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Buzz Bits: Dow, Nasdaq Glittering Green

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Your daily Buzz & Banter highlights.

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Bullets Over Broadway - Todd Harrison - 3:36 PM

  • Granny Goldman has again staked her claim to leadership fame as she sprouts acne all over Del Boca Vista. I held a token amount of my throwaway puts (most of 'em were stopped out above $214)--and I took another stab last week--but action speaks louder than words.

  • In hindsight, I shoulda just bought some stock against the puts (delta netural) and traded the volatility. Old school Toddo woulda done just that. New School Toddo is being pulled in too many directions. The very fact that I'm talking in the third person is a testament to that fact.

  • Delta Airlines? Delta House? Delta Faucet? No silly, it's optionality. If you don't get it, don't trade it---just learn it!

  • Minyan Mark suggests I get myself an octopus to help me juggle more balls. I told him that I need two. Would that be an octopi?

  • All-time highs and things are great, right? On face value, yes, but peeling a layer off the onion, there is cause for pause. See both sides regardless of which one you're on.

  • Fare ye well into the bell, Minyans, and remember to breathe!

    R.P.


(Tiny) Position in GS



Earnings Speak, Who's Listening? - Quint Tatro - 2:59 PM

For most traders, earnings season officially starts tonight with Dow heavyweight Aloca (AA). While I am not at all that interested in how Alcoa's business is doing I am extremely interested to see the general market reaction towards the stock after the report. My guess is that the earnings see a big boost because of the recent fall in the dollar however, how will this be handled by the trading public? Should Alcoa beat expectations primarily because of a falling dollar, will traders punish the stock or buy it up?

Furthermore, the chart is attractive coming of a double bottom and sitting in a low level cup and handle. It is a chart that normally I would look to buy so if the stock does report good numbers and is bought, does this mean that attractive charts this quarter are telling us what may be coming from a company's report? What if the company reports earnings that are poor but the stock jumps, meaning that the bad news is priced in already and the stock has nowhere to go but up?

As we enter earnings season, it isn't so much about the stock or the fundamentals, it is always about the reaction. Watch Alcoa closely tonight, and tomorrow. Review the report, review the expectations but ultimately review where the stock is trading. This may very well set the tone for the remainder of the quarter. We shall see.

Position in AA


Gilligan's Island - Jeffrey Cooper - 12:36 PM

  • Amazon (AMZN) gaps up to new 60 day high and down on th day

  • Ditto Research in Motion (RIMM).

  • Ditto Apple (AAPL) although it has bounced. If it goes red again it may be down for the count today.

  • Crocs (CROX) is down after a new closing high.

  • Blue Nile (NILE) has a big reversal.

  • Solar is similarly slip slidin': First Solar (FSLR), SunPower (SPWR).

  • Watch Google (GOOG).



Pre-Wii and Pay Ways - Ryan Krueger - 8:47 AM

The Lone Wolf was early and I believe correct in calling for Activision (ATVI) as a year-end story, a name we have agreed on and buzzed in anticipation of this rally.

The New York Yankees' $200 million payroll compares to the Cleveland Indians' at $60 million much the way I think Electronic Arts (ERTS) compares to Activision. Paying for a lineup of stars/games got more and more expensive and will squeeze margins (and jobs?) at some point.

The point is that Activision's cost for games does not include these ridiculous (in my opinion) premiums paid for major league sports licensing deals. At the time, I was in the minority, as those exclusive deals were regarded as big blows to the other game-makers. But that was was pre-Wii.

Now this new console that nobody accurately planned for, nobody made enough games for, has been a monster. And the kicker is the games are less expensive to make.

P.S. Would it be rubbing it in at this point to note that you could have paid every player on both the Diamondbacks AND the Rockies every day this year for less than the Mets' payroll?

Position in ATVI

No positions in stocks mentioned.

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