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Buzz Bits: Dow, Nasdaq Suffer Big Losses


Your daily Buzz highlights...

Editor's Note: This is a small sample of the content available on the Buzz and Banter

Bring it Home Buzz - Todd Harrison - 3:41 PM

  • Minyan: "Hey Toddo, why are the drillers getting whacked?" Toddo: "You mean, other than the fact that I dipped my wick into this Weatherford (WFT) slippage?"

  • IF (very big if) this is a successful retest of the June lows (S&P 1220), the other side of this downside right could be a sharp stick in Boo's eye. I mean, who the heck wants to be long right now?

  • Another day, another 27% pop in the VXO! While slippage into earnings doesn't always portend a rally on the news, further meltage would be helpful, from a field position standpoint, for a potential offsides

  • Look at the homies hug nine-deuce (HGX 200). A fail through there would be (yet another) technical feather in Boo's cap.

  • Who wears feathers in their caps anyway?

  • The next level of lore for the piggies so sore? BKX 104.90, which is the 200-day.

  • As always, I hope this finds you well.


Fear Not - Adam Warner - 2:06 PM

Interesting downtick in the VIX/VXO ratio.

The VIX measures volatility in the S&P 500, the VXO in the S&P 100. But the two indices basically move in lockstep. A more important distinction is that the VIX incorporates a wider range into its calculations. Which by definition makes it more sensitive to overbidding of OTM puts.

So ergo, relative outperformance of the VIX is suggestive of excess nervousness. And right here, right now, we are seeing just the reverse. In fact this ratio is at its lowest level since March.

If there is a rush towards puts, as some loud pundits are claiming, it is not readily apparent by this measure.

I'm not making this up! - Kevin Depew - 1:35 PM

The Dow Jones Industrial Average has given a sell signal today on a PnF basis on the 50x3 charts, and on the 25x3 chart it has violated the minor trendline that had been established from the recent June lows.

In other news, a rocket launched from Lebanon exploded in the port city of Haifa, but reportedly did not cause casualties. There is growing speculation about the severity of any potential responses from Israel and very real possibility of all-out war... if that is not what we have already.

Soaring Above a Stock Fracas - William Fleckenstein - 11:11 AM

"Ask Fleck" readers know that I've received a zillion comments and questions suggesting that metals and metal stocks will decline with the stock market. My contention has always been that the real reason to own these is because the dollar will become unhinged. And, when the metals rally for that reason, metals and metal stocks will not be impacted by a sliding stock market.

Obviously, since the dollar was strong, that wasn't yesterday's thesis. But if we can start to see days when the metals do well in the face of a weak equity market, then that may precipitate even more buying, and become a little self-fulfilling prophesy, as far as metal stocks go. I don't want to make too much out of a single morning (especially one with strong-dollar crosscurrents), but I did want to make note of it.

Do, or Die - Rod David - 10:58 AM

Breakouts reflect one side of the supply:demand equation overpowering the other side. But while still fresh, breakouts also reflect a "rallying cry" to the other side, calling for reinforcements to defend against the attack. Wednesday's close is no exception.

After three consecutive sessions of probing last Wednesday's low as support (the interim low of last week's Double Top), yesterday's fourth probe finally closed lower. And this morning's gap down reflects the validity of having finally broken the interim low.

But now the breakout's initial target has been met at this morning's low, and the gap back to yesterday's close wants to be filled (that's not required, but it never hurts to ask). The gap itself reflects a great deal of selling pressure being expended, and the target reflects a great deal of selling pressure being satisfied.

Simply rallying back to the gap and failing to close above it would not be bullish. The close remains to be seen, and sellers are vulnerable. But any recovery above SPX 1254.50 (ESu 1262'00) would give buyers a chance to regain control, and also send a "rallying cry" to sellers.

Homies are toast - there I said it - for the 100th time - Bennet Sedacca - 10:19 AM

I mentioned here the other day I thought the Homies would break DOWN from their consolidation. And they have. See the chart here. They have. They keep following the weekly bubble IMPLOSION chart, soon to be followed, if not already, by fundamentals.

This affects the economy, the market, the consumer and will cost lots of folks cash. Sorry but that is how I see it and have seen it for a year.

And oh yeah, did I mention who was holding all those crappy, exotic loans? Look out financial sector. Yeah, not a happy view. But like I always quote the legendary George Soros, 'Investing isn't supposed to be fun.' I live by it.

Ho, Ho, New Lo! - Jason Goepfert - 9:28 AM

Yesterday was the first time in 946 trading days that the Nasdaq 100 hit a new 52-week low. The only other time in the 20-year history of that index that it went more than 3 full years before hitting a new yearly low was November 10, 2000.

Obviously that doesn't sound very good. But given the index's short history, it's hard to read much into it.

This isn't directly applicable, but if we use the Nasdaq Composite instead, then we see four occurrences since 1971. Six months later, that index was higher each time by an average of 24%. So maybe by the time we drop enough to get the Comp to hit a new low, it'll finally be a decent buying opportunity.

What you need to know... - Jon Doctor J Najarian - 8:05 AM

Sony & Bartelsmann Merger Back to Drawing Board - An EU court overturned the European Commission's approval of a merger between the music units of media giants Sony and Bertelsmann AG that created the world's second-largest record label.

Tribune (TRB) Earnings Net Drops 62% - Let's see, they throw the company's debt into junk status with this ludicrous stock repurchase and now they've devalued their Atlanta and Albany television stations so badly that they will get bottom dollar for those two properties which are on the block. Kind of like breaking all the windows in your house before you put it up for sale.

Marriott Profits Up 35% -2Q net income of $186 million, or 43 cents a share, up from $138 million, or 29 cents, earned in the same period during 2005. Quarterly revenue reached $2.85 billion, up 7% from the prior year's $2.66 billion. Shares closed at $37.37.

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