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Buzz Bits: Dow, Nasdaq Surge Late


Your daily Buzz & Banter highlights...


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

Cisco's Tech Followers - Sean Udall - 3:39 PM

While I think the Cisco (CSCO) quarter will be fine, I'm not making a prediction on its quarter. Instead I'm focusing on stocks that may move on a strong CSCO number. CSCO could exhibit the typical sell-the-news reaction we have seen from many tech stocks this quarter. If CSCO rallies hard on a typical CSCO quarter (strong but not spectacular), then I think that will signal a short to intermediate term "all clear" to get bullish on tech names again.

Many possible peripheral names to look at -- but here's a condensed list that could, I believe, offer a favorable risk reward profile:

  • PMC-Sierra (PMCS): Data and networking chips had what could be construed as a turnaround quarter. The stock has dropped from $8.80 to $7.40's since its post earnings pop.

  • Integrated Devices (IDTI): Competes with NetLogic Microsystems (NETL) for chips used in CSCO's coveted router line-up. IDTI has broadened its line-up via acquisitions, but CSCO is still a large customer for it.

  • Jabil Circuit (JBL): EMS shop with sales into many markets. Has show a propensity to bounce on good CSCO numbers in the past.

  • Broadcom (BRCM): Large seller into many CSCO product lines. Surprising weakness of late, though it's held well on the extremely weak trading days.

  • Atheros Communications (ATHR): Large pullback on "so so" quarter.

Postion in PMCS, BRCM, and JBL.

So take it to the limit one more time... - Todd Harrison - 3:31 PM

All alone at the end of the evening? When the bright lights have faded to blue?

Well, I haven't faded yet as I counted to 100 backwards (by primes) and reminded myself that the first move post-FOMC is typically the false move. The most rational move woulda been lower, given the vexy text, but the path of maximum frustration dictated otherwise.

With a conscious nod that there could be bovine friendly evolutions (some cash deals, for instance), my sense is that Boo maintains the benefit of the doubt below S&P 1490. That's a level I plan to lean on if it gets closer as I wanna keep my right hand up. Indeed, this volatility is no joke as we'll no doubt see in the days and weeks ahead.

I'm absolutely slammed so lemme hop. Before I do, I'll also note that vols (VXO) haven't "come in" (for sale) with this rally, a fact not lost on trading desks and "short vol" funds across the Street. Negative gamma is a tricky witch if you're a step slow and that is likely the cause of some of these out-sized moves.

Fare ye well into the bell.


Fed Up Randoms - Jeff Macke - 12:57 PM

Today's price action is exactly why I once made it policy to go golfing on the morning of Fed days. Put it this way, today's release actually matters, the markets have been historically volatile over the last month and yet, here we are, bouncing on either side of flat for the day. At the risk of saying something which will be obsolete in an hour and a half, here's what I'm seeing...

  • Microsoft (MSFT) cut Xbox360 prices by another $50. Another blow to Sony (SNE) as MSFT has a cheaper box to manufacture, a larger installed base and Halo 3 coming out this fall (as opposed to Take-Two's (TTWO) Grand Theft).

    Think of it this way, if this were a boxing match, Microsoft would be pressing hard, looking to finish a staggering Sony in the opening rounds.

  • Of course, both Sony and Microsoft are just looking to get a shot at the real champion of this console war, which is Nintendo (NTDOY). Jon "Should Write More" Schwartz has more thoughts on the console wars here.

  • JetBlue (JBLU) is down 17% since the CEO called me Chuck on Fast Money. Not that I took it personally. I'm just saying... the stock is down 17% since he called me Chuck and down again today, despite JBLU announcing strong July traffic.

  • Could the financials (including the XLF I "took off the table" as a trade idea on last night's show) continue to rally post-Fed? It's a coin-flip, from where I'm sitting. I don't trade coinflips, as a rule.

Who let these dogs out? - Jeffrey Cooper - 9:32 AM

Who are these Dogs of Volatility that exacerbate volatility as they hear the closing bell an hour before it rings?

Is it the dogs of margin?

Is it coincidence that Monday's big rally on big volume occurred in front of the FOMC?

The turn also coincided with the high of the last week of the Dec. 2006 ie, 1427.70 while yesterday's low was 1427.40. going below the levels where the year began puts Spyder portfolios on the other side of darkness for the year well into the turn of the second half of the year when money managers profits and bonuses are at stake. You wanna see panic?

There is a 1:00 PM media/analyst day at Apple (AAPL) with Jobs at the helm. AAPL will be worth keeping on the radar. Be that as it may the Wheel of Price and Time suggests 100 is a date with destiny this year.

Breakouts often punctuate dangerous inflection points: look at F5 Networks (FFIV), and Mastercard (MA), and the S&P on July 12th for example. I bring this up in the context of Wynn Resorts (WYNN) which powered higher on earning vis a vis Macau. The question to ask is what will happen to these earnings when a Global recession hits which China will also endure. I believe that is what the collapse in crude from a new incremental high suggests (just like the new high in the S&P?).

Position in WYNN

No positions in stocks mentioned.

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