Buzz Bits: Dow, Nasdaq Inch Forward
Your daily Buzz highlights...
Bell Buzz - Todd Harrison - 3:16 PM
- If it's this slow today....what shall tomorrow bring? I can tell you this, with the exception of a certain SPY Sept 129 put buyer, I can't find many folks who think we move in front of Labor Day. I'm not saying we will, for sure, but volatility levels are cheap enough to make that bet (note: not a directional bet, per se, a bet that we'll move).
- And yeah, I'm still in that stuffy, itchy, furry bear costume (two legs, or 50% conviction) but I've tightened my stops a bit as a function of discipline. At the end of the day, all we can hope for is an adventageous risk/reward profile. That, I suppose, and a respite from this vicious decay they call theta.
- Hey Billy, do me a favor and pick up some more gamma while you're in Greece!
- Thanks for that phone call Raider Marc--its great to hear from old friends with good hearts. Give my love to Raider Max and tell him that I'll see him at The Hole!
- Pennant chase! No, not the Yanks (6 1/2 games to the good)---the homies! For the last two months, the HGX has put in lower highs and higher lows. That's a flag formation, Minyans, and while it typically breaks to the side of the prevelant direction, I'm gonna watch it either way for more clues on the fuse.
- Hey Minyans--if you're diggin' the critter vibe and wanna flip the gratis trial switch for your entire network, lettuce know (that's how we grow!).
- And if you think we've grown in the last five years, wait till you see what we've got on tap for the next six months! I see it...and I still can't believe it!
- Fare ye well into the bell!
TiVO: Not Dead Yet - Jeff Macke - 1:23 PM
Greetings from NYC where I'm shaking off the effects of an all-night commercial shoot for CNBC's Fast Money and getting ready to journey to Minnesota for the funeral of my father-in-law, Steve Taylor. Steve was 84 when he died in his sleep, surrounded by his wife and loving kids. Death is the ultimate perspective check; even when it's a good one. Suffice it to say, I'm more anxious than ever to start spending all 7 days of each week with my family.
In jarring segue news, I notice that Tivo (TIVO) is up 5% today on news that the Kleenex of DVR companies has signed a deal to offer Tivo services to current Cox cable customers beginning in 2007. The deal follows Tivo's court victory against Echostar (DISH) last week when a judge ruled that Dish must pay Tivo $90 million and cease offering Echostar's patent-violating DVR service (the latter ruling was stayed pending review of a higher court).
I'm still long Tivo on the dual theories that 1) Most of the knock-off DVR's from cable and sat cos are inferior to those offered by Tivo. 2) It makes more business sense for the MSO's to pay or simply buy Tivo than it does for them to violate Tivo patents. The risk to my theories was that Tivo would go bankrupt before they could strike any deals which would benefit Tivo shareholders.
The game isn't over yet but the Cox deal and court victories increase the chances long-suffering Tivo longs will finally get some reward for our pain. Even if I were inclined to "advise" in this space I wouldn't suggest anyone chase Tivo's stock after a big move. You can actually see the bodies of those who got long previous "break-outs" in the multi-year Tivo chart. I simply find it worth noting that these developments have given Tivo a tangible, rather than theoretical, fundamental story. The upside potential is murky but, at least from where I'm sitting, the downside for the stock is no longer anywhere near zero.
In a world of uncertainty, this long-term Tivo holder will take it.
Position in TIVO
Itsa good day! - David Miller - 11:33 AM
Unless you've been under a rock today, I'm guessing you know the FDA approved Barr Pharma's (BRL) modified application for over-the-counter Plan B contraceptive.
The good news I'm talking about is this unlocks the process by which Andrew von Eschenbach can get confirmed to the post of FDA Commissioner. The FDA has been without adult supervision the entire span of the Bush administration except for about two blissful years when Mark McClellan was at the top. His appointment to the top spot will be good for biotech.
Now if we could only get the same thing at the SEC...
