Buzz Bits: Dow, Nasdaq Slip
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Earnings Report - MV News
- Synnex (SNX) reports 2Q $0.46 EPS vs. $0.44 cons on revs. $1.68 bln vs. $1.63 bln.
Buzz 'em if you got 'em!- Todd Harrison- 3:44 PM
- I thought Keith Jackson retired? As I step out of an internal afternoon meld, cries of "Whoa Nellie!" are reverberating through my eight screens. I offered earlier that I didn't think we saw the last of Boo for the day and indeed, he's back and he's got a 'tude.
- Why is he so cranky? The great unknown, as we've chronicled, is the mark-to-market process or the perception thereof, which may be all it takes. If investors in the trillion dollar CDO arena get spooked, the market will mark itself.
- The two tells we were deadly focused on into late last week? The BKX (under the 200-day) and Blackstone, which is off another 8% today. As go the piggies, so goes the poke and that bacon is shakin' as we edge towards the close.
- S&P 1490 is the level of lore for technicians galore. We eyed the potential double top at 1540 and, if 1490 breaks, you'll hear that term with increased frequency.
- McDonald's, IBM, Altria and GM account for 20 DJIA points right now, which is keeping that proxy above water. Fair nuff, but it's days like this that highlight why a basket of 30 stocks isn't a true encapsulation of the market action.
- Remember how we were riffin' on how sub-prime wasn't "contained" way back when? This is sorta what we were talking about, although the timing remains very much is question. There are gonna be alotta fits, starts, rumors, writedowns, head-fakes and crossovers. This is the definition of volatility, Minyans, so it may make sense to trade a bit smaller and keep your right hand up.
- Fare ye well into the bell and for gawd sakes, smile--it could be worse!
The Battle Lines are Being Drawn....- John Succo- 1:41
And the battle between indexes and stocks continues.
When you watch the tape as closely as I do it is very evident that the trend of strong index buying versus heavy stock selling continues, and is in fact accelerating.
I watch as index futures and ETFs are endlessly bid while stocks are being sold. After a while the stocks are dragged up kicking and screaming by arbs. This is not what makes a "healthy" market, which grinds higher from the bottom up.
This is price-insensitive index buying being done to "get into the market" either by asset allocators who key off of bonds (which makes little sense to me), or it is non-economic entitites such as foreign central banks continuing to park their trade dollars in U.S. risky assets like stocks.
The NY Times' Warning- Jeff Macke- 10:23 AM
The NY Times (NYT) is out today with a 5 web-page warning on the dangers of a Rupert Murdoch (and NWS) controlled Dow Jones (DJ).
The intent of the article seems to illustrate the various nefarious ways in which the owner of an allegedly objective news source can influence the reporting. Consider the fact that the NY Times, like Dow Jones before Rupert's bid, is:
1) A struggling news empire with a sterling reputation and a lousy stock (40% off 2004 levels)
2) A public company where the voting rights are held not by buyers of common stock but rather a family.
3) A famously inefficient operator, refusing to publicly consider selling itself into the most robust M&A market in history
Once read from that perspective, in other words, once you read the article while considering the source, what the Times' piece demonstrates most effectively is that there is truly no objectivity in print journalism. The idea both demonstrably false and an anachronism, created largely as a response to William Randolph Hearst when he built his empire by printing that which people wanted to read nearly 100 years ago.
The haggling isn't over patriotism or control. It's about money. With no other bidders emerging, Dow Jones, strictly as a stock, figures to go at or slightly over the original $60 bid. If Dow Jones holds to its demands, Rupert will walk and the price of DJ will drop somewhere between current levels and where it was before Rupert came calling.
That gives DJ about $4 of upside potential vs $20 downside risk. We don't give advice 'round here but I'll pass on DJ, thanks.
A few observations...- Jeffrey Cooper- 9:46 AM
S&P futures down despite a substantial rally in bonds this AM? Where has all the linkage gone?
Barron's cover story is: 'The Top of the Market'. (There is no question mark at the end.) Are they going to nail it?
Moreover, the current pattern is not a typical toppy pattern. Given the double inside pattern on the weekly S&P, it suggests a meaningful move but I would not be surprised to see a relief rally occur, a spike or fling, IF a band aid or tourniquet is applied to the Bear Stearns (BSC) debacle.
Be that as it may, TIME is more important than price, and time doesn't owe us anything from this point as far as an extension of the advance.
That being said, a picture perfect 'work-out' of the pattern for many reasons would be a move up into the first or second week of July.
A fractal of the March low could play out on an undercut of 1490, but in my stuff a move below 1483 that sticks could be a Get Out of Dodge signal.
Additionally, the S&P closed below its 50 day moving average and a short term 2 pt. trendline on Friday.
Hoofy needs to backstop the market today or tomorrow at the latest -- buying retracement levels here could be dangerous as all support could be only theoretical now that time is up.
Only above 1507 does the possibility of a rally play out. Only above 1521 does the notion of new highs become a probability.
On the radar: Nymex (NMX), Cleveland-Cliffs (CLF) on the long side. Abercrombie & Fitch (ANF) on the short side.
Positions in NMX, CLF
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