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Buzz Bits: Dow, Nasdaq Close in the Green


Your daily Buzz highlights...

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

Shopping WITH Sears - Herb Greenberg - 2:37 PM

Now the world of retail will try to determine who'll be the sitting duck for Sears Holding (SHLD), which plans to go on a buying spree. I've long opined that AutoZone, a Lampert-controlled company, would be a natural to compliment or replace the Sears Auto Centers. Other analysts today are saying the same thing. (Boy, aren't I the genius -- Not!)

But as I point out on my blog today in MarketWatch, keep an eye on some of the more broken down brands that have Sears-like attributes in that they have bad fundamentals and they're always tripping over their own shoelaces. One company that would fit that bill, especially if its stock continues to slump, would appear to be Radioshack (RSH).

Others? Let me know! (Macke, no doubt, will have opinions.)

Analog Update - Jason Roney - 2:10 PM

I can always tell by the responses to analogs I post that some don't always "get the best way to trade the analog." We noted this week that the SPYder closed lower 72 percent of the time on an expiry Friday, TRADED lower 100 percent of the time by an average of -0.58 percent, and CLOSED lower just 72% of the time.

Now I look at that stat and figure there is at least one trade to the short side intraday. So when the SPYder actually opened higher this morning there was EXCELLENT risk/reward for a 0.5% or so intraday short in my opinion. And from the open there was roughly 0.45% drawdown. Thus the trade setup may not give us the lower close but still offered a good risk/rewards setup.

Ford's Production Cut and China's Rate Hike - Brian Gilmartin - 12:26 PM

Ford's (F) North American production will ripple through the GDP data, and probably fairly quickly as the supply chain takes it in the gut.

Years ago, it was said that auto production was 3% of GDP, but it could actually be higher now, given the 17 million in auto sales annually, and the fact that Japanese manufacturers have relocated plants in the US to hedge exchange rate risk.

No surprise that Treasuries are rallying today.

The other thaught that crossed the concrete between my ears upon hearing that China boosted interest rates, was that this was an incremental negative for crude oil, if the rate hike reduces Chinese demand.

Crude oil is hanging by a thread near $70 per barrel.

Position in XLE, OIH

We have nothing to fear but Google itself - Vitaliy Katsenelson - 11:28 PM

As I have written in the past, though Dell (DELL) appears to be cheap relative to its past valuations, I believe it is not cheap on an absolute basis, which is more important for range bound markets.

If Dell decides to take a recommendation from Barron's and start opening new stores, it will be a kiss of death as it will give up on its last competitive advantage. Just take a look at Gateway (GTW).

I believe Microsoft (MSFT) is a much easier play on the computer sector. Its valuation is very attractive, 14x earnings (excluding cash that is going back to shareholders through stock buy backs and rising dividends). It also has a Google-will-take-over-the-world discount built into it, which I believe will dissapear a lot sooner than later.

Another stock that becoming more and more appealing through valuation (though not there yet) due to Google (GOOG) fears is Ebay (EBAY).

Dollar Squalor? - Kevin Depew - 10:39 AM

Yesterday, Toddo, Scott and John discussed aspects of deflation - higher bonds, higher dollar, lower stocks, lower commodities, etc. And I don't know that we've ever received as much disagreement here in the 'Ville from those who are adamant that the dollar cannot go higher.

The puzzling thing to me is that dollar bearishness is so entrenched that it seems many are ignoring what the chart is saying.

Since making a low on May 15, the US Dollar Index has made not one but TWO higher lows, registered a DeMark daily TD-Sequential buy signal, another TD-Sequential buy setup on August 7, and has refused to challenge the initial May low even AFTER the Fed signaled a pause and possibly even a conclusion to the rate hike cycle that has in theory been supporting the dollar.

If this were any other chart then most would consider it closer to a buy than a sell, but because it is the dollar it is almost a foregone conclusion that it's headed lower.

What you need to know... - Jon Doctor J Najarian - 8:16 AM

Cigarette Makers Win When They Lose – Get this, a U.S. District Judge ruled that a group of tobacco companies had broken the law, but could not be forced to pay monetary penalties such as funding a large anti-smoking campaign! In her 1,653-page opinion the Judge said that despite internal recognition of this fact, said she does not have the power to force the multi-billion dollar settlement.

Sears Holding (SHLD) Earnings Up – Yeah, that's good news, as the nation's third-largest retailer, reported better-than-expected second-quarter earnings as net income grew to $294 million, but Mr. Lampert's plans to buy other retailers has shares down over $8 in the pre-market.

Merck (MRK) Win Overturned - A federal jury in New Orleans determined that the drug giant should pay $51 million to a former FBI agent who claimed the painkiller caused his heart attack and a New Jersey state court judge threw out a victory the company won in November. Ouch!

Positions in SHLD, MO

Treading Water. - Rod David - 8:07 AM

Thursday's session needed to preserve buying pressure, not inspire it. The penalty was the afternoon's one-hour drop from new session highs back into negative territory. A bounce into the close failed to recover the morning's high.

The timing of Thursday afternoon's drop allows for the highs retest Friday, but not for a sustainable higher high. Option expiration volatility helps to make a retest and failure possible. It takes a lot of selling pressure to reverse the prevailing trend from new highs on an expiration day. The kind of selling pressure that reversed Thursday's new high back into negative territory.

Despite indexes printing new highs intraday and closing with a gain, Thursday's volume didn't improve its recent pace. And sellers were more productive than buyers - 25% more NYSE up volume than down volume produced only 15-20% more advancing issues than decliners - obligating Friday's market to reward Thursday's sellers for their relative productivity, even if only momentarily, or if to reject an early gain.

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