Of OmniVision, Parlux - Herb Greenberg - 10:53 AM
As I noted on my blog yesterday, Pacific Growth analyst Satya Chillara, a recent bull on OmniVision (OVTI) when he was at another firm, picked up coverage at his new job "heading into its earnings call" next Thursday with a neutral. He cited, among other things, a "readjustment of order patterns from Motorola (MOT), Chinese ODMs and different geographies," as well as a loss of share to Micron (MU).
Coincidentally (or not!), today Baird's Tristan Gerra cut his OmniVision numbers "ahead of next week's conference call" over concerns of "a potential inventory correction" impacting OmniVision. Interesting how two analysts at different firms can draw the same conclusion a day apart, don't you think?
On Parlux (PARL) -- also from my blog -- based on a Form 4 filed late yesterday it appears Parlux CEO Ilia Lekach got a margin call. No wonder he wanted to take the company private at higher prices. (Or so it would seem.) Lekach hasn't returned my call seeking comment.
Stocks Above 50-day, 200-day Moving Averages - Kevin Depew - 10:47 AM
Phil Erlanger this morning mentioned stocks above 50-day and 200-day moving averages as something they follow on a sector-by-sector basis. I like to look at charts of these for sectors and the market as a whole broken down by segment.
Incidentally, Stockcharts.com has free point and figure charts of the percent of stocks above the 50-day, 150-day and 200-day moving averages for the NYSE, S&P, etc. For example,
NYSE Percent of Stocks Above 50 Day Moving Average ($NYA50R)
NYSE Percent of Stocks Above 200 Day Moving Average ($NYA200R)
I don't look so much for extremes in these indicators as much as divergences. For example, the S&P 500 percent of stocks above their 200-day moving average has been declining at price peaks since January 2004 even as the index has moved higher. This says that during rallies fewer and fewer stocks are able to exceed their 200-day moving averages once they cross below them.
However, because the SPX is cap-weighted and we are seeing the seeds of large cap stocks beginning to outperform small and mid-cap stocks, it may take a while for this index to "officially" catch up to its deteriorating internal technical condition.
Think back to the 1990s. Investors couldn't figure out why the NDX, Nasdaq Composite and SPX were hitting new highs while their diversified stock accounts were performing horribly. We had an official bear market in stocks at that time, but a bull market in indices. Something similar is happening now, but I don't think it can last.
Position in SPX equivalents
Vacation anyone? - Fil Zucchi - 10:40 AM
New home sales were weak but probably better than most feared. Median prices were down again, and are now 10% below April levels, though that number does jump around quite a bit. Minyan Sean M. rightly notes that things might get quite a bit worse for the homies in the August and September reports, as many of them close their fiscal years in September and they will be obliged to fire sell their spec inventory.
With the exception of whatever vibes might emanate from Boom Boom's Jackson Hole conclave, the econ calendar is now empty until 8/31, when a barrage of data will start. As things get thin and thinner, Minyans might wanna be careful and carefuller.
What you need to know... - Jon Doctor J Najarian - 8:02 AM
Rite Aid (RAD) Buying Eckerd For $3.4 Billion - In a move that will dramatically increase their footprint, RAD is paying $2.5 billion in cash and stock and assuming $850 million in debt to takeover 1800 Eckerd & Brooks drugstores.
Surprise Resignation at McDonald's (MCD) – Mike Roberts, president and chief operating officer at MCD shocked Wall Street with is abrupt resignation from the fast-food chain. No reason was cited in the late afternoon announcement by CEO Jim Skinner. A company spokesman did not immediately return phone calls seeking comment.
Chico's (CHS) Warns, Coldwater Creek (CWTR) Runs – Chico 's warned that it is facing a sales slowdown and lowered its earnings expectations for the next four quarters while Coldwater Creek, announced bullish quarterly figures and raised guidance. You can imagine the result, as CHS loses over $4, falling below $20 and CWTR rallies 12%.
Position in CWTR
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