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Buzz Bits: Dow, Nasdaq Shoot Higher Into Labor Day


Your daily Buzz & Banter highlights...

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Three Potential Lower Highs - Jeffrey Cooper - 1:34 PM

I recently received a question regarding the pattern of three potential lower highs.

The first lower high on the S&P was on August 8th. The second lower high was on August 24th.

I was referring to the possibility that today's high would be lower than that of last Friday's but it has been exceeded albeit by the slimmest of margins. It has been surpassed but the market is not a fine Swiss watch. If the S&P were to close meaningfully below last Friday's high then the spirit of a third lower high would exist.

Nevertheless, looking at the weekly chart a minus one, plus two sell set-up now exists.
This occurs when the three week chart turns down and then the market traces out two consecutive higher weekly highs, which we now have. This is not a bullish picture.

However if the S&P holds up into the last two hours it would not be surprising to see a rush by the index to kiss its overhead declining 50 dma.

ALVR and LNOP Triggered - Quint Tatro - 11:20 AM

So far Boo isn't finding any love on this late summer Friday. While there wasn't much to chew on in the Bernanke notes, I suspect the fact that he continues to say they are prepared to act if necessary gives Hoofy enough comfort to stand his ground.

For the most part I am letting stocks run and enjoying gains. Because it's Friday and I have an eye on the long weekend, there is no question I am looking to book some gains and make it real. I encourage Minyans to do the same.

From this morning's list, Alvarion (ALVR) and LanOptics (LNOP) triggered, both doing what they should, at least for the time being. I have a tight leash on both as I don't desire laggards to remain long in my portfolio, especially when the big boys return to the desk next week.

Keep it close to the chest today, friends, and don't let Mr. Market swing you to and fro. Stay in control and keep those emotions in check.

Positions in ALVR and LNOP.

A few things to watch... - Sean Udall - 10:47 AM

  • A weekly close on Apple (AAPL) above 138 sets up the next push higher. I may end up regretting being capped at $145 with my covered write near term.

  • Broadcom's (BRCM) chart is a thing of beauty with a fundamental backdrop as good as it's been in years. We have the upside cross with the 50 day over 200 day and following a weak decline that's quite bullish.

  • I'm back in Brocade (BRCD) as the stock just hasn't cracked after what I thought was a muted quarter. TA's are pushing this call.

Positions in AAPL, BRCM and BRCD.

Animal House Revisited - Bennet Sedacca - 10:38 AM

There was a scene in Animal House where one of the Delta Chi fraternity brothers has a devil on one shoulder and an angel on the other (it wasn't a G rated scene so I shall leave what was said out of this Buzz). This environment reminds me a little of that.

I was just taking a 'straw poll' of what a few smarter folks I know think of today's 'news'. One of them is my partner and the other was a really bright friend of mine. Toddo and I were pinging back and forth recently and we said:

  • Don't let the macro view get in the way of your trading.
  • Don't let the short term view get in the way of your macro view.
  • When in doubt, sit it out.

Which leads me to my conclusion of today. First of all, the devil on my shoulder can't shake the macro view, which, IMO, is horrendous, and worsening. One, two discount rate cuts won't bail out millions and millions of consumer in deep doodoo. On the other hand, the angel on my other shoulder is saying 'trade it, but trade small.

The market has taken on a random tone of late and while I was hot for a while, I got stopped out on Wednesday and am now flat--following the wisdom of both those guys on my shoulders.

This does not seem to me, a time to put on huge positions. There will be fessing up to, probably starting Tuesday. Enjoy the long weekend!

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No positions in stocks mentioned.

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