), CEO Richard Wallace of KLA-Tencor (KLAC) told a group of dead fish that the company's bookings (which, oh, by the way, are cancel-able) looked to be higher than previously forecast. That sparked a rally in KLAC, and it also lit up tech across the board -- as the Sox was up 3% (and even Intel (INTC) jumped 2% in five minutes, on the back of the KLAC quack). But, while the Sox's gain seemed to be enough to drag the Nasdaq and the other major averages into the plus column, it was unable to turn housing green. I guess even fantasy has some limits.
Bask in the Glow, Afore Down They Go
As to the question of whether yesterday's bounce was meaningful or just more noise, I really have no idea. If such a meaningless rearview statistic as last quarter's bookings was good enough to turn the tech tape, maybe it was due for a bounce, and this was the scrap of news that provided the excuse. In any event, it's hard to see how many individual tech stocks will escape serious testing as we go through earnings season. Meanwhile, yesterday was obviously a better day for the bulls than the last few have been.
Position in INTC
C'mon 7! Lucky number 7! Please 7? - Jason Roney - 8:38 AM
The Nasdaq-100 has six lower highs on the daily chart to start the month. This happened just twice before in the last ten years:
October 1998 and August 2004. From the close on the sixth day, the index was higher at month-end both times and the max downside close from that day through the remainder of the month was not worse than -1.5%. Only two occurrences, so take with grain of salt. But interesting to point out how rare it is to see this kind of pressure to start a month.
What you need to know... - Jon Doctor J Najarian - 7:58 AM
The EU fines Microsoft $357 million – That might sound like a whopper, but when you make $12 billion per year, or $33 million per day, 365 days a year, it's less than 11 days worth profit! The EU imposed daily fines of $1.91 million from Dec. 15 to June 20 when it decided that Microsoft was still violating EU laws.
Delphi Cuts Loss In Half – This time last year Delphi reported a $4.8 billion loss or $8.59 per share, but in their much-delayed report filed yesterday with the Securities and Exchange Commission they said the loss had shrunk in 2005 to $2.4 billion. Delphi , has more than tripled from the March 2006 lows.
MySpace Beats Google & Yahoo For Top Web Site! Maybe Sergey and Larry should have spent more time figuring out what appeals to young websurfers rather than working on their 767 party plane! According to Hitwise, Online teen hangout MySpace.com ranked as the No. 1 U.S. Web site last week. Looks like a steal for Mr. Murdoch, who purchased it last year for $580 million.
Position in MSFT
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