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Buzz Bits: Bulls Take Control

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Your daily Buzz & Banter highlights.

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Chinese Checker! - Todd Harrison - 3:51 pm

Minyan Brooks asks if I've got a feel for Baidu (BIDU). Yeah, I've got a feel... it's called snakebite! After fading (shorting) $350 earlier this week, getting stopped out... and then watching it drop $25 handles in a single session, I can't help feeling a bit fragile in the name.

I will say this--hands over eyes, the technical metric warrants caution in and around $350. That, along with the $100 dollar equity enema that Google (GOOG) administered the shorts being fresh in our keppe's, supports the bear bet.

Catalysts (such as earnings) often render levels obsolete so I'm gonna play uber-small--if at all--with conscious knowledge that the ability not to trade is often as valuable as trading ability.

R.P.


Tech Vibes - Sean Udall - 1:52 pm

  • The results of Encore Wire Corp. (WIRE) would seem to run counter to evidence of a severe recession (across the entirety of the economy) -- as it reported modest growth over the prior year. However, the results of the housing numbers point to a severe housing recession.

  • Citrix Systems (CTXS) has gone positive on the day after a solid but unspectacular report. If you ask me this is the company Microsoft (MSFT) should be buying. I bought the recent weakness in CTXS and have temporarily forgiven the company for overpaying for its Xen(source).

  • I sold the strength in Qualcomm (QCOM) today. the report was OK, the company raised slightly but I like the current risk reward of other chips better currently.

  • Infineon Technologies (IFX) has bounced a buck off low base in three days after reporting just a slew of pretty bad news. I guess the low is in on this one. I'm a buyer on any material weakness and color me idiotic for not buying it near $8 the first time I posted about it.

  • Could STMicroelectronics (STM) be very far behind?

  • When Motorola (MOT) spins off its cell biz, is that the time to be get long the MOT suppliers who have been crushed?

  • I'm not sure I like China as much as Prof. Tatro does but I sure like The9 Limited (NCTY) and Perfect World (PWRD).

  • On the economy side, if the Fed is nearly done, before the ECB has even cut rates once, how much appreciation is embedded in the dollar at current levels?


Position in CTXS, MSFT



The reaction to the news... - Bennet Sedacca - 10:00 am

...Is more important than the news itself.

I opined the other day that oil might be in a bubble. I was, of course, met with boos and jeers which made me feel, well, a little better about it.

Then Minyan M asked me about Potash (POT). No, not if I was smoking it for saying oil was parabolic. But POT is the parabolic poster child. Note the company blew out the lights in earning today and the stock since yesterday is down a cool 25 beans.

Below you'll see another of my 'bubble comparison charts' using NDX versus POT. Ouch. Look out below.


Click to enlarge


Position in POT options


Gold Bulls Rockin' - Lance Lewis - 8:54 am

The euro is continuing to correct and is breaking down out of its rising wedge on the charts to a new low for the week like we were looking for this morning (which is also hitting crude oil slightly too as is the usual correlation).


Click to enlarge

The good news for gold bulls is that despite the euro being down nearly a percent and at a new low for the week and crude oil being off nearly a dollar, spot gold is not only digging in and trying to hold its ground thus far above $900 like I expected, but it's actually up a dollar this morning (as are silver and platinum). So, basically I find this encouraging from the standpoint of gold and the euro following the November-December analog like we've been looking for (see the chart below). Remember, gold leads the euro and the dollar index, not the other way around.


Click to enlarge

I'd also note that Newmont (NEM) knocked the cover off the ball with its earnings last night and reported 80 cents vs. the 55 cents estimate and the stock is sharply higher. With that positive catalyst, odds are that the gold shares can rally even with gold potentially flat to slightly down today.

Basically, things are looking up so far for the gold bulls today. Let's see what happens…

Positions in GLD, gold shares, NEM


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