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Buzz Bits: Dow, Nasdaq Plunge


Your daily Buzz & Banter highlights...


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

Bell Buzz - Todd Harrison - 3:48 PM

  • Man, of all the things to catch flack for...
  • On Friday, in the midst of the Red Dye equity enema, most media didn't seem to mind the light volume. Today, it's the mainstream reason du jour for the slippage.
  • Our take? Volatility is the opposite of liquidity and that sword cuts both ways, exacerbating the overarching movement.
  • Note to self: check yourself. And stop looking at times of sales.
  • When I begin to look in the rear-view, I tend to take a bit more off the table under "know thyself." Color me 25% of the downside exposure that I started the session with and plenty of dry powder into a much needed upcoming respite.
  • Am I 75% less bearish? Nah, I'm just tradin' and fadin' in the context of discipline. Opportunities are made up easier than losses.
  • "Sell hope and buy despair" works on several time horizons. Make sure your risk profile synchs with that.
  • Hey Pimplecheek! (Yeeeeeeeeeeees?)
  • A'ight, I gotsta hop and grab a mop. I sincerely hope this finds you well and, if you're diggin' the 'Ville, please help us spread the word. That's how we grow.
  • May peace be with you.


Under the Hood - Kevin Depew - 2:09 PM

  • So far new point and figure sell signals are leading new buy signals 24 to 7.

  • Overall sell signals are leading 48 to 9.

  • What is interesting, however, is that the sell signals are far and away dominated by four groups - Real Estate, Insurance, Banks and Finance.

  • Demand remains in control of the bullish percents for all but the Nasdaq Composite.

  • And each of the bullish percents added more net new buy signals yesterday, despite the apparent weakness in the major averages.

  • Again, it is vital to understand that the capitalization-weighted indices are not the stock market.

  • Playing those indices, whether through index funds, ETFs or futures, is different from buying the stocks of companies in outperforming sectors.

Voodoo Chile - Jeffrey Cooper - 11:27

The S&P broke convincingly back through its 200 dma and 20 dma.

Hourly support is 1440 ish which is 90 degrees down from Friday's high. Below that there is a cluster around 1425 to 1430 to watch. Why? 1425 is 50% of the range of the Aug. 16 low to Friday's high. The weekly swing chart turns back down on trade below 1430.30 and the first leg down bottomed at 1427.

180 degrees down from Friday's high is 1402 which is THE critical test level.

Trade below 1440 that sticks in my work indicates a break of the March low and a point of recognition that ushers in a leg to the May 2006 high

On the Radar

  • First Marblehead (FMD) looks like an inverted cup and handle (from April) with the handle tipping NOW.
  • Apple (AAPL) lost its 50 dma which is a bearish tell.

Metalheads - Sally Limantour - 9:15 AM

Copper looks technically like a market that has topped rather than a bull market that is about to make new highs and the LME copper stocks jumped 10,075 tonnes overnight. The soft U.S. housing data yesterday coupled with hints that the UK mortage approvals are slowing is weighing on the copper market.

Gold continues to coil in a tight range and news that China's gold production was up 15% to 145 tonnes in the January-July period versus year ago levels as well as Harmony Gold (HMY) reporting that it is expecting its gold output to increase this quarter is in the news.

Most disconcerting, however, for the bulls is the news that South African Gold and Coal unions are expected to sign wage agreements soon and the threat of lost supplies in that region would no longer be an issue.

It is also concerning that the gold/silver ratio is moving higher which is not typically bullish for precious metals prices. In a bull market silver outperforms gold and over the past several weeks gold has been outperforming silver. Unless gold can spring higher above $670.00 I will remain suspect of the market.

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