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Buzz Bits: Dow, Nasdaq Take A Dive


Your daily Buzz & Banter highlights.

Editor's Note: This is a small sample of the content available on the Buzz & Banter.

Interesting Action! - Sean Udall - 3:55 PM

A meltdown after melt-up action yesterday -- is it really much different than much of the last few months?

  • Semis are holding and some are higher following poor recent performance. Many in this group may have seen near term lows after fairly solid reports were met with aggressive selling.

  • Oil is down slightly and this could be just the beginning.

  • Nymex (NMX) and SanDisk (SNDK) are higher as well as Riverbed Technology (RVBD) so some growth is catching a relative bid today.

  • As I wrote yesterday, the Fed doing 25 bps puts them back slightly behind the curve and today is good evidence in the finance stocks.

  • These Citigroup (C) issues and PMI (PMI) report make the dissenting vote look pretty hollow.

  • Lastly, while some problems in the finance sector are severe, there are starting to be some compelling long opportunities with a select group of names.

Position in NMX, SNDK and RVBD.

Pairs for Lunch - Ryan Krueger - 2:52 PM

Since I was crazy enough to share that I was sniffing (not buying) around shares of Citigroup (C) for the first time in my career, I must finish the other side of that sandwich and add some fries, actually only one. My welcome? I tracked down a report about the pension assets alone that it manages (which I'll share with Minyans) and the report fried one of my PC's. I seek what's most uncomfortable but that was a bit much.

The other end of that work for us focuses on relative strength and often results in paired trades. Look no further than an even stupider idea of mine yesterday - scheduling a trip to the dentist on Halloween afternoon. It used to just be the dentist's office, now it's a business called Cosmetic Smiles and they simply couldn't be more disappointed at my utter disregard for vanity and only slightly more about my appearance in general. They may not ever get a big ticket from me but I'm the exception and business is good.

I was talking to the denty about Dentsply's products (XRAY) which I wrote about a few months ago after one of our carving stations spit it out, and I'm a rabid anti-dentite. The company reported terrific numbers and is up sharply in a terrible tape today. I like the industry and I like the clue it offers to the rest of health care – catering to customers who are increasingly paying cash for procedures falling in price like…an actual business.

That group of relative strength champs from that article underlined the potential of that lens at certain times in certain markets by posting a +15% return each, on average since that date against a 5% S&P 500 return.

If you ran that same blade of my firm's carving station right now three stocks make it through each criteria: Activision (ATVI), Gilead (GILD), and Intuitive Surgical (ISRG).

Positions in XRAY, ATVI, GILD, ISRG.

I see you sent my letters back and my LP records and they're all scratched... - Todd Harrison - 12:59 PM

The tape isn't the only thing scratched today, as evidenced by my high noon entrance into the 'Ville. Why, you ask? I could say "morning melds" but, alas, that would be a bit of a fib. The simple truth, in a word, is balance. A number of Minyans recently pinged to say "Hey boss--you seem a bit on edge these days. Sorta wound up. Are you alright?"

The answer was "I am, you're right and yes--but not very balanced." So, last night, I celebrated my favorite holiday with close friends while dancing like nobody was watching at The Police concert. And, from there, we vibed with Sting and celebrated the journey of life. There was a time when I would feel guilty sharing that tale but I'll tell you--I needed it. This business can suck the life out of you if you're not careful and we gotta work to live, not live to work, right?

Back to life, back in reality, I strap into my turret for my self-imposed half day to find:

  • The mirror image from yesterday's scrimmage, with the S&P precisely where it was on yesterday's opening. We offered yesterday that the "double top and lower high" was still in tact, albeit barely, but given today's showing, it's more... barely.

  • Perhaps more disturbing? The new reaction low in the piggies as they forge fresh 2007 downside ground. As I wrote yesterday, either we've shifted paradigms or this action is setting up a heckuva year-end bender.

  • Why the about face with the tape? Perhaps it's a function of many mutual funds ending their fiscal year yesterday. Or it could be the realization that the Fed has one left bullet in their gun (and knowing the last one will be pointed inward). Or... seeing both sides, maybe

  • In sector stuff, the semicaps (flagged yesterday) are feeling the heat, as are the financials, as discussed, with Fortress (FIG) off 10%, while Fannie, Freddie, AIG, Citigroup, Merrill, Morgan and Lehman take 4%+ haircuts.

  • So why the crying eyes in this complex? The most intuitive thought is the specter of future rate cuts, which currently project a 66% chance of no action. I'm not so sure, as I continue to feel that there are a lot more skeletons in Wall Street closets.

  • I'm sticking to my $100 billion in write-offs by year-end. What I don't know, with certainty, is how effective Hank and the Banks (super-conduit) will be in soaking it all up.

  • Hope you're well, my friends---and hope you're hitting 'em hard.


Recent Moves - Jeffrey Cooper - 12:14 PM

RTI International
(RTI) is a good example of what happens when a stock in a downtrend rallies on earnings but closes near the bottom of the range. This morning RTI stabbed down and the first bounce after a big plunge is almost always a sold short, as shown in the 10 min. chart today.

Mastercard (MA) is a good example of a stock that explodes on earnings and the first pullback this morning was a buy.

However, it looks like MA likely made a first hour high this morning if it breaks the 91.70 and sticks. See a 10 min. chart of today here.

Wynn Resorts (WYNN) looks like it has carved out an Expansion Range Double Stick sell signal on the daily chart, shown here. It broke out on a large range but immediately offset that range and gapped down. A break of this morning's lows will be a Rule of 4 breakdown on the 10 min chart of today's price action.

Position in WYNN.

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No positions in stocks mentioned.

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