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Buzz Bits: Dow, Nasdaq Drop

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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

Electronic Arts
(ERTS) reports 1Q EPS of ($0.12) ex-items vs. ($0.24) cons on revs of $413.o mln vs. $336.6 mln cons.

Computer Sciences (CSC) reports 1Q EPS of $0.61 in-lineon revs of $3.56 bln vs. $3.52 bln cons.


Bring it Home Buzz - Todd Harrison - 3:26 PM

  • A CEO's job is never done! I was just asked to make an executive decision on the softball keg. I rubber-stamped Stella, as Chachi is a big Streetcar fan!

  • Look on the bright side. Despite the crimson fright, a few trends continue to stand out (and offer opportunities). Our trading trifecta comes to mind.

  • Levels of lore into the close? TRAN 4294, GOOG 377, XBD 207-209 (50- and 200-day), NYC 100 (in the shade).

  • Tapes that are heavy all day (with 2:1 negative breadth) tend to end that way. It's not absolute but it certainly begs for attention if you're hoping.

  • My biggest mistake through the years when trading? Not syncing my time horizon with my risk profile. Learn from my losses rather than repeat them.

  • There's a lot NOT to like about the homies (lower highers, obvious slow down, consumer crunch, macro headwinds) but, pure eyes, they've sure absorbed alotta bad news these last few weeks.

  • The opposite of love isn't hate, it's apathy. Anyone who traded through the early 70's will tell you that.

  • I'm gonna flip lids and juggle struggles as I ready for a five-some on the close. No, not in a Vince sorta way (I'm engaged), in a mind meld sorta way. It's all good--it's just...well, it's a lot. Hey, nobody said it was gonna be easy and if I've learned anything over the years is that tenacity, passion and resolve are the tie-breakers of success. You gotta want it.

  • May peace be with you.

    R.P.



Chart thoughts from the dark side - Fil Zucchi - 2:38 PM

  • Harrah's Ent. (HET): This is bad but very very oversold on both daily and weekly time frames. I am not showing the Bollinger Bands to keep the chart from looking like a plate of spaghetti, but the price has been scraping the lower band for weeks.

  • Las Vegas Sands (LVS): HET's twin brother. Not quite as oversold on a weekly chart. The fact that we have two very similar charts in the same group introduces the idea that there may be industry issues on top of company specific weakness.

  • iShares Transport (IYT): This is flat out scary - or exciting - depending on your tendencies. Note today's gap down after a failed attempt at a rally, and the volume surge since the move down began.


Positions in HET, LVS, IYT



Gold Shares Update - Adam Michael - 12:27 PM

The reverse dandruff I spoke of last week is still in play for many of the gold shares. Kinross (KGC) is trying to lead by example as it attempts to break through its neckline (see the chart here). I see the larger head & shoulders (also in many of the gold shares, HUI, and XAU) topping pattern going back to December, but am wondering if it is a bit too obvious.

Others I like with similar charts are Yamana Gold (AUY) and Golden Star Resources (GSS). Volume should pick up any breakout…if it does not, the moves should be treated as suspect.

Positions in KGC, AUY, GSS


Can I go home now? - David Miller - 12:03 PM

  • If one day of dealing with arcane biostatistics gives me a headache, how many days will it take to make my head explode? I'm sure someone, somewhere could calculate the conditional probability of that, but right now looking at one more stats spreadsheet would likely kill me.
  • The NBI is down this morning, but the BTK is getting whacked. Affymetrix (AFFX) is down 15% this morning on an earnings miss, downgrade, and options grant issues. AFFX was pulled from the NBI at the last rebalance, so there's your differential.
  • Getting on the plane to Vail can't come soon enough. Too bad between then and now I have about a dozen conference calls and a many dozen pages of text to write. Oh, and plumbing for our new kitchen to rough in before the plumbing inspector arrives.



Just so you know....and we love to tell..... - Bennet Sedacca - 10:31 AM

You know I am an advocate of a slow economy. It is hard as can be to buy 2's through Fed funds, and we already are carrying a sizable position.

But the action in many important sectors tells me my thoughts of economic slowing/recession are around the corner. So we added more today. We went to an overweight position early today, but a prudent one as 2 year notes ain't exactly sexy. I still think 5% coupon plus appreciation as the weakness is realized will bring us TOTAL RETURN (see chart over 6%) which I am betting that in hindsight down the road will be sweet.

On another note, I have noticed prepayment speeds on my ARM pools that have been adjusting in the faces of real estate speculators shrinking from very fast as they flipped condos and houses to near zero. A true way to know that housing is dying. Refi's are dead.

Position in 2's


CME Update - July Volume Looks Good - Brian Gilmartin - 9:30 AM

Chicago Mercantile Exchange (CME) reported strong July contract volume this morning, up 41% year-over-year. (See attached spreadsheet)

CME and the exchanges have been one of the market's leadership groups off the March, '03 market bottom, but have languished since the May market top.

The CBOT (BOT) reported 25% volume growth this morning, which is pretty good for that institution, although well behind the CME's y/y growth, but that is expected given the BOT's limited Treasury and grain contracts menu, versus the CME's equity, Eurodollars, forex, and meat-based contracts.

The CME has been hovering around its 50-day moving average on light volume. A break above $505 (now representing a double-top) would likely mean we see $550 on CME.

The Nasdaq (NDAQ) is my frm's only other position in the exchange group, as it continues to take share from the NYSE.

Position in CME, NDAQ


Deutsche Bank - John Succo - 9:02 AM

Deutsche Bank (DB) is an important tell...

DB lost money in their capital markets division. Simply put, they lost money "trading." They are not alone.

Banks and dealers are having trouble making money the old fashioned way, so they are taking much more risk trading these days. I mentioned last week that while regional banks do not have near the ability to do this, large money center banks and dealers often increase their risk to make money just at the wrong time.

DB lost money doing it. Many other banks like JPM and BAC have so far been doing OK, trading (at least what they have admitted to for these banks can remark their loans and derivatives for a while to make things look good), but it does not mean they have not increased their risk.

While DB lost money this time, these other banks might next time.

Risks have increased significantly in owning bank stocks.

Position in DB, JPM, BAC


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

Carlyle Group Enters Hedge Fund Biz - According to published reports, Carlyle is close to hiring Ralph Reynolds, the head of prop trading at Deutsche Bank to lead the new unit.

Northwest Faces "Industrial Action" After Attendants Reject Contract – Back in the day they used to call them sickouts and that's what Northwest faces after flight attendants rejected a proposed new contract for the second time and warned passengers to expect disruptions.

Avon 2Q Drops 54% - Avon Products (AVP) profits falls 54% to $150 million as the world's biggest direct seller of beauty products blames charges from a restructuring program aimed at reviving lackluster sales.

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No positions in stocks mentioned.

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