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Buzz Bits: Dow, Nasdaq Climb

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



You're going the wrong way (how do they know where we're going?) - Todd Harrison - 3:11 PM

  • Warning! Negative gamma works both ways. We recently spoke of the pre-expiration dynamic where dealers got shorter higher and longer lower. This is the shorter higher part....

  • Against that spate of March paper piggy puts, I've nibbled on some January calls in the metal and energy space (dollar kinds).

  • If the CRB break proves ominous for the equity realm, I'll be well represented. If not, I've got this (cheap) paper as an upside hedge.

  • Did I hear a niner in there? Watch the meltage in vols, Mon Frere, as the VXO and VXN drip and drippen for 9%.

  • If you're option savvy, we're entering territory where "stock replacements" (with options) and married puts (as protection) make a ton of sense.

  • An interview? During market hours? FINE--send the kid in, and make sure he brings his A-game!


R.P.

position in energy, metals, financials, a slew of gamma



My two cents... - John Succo - 2:37 PM

To the market, lower oil and commodity prices look great. Consumption can pick up again as less is spent on stuff we need.

But what if it is the other way around. Occam's razor may be really saying consumption is waning so demand for stuff we need is falling.

Our real money indicators continue to show us that real liquidity is dropping because velocity is dropping. Debt is having an effect.

In the meantime managers are gasping to buy stocks. My firm has been very busy selling.


Were you aware of it!? - Kevin Depew - 12:59 PM

  • Note the OIH and OSX slip sliding away here.
  • How low can they go? They are well away from the long-term downside PnF price objectives mentioned yesterday of 104 and 152, respecitvely.
  • Near term, however, the OIH is down nearly 11% over the past five sessions.
  • Minyan MM asked about GM and F. GM has registered a DeMark TD-Sequential (aggressive) sell signal and is nearing downtrend resistance on the PnF chart at 34-35. F has just broken a spread triple top on a PnF chart but is registering multiple DeMark sell signals here on the daily chart.
  • Take a look at Merck (MRK). The stock has very important resistance just above 42.50, but has already broken through important long-term downtrend resistance. See the chart here courtesy StockCharts.com.
  • Since 1999 housing rose, nationally, at an average annual rate of 11%. Lumber over that time period was up a mere 1%. Copper was up 6%.
  • Must be something besides materials costs that caused home prices to rise.



Crude Update - Adam Michael - 11:37 AM

Last Friday, the Commitment of Traders (COT) Report showed that Commercials had reduced their net short position by about 14,000 contracts in Crude, but were still net short over 35,000 contracts. See the chart here.

I will also add that Open Interest is still near all time highs and actually increased as of last week's report.

The last four times Crude has flirted with its 200dma, commercials held a net long position in crude futures (see below). Each of those four times Crude put in a bottom and bounced. On this latest pullback in Crude, Commercials are still net short as we pull back below the 200dma. See instances 1, 2, 3, 4.

My thoughts on Crude have not changed…I would like to see commercials go "net long" before a bottom is in. I thought we might see a bounce around 200dma (we still could), but believe it will be short-lived until commercials change their tune. The next level of support looks like $58-60ish to me.


Transports will benefit from fuel surcharge... - Brian Gilmartin - 10:00 AM

The Transport chart looks iffy (see attached weekly chart), but now looks to be holding right below long-term support, so my firm has actually added to names in the group of late including Fed-Ex (FDX), Burlington Northern Santa Fe (BNI) and have kept our UPS position, despite its lousy 2Q earnings report.

What could help boost the group into the back half of the year is the lagging effect of the fuel surcharges currently in place, which fattens margins if jet fuel and other fuel costs decline sharply, while the fuel surcharge remains fixed.

The key issue is whether revenue growth slows more than the fuel surcharge adds to operating margins in the event the economy slows dramatically.

I am operating under the assumption that economic growth will not fall off the table, and that the falling oil price will "net-net" be a benefit to the sector.

This market is all about sector rotation: pick your spots wisely.

positions in FDX, BNI, UPS


Gold/Silver - Laurie McGuirk - 8:41 AM

The physical market appears under severe pressure from Official selling before the Washington Accord roll in a week or so. The buyers are bigger than the price action illustrates, IMO.There will have been a lot of physical metal traded to take the price down so dramatically and I expect gold will be back above $600 and closer to 630 by month end. Why? Diversification of dollar holdings (cheap) as per the stated goals of China and Russia, amongst others.(Opinion only and never advice.)

Silver has copped a hiding. How unusual?? My pile of physical bars didn't change, just the pile of green paper it would generate has. The old "elevator shaft" is at it again. I reckon sub 11 is a gimme but you all know that. Timeframe and exposure management is the key during such nasty reversals. My timeframe is 3 years and the risk is well quantified.

HUI copped 10% in a night? Gimme a break. Plenty of nice prices for those bulls game enough. I'm grabbing some down here for the personal account….. hmmmm.

Loz.

Position in gold, silver


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

Showtime For Apple (AAPL)! If you put your logo up with searchlights to resemble a Hollywood opening, you have to think today's special announcement has something to do with movies. And as bullish as I am on Apple, I think an iTunes movie store is a little ahead of the public's ability to partake fully in the experience.

She's Not Done Yet! Yes, those corny headlines are everywhere, but after two straight sessions, the Hewlett-Packard (HPQ) board has failed to oust Patricia Dunn, even as Congress sicks the FBI on HPQ. The House Energy and Commerce Committee said it was "troubled" by the news that the company had used outside contractors to obtain phone information about H-P directors and others.

Best Buy (BBY) Earnings - Will DLPs, Plasmas and LCDs be enough for BBY to beat street estimates? Sales of all the above have been strong, and we've had several bullish Heat Seeker readings here. First Call is predicting 2Q earnings of 44 cents.

Position in AAPL

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No positions in stocks mentioned.

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