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Buzz Bits: Dow, Nasdaq Edge Lower

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Your daily Buzz & Banter highlights...

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Curiouser and Curiouser - Todd Harrison - 3:56 PM

For the second straight session, a mysterious bid appeared to lift the gift into the last hour.

Now, it could be coming from alotta places---China, maybe. Traders who are short gamma, perhaps.

Or maybe it's Hank's secret stash, as he likely knows how tight traders are gripping the handlebars and how thin the ranks currently are. No shot you say? Way, I'll counter. He told us on Tuesday that he's "re-energizing the working group on financial markets" and while I'm not quite sure what that means, it could mean alotta things.

There's no way to know, for sure, and even if we did, I'm not sure that would make Boo feel any better. I mean, there's nothing more dangerous that a cornered herd of elephants, right? Except, maybe, a pissed off 800-lb gorilla. Honestly, they both scare me, which is why I'm defining my risk (under BKX 111.50) and respecting both sides of the nutty ride.

I'm outie as I've gotta haircut. I'm hoping they finally charge me by the follicle but I'm not holding my breath. Nothing comes easy these days, not even slimmin' trims.

May peace be with you.

R.P.


Interesting Technical Levels for Turnarounds and Confirmations - Sean Udall - 1:54 PM

Blackstone
(BX) -- nice close yesterday. I think any close above $26 is significant but a weekly close above $26 makes this a strong technical long in my book on a short term basis. I may look to add into a move above $26 and I'll certainly add on any Fed rate cut.

Acme Packet (APKT) -- confirmed my early August 9 read yesterday with a close above $14.50. Short term chart is looking very powerful now, weekly chart is confirming the view. This stock will move with the market to a degree but the daily MACD is wide open and I've learned to respect that strength. Any confirmation of fundie strength from other telco equipment names will only help APKT's move. JDSU's report was okay, but not sure it was good enough to help the whole sector. We'll see over the next few days. ADC Telecommunications' (ADCT) and Finisar's (FNSR) reports in early September could be another good tell for continuing strength in this group.

Lazard (LAZ) -- I think it has bottomed and I feel I should be long this name. Though it is fighting the prior death cross, I think it wins the fight, but I would rather buy this on a subprime rumor day. BA investment in CFC might quell any near term dips in this name.

Calamos Asset Management (CLMS) -- another possible early TA turn. Growth stock asset managers may get long side legs over the next few months. This one is on the list.

Integrated Device Technology (IDTI) -- another semi-comm that could turn nicely higher. Early bull move forming.

JDS Uniphase (JDSU) -- again posted okay quarter. Stock is hated with huge short interest. Will the analysts hurt it or support it? On a purely TA basis a move above the $15-15.50 level could foretell a significant move higher.

Position in BX, APKT and JDSU.


Between the Ticks - Jeffrey Cooper - 1:40 PM

  • The DJIA is down 50 points, so why does it feel like 150?

  • Bill Gross wants a Fed bailout of housing.

  • Too big to fail, too big to bail?

  • Does Angelo Mozilo go to the same tanning salon as George Hamilton? Or is that color from standing too close to the weenie roast in the mortgage mess?

  • Many Alley Oops today: gap up to outside day downs.

  • Mastercard (MA) for example, gapped 180 degrees up from the 123 swing low, and looks like it has traced out an A-B-C retracement which projects to 134ish.

  • Early on it looked like distribution in some of the glamor go-to horsey names---Research in Motion (RIMM), CROCS (CROX), Baidu.com (BIDU), Apple (AAPL)---that was being masked by buoyancy in the S&P.

  • Was the tell for today's opening sell the action in many of the horsemen yesterday?

Positions in MA, AAPL.



JPY Update - Mark Bloudek - 12:37 PM

All of the JPY crosses have bounced significantly over the past few trading sessions. This has corresponded with the bounce in equity markets as the correlation between the yen carry trade has continued. Is this just a bounce or the start of a new leg in the carry trade?

To answer that question, I went and looked at the performance of USD/JPY, EUR/JPY, and AUD/JPY. What is interesting is that all three of these charts are very similar as the correlation continues to exhibit itself between each of these charts and the equity markets. This is important and telling for ALL assets, especially equities because it indicates to me that the underlying bid in equities is still indeed a function of the leveraged carry trade around the world.

So where are the JPY crosses headed? Well, the thing that many people are overlooking in all this is the potential for significant convergence of interest rates between the various central banks around the world and the BOJ. So if/when the Fed tries to lower rates, it will hurt the profitability of the carry trade for those playing with short duration. For those playing with the longer duration carry trade, it remains to be seen how bond curves around the world act.

In my opinion, if the Fed tries to lower rates, the JPY goes significantly higher thereby putting pressure on equity markets to the downside as more leverage gets unwound. Also watch the action out of the ECB if they decide to STOP raising rates. That may also set off more JPY appreciation.

No positions in stocks mentioned.

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