Buzz Bits: Dow, Nasdaq Close Down
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Bring it Home Buzz - Todd Harrison - 3:50 PM
- It looks like the confetti will have to wait until Monday, thereby raising the question: What if Hoofy throws a party and nobody's here?
- I've already sent my RVSP saying "Good luck, but I'll be with my family for the holidays."
- Given that, I'll take this time to wish those observing an "easy fast."
- My posture is much the same. Same as it ever was.
- Believe it or not, we're jugglin' like nutty profesors here at MVHQ. Hence the end of day lag (not to mention the lack of standout action).
- We'll be back with a vengence come Monday (OK, Tuesday for some). Please enjoy the weekend and have a fantastic respite--you've surely earned it.
- May peace be with you.
Don't Let Me Down - Kevin Depew - 2:08 PM
- As September draw to a close It looks like the Dow Jones Industrial Average will register a TD-Sequential sell signal on the monthly chart.
- Interestingly, that TD-Sequential monthly sell signal may come just in time for a record high next week.
- The last time the Dow Jones Industrial Average recorded a TD-Sequential sell signal on the monthly chart was December. December 1999 that is.
- The record level of 11,722.98 was set less than two weeks later in January 2000.
- Check out Professor Adam Warner's excellent video on volatility here. (Note to Adam: Nice shirt!)
10 year note update - Bennet Sedacca - 1:01 PM
My firm took our profits in our long standing position in 2's and 3's earlier this week as the market became overbought from a short-term perspective. As noted, we replaced with 6 month bills anticipating our next move. That move will be to add duration to portfolios via the 10 year Treasury and deeply discounted mortgage product.
Taking profits is always fun and easy but now comes the toughest part. When do we add duration from portfolios? Yesterday, as previously mentioned here, was a short-term cycle high date, and also Pepe notes TD sell setups too.
But see the chart here, one that we have been using all year of the continuous 10 year contract. We broke out of the long standing 107-16 area and immediately ran the stops. Technically speaking, that old resistance SHOULD serve as support and a likely buying spot.
My firm thinks a potential bull market in bonds is upon us and we have adjusted our stance from selling rallies to buying dips. Also note the trend line that exists around 109-16. I think if we get through there, a huge move can develop. If that train gets rolling, we want to get aboard...Just what we are seeing, not advice.
Positions in Treasuries and MBS
The Gold Show - Adam Michael - 11:56 AM
It was an interesting week at the Denver Gold Show. I have to admit, the atmosphere was pretty subdued. Most folks I spoke with were bullish on gold "long-term", but uncertain about gold's near-term prospects.
For those with a few minutes, I recommend watching Bob McEwen's Keynote speech which is archived here (scroll down a bit and click on the Keynote webcast). Bob blasted several of the larger mining companies as wells as the bankers for many of the shenanigans that go on in the industry. Towards the end of the speech, Bob shows a movie that was created to mock the Goldcorp (GG)/Glamis (GLG) saga…very entertaining. The Denver Gold Show ended up suspending him from future gold shows for what I thought was a very honest and straight forward speech.
One trend I have picked up on recently is the weakening of the South African Rand. Few people I spoke with at the Denver Gold Show thought the move would last. If it does, I would expect those companies with significant production in South Africa to outperform the rest of the sector, as the cash costs (denominated in Rand) will decrease while they get to sell gold in US Dollars. Note: the higher the value of the Rand, the more Rand it takes to buy a $US Dollar (and the weaker it becomes).
Year to Date chart of the Rand.
6 Year chart of the Rand.
Some of the majors with South African production include AngloGold Ahanti (AU), GoldFields (GFI), and Harmony (HMY). On the attached chart, you can see the HUI Index has outperformed both GFI and HMY over the past six months. If the Rand continues to weaken, I would expect this trend to reverse and for the South African names to begin to outperform.
Positions in GFI, HMY
The Surreal World - Jeff Macke - 11:47 AM
Greetings from New Jersey where I am once again gearing up for Fast Money on CNBC at 5pm. It should be a good one as we have plenty o' show left over from last night (when we were pre-empted for the first 40-odd minutes by the Hewlett-Packard (HPQ) hearings). Other thoughts, both related and Random:
TGIF? Not so fast, there. - Rod David - 9:13 AM
Tuesday's "breakout" in S&Ps has yet to be confirmed by another accumulative session. At some point, just holding its ground might be considered bullish. But the burden of proof is still on buyers.
A new high today that is maintained through a relevant timing window would get a benefit of the doubt for being able to extend higher. But such a breakout would also get a tight stop, because if rejected, its reversal would find little support on the way down. And also because that's this pattern's most likely resolution.
Meanwhile, volume is likely to shrink Monday with Yom Kippur's observance. So, any strong opinion that wants to be expressed while there is still liquidity is likely to be expressed today, and probably this morning.
What you need to know... - Jon Doctor J Najarian - 8:14 AM
Research in Motion (RIMM) Ahead of Earnings! Pardon the pun, but call options for the Ontario-based maker of the ubiquitous Blackberry devices was through the roof ahead of the earnings report. My firm's Heat Seeker showed 21,000 Oct 90s trading vs 14,000 open interest. RIMM's profit and revenue were both ahead of street estimates. Shares closed just over $86, but have traded up to $103 this morning! I'd say those RIMM Oct 90s were a smart bet, wouldn't you?
Kerkorian Doubling Down? He's already got a billion-dollar bet on General Motors (GM), and now that his bet is paying off, his Tricinda Corp may acquire up to 12 million more shares despite the regulatory red tape that is likely to accompany such a move.
Tribune (TRB) Hires Merrill (ML) & Citi (C) - Last week, the Chicago-based media company established an independent board committee to help it explore a number of possible strategic alternatives. You know what that means, Merrill & Citi will try to find a buyer for some or all of the Tribune properties.
Accenture (ACN) Earnings Beat Estimates – The consulting giant's net income climbed, to $346.4 million, or 56 cents a share, from $229.1 million, or 38 cents a share, during the same period in the prior year. Accenture added that it has declared a cash dividend of 35 cents per share, the prior per-share dividend was 30 cents.
Position in RIMM, GM
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