Buzz Bits: Dow, Nasdaq Rally, Close Slightly Lower
Your daily Buzz & Banter highlights...
One Name Worth Suffering For - Sean Udall - 2:34 PM
There is no doubt that panic hit the market today, but gauging panic and its dollar value effect on a particular stock price is nearly impossible.
I have bought back most of my calls that were covered call positions so those stocks are now riding the market naked again. Also, looking at adding some selective bull put spreads on a few names if the market sells off aggressively into the close.
The one name I bought today that I feel is worth suffering some intermediate downside to catch today's price is Akamai Technologies (AKAM). AKAM has been featured on the site by other Prof's so I won't beat the fundamental drum. Again, just a high growth name that has been completely tossed out in the current market. I also feel this is exactly the type of name that could significantly outperform if the market ever decides to go up again.
Again, stops are in place within my comfort zone of an acceptable loss.
Position in AKAM.
Intra-Day and More Closed-End Fund Fodder - Kevin Depew - 1:50 PM
The TD-Combo Version 2 buy signal on the 30-minute chart produced quite the reaction, and that's all for this short-term trade from where I sit. Again, as mentioned in the previous post, the daily SP charts show we could be at least five bars away from a low-risk longer-term entry point and that coincides with what the NYSE High-Low Index, which still has not reversed up to Xs yet, is saying as well.
Among the closed-end funds mentioned earlier giving point and figure sell signals, the Muniholdings Florida Insured Fund (MFL), Eaton Vance California Municipal Fund (CEV), Nuveen VA Dividend Advantage Municipal (NNB).
Also, note sell signals showing up in the Eaton Vance Short Duration (EVG), the ACM Managed Dollar Fund (ADF), ACM Givernment Income Fund (ACG), and a host of emerging markets-docused closed-end funds, from Malaysia to China, Russia and others.
Heads Up - Kevin Depew - 12:46 PM
Seeing DeMark buy signals nearing on the 30 minute SP intra-day chart, TD-Combo Version 2 inplace here, TD-Sequential within the hour.
Interestingly, we are still at least five bars away on the daily chart from any potential TD-Combo or TD-Sequential buy signals, so this for a trade only.
Position in SP.
Tech Investors... Some New Risks in the Market - Adam Katz - 11:07 AM
Keep an eye on the Euro conversion rate. For 3Q, 1.34 is what most enterprise software companies modeled for. They got a nice lift from the currency tailwind in 2Q. If the conversion rate drops below that level, that tailwind becomes a headwind and could start to lower Street estimates on some software names with large European presence. Obviously exposure to Asia and namely Japan could be even worse with the carry trade being unwound which is driving the dollar higher.
This has the ability to slow exports to Japan and as we saw last week when we got the budget deficit numbers, exports in automobiles and semiconductors were big drivers in the better than expected numbers that were reported. No need to panic about it but definitely something to keep on your screen and factor into your risk tolerance levels and ultimately your decision making.
One other big negative could be the lack of liquidity in the commercial paper markets. It has the potential hinder public companies in their ability to manage their cash properly. This, from a systemic standpoint is much more important that the subprime credit decline. The subprime market is $500 billion in total and it's not all going to zero. The estimated losses are expected to be between $100-200 billion dollars. The commercial paper market is $2.5 trillion and this is creating is helping to create greater paralysis with respect to short term loans used by public companies to manage cash.
Who's In Charge Here? - Jeffrey Cooper - 9:08 AM
After years of just charging ahead and charging the advance to plastic, Hoofy is in the fight of his life with Chicken Little, who has come home to roost with more than a few of his derivative cousins. Correlation is in chaos, causing unwinds.
Goldilocks and Goldman (GS) have eloped from Tape Town, leaving the wedding party waiting for a Godot of an explanation. We are told that GS is trying to figure out what happened. Jack and Jill Leverage up, leverage down. What kind of models are they runnin' anyway: Model T's or Edsels?
Does anyone really know the repercussions of persistent payoff of the Yen Carry as that "free lunch" gets puked up? Who ultimately will be the bag holders? This time around it may be the ones who built the bag. It reminds me of the Ben Franklin quote, "An empty bag can't stand upright."
Is that what the "synthetic" Fed easings are being perceived as by the Street: an empty bag, synthetic easings for a synthetic advance sown by the siren song, "I'm Forever Blowing Bubbles."
Hey, not everthing is dour this AM: J.C. Penney (JCP) is upbeat on the back to school season. The March lows 1364 to 1388 beckon. The mid point of the '06 to '07 advance. The March low of 1364 was 360 degrees up from the June '06 1219 low. It's almost like this stuff works, as a trading buddy of mine says.
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