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Buzz Bits: Dow, Nasdaq Slide Into Red


Your daily Buzz & Banter highlights...


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

Earnings Report - MV News

  • National Semiconductor (NSM) reports 4Q EPS of $0.28 vs. $0.23 cons on revs of $455.9 mln vs. $451.33 mln cons.

Answers I Really Wanna Know...- Todd Harrison- 3:16 PM

  • Between the nosty breadth and the higher dollar, was the writing on the wall out of this morning's gate?

  • Have the asset allocators even stepped in yet?

  • What happens when they do? (gulp)

  • While Hoofy will try to make a stand at S&P 1500 (above the 50-day), he can't recapture BKX 115...can he?

  • So, has anyone figured out what Felix did while Oscar was sportswriting?

  • Which dip do the buyers sell?

  • Can King James claim his crown?


Quick Note on Bonds- Scott Reamer- 1:38 PM

The 2-10 spread has ballooned 10 basis points day/day. I can't find another time this has happened since the curve started steepening from its inversion low in November 2006.

As an indicator of risk preference, it's important in the Greenspan/post Greenspan era where credit growth has fueled economic growth entirely. People will look into it for all sorts of macro reasons...China not buying, inflation expectations...blah blah blah. The only thing that it indicates, however, is decreasing time preference (decreasing risk preference)...people selling long dated treasuries and buying short dated ones.

Click for larger image

The "4-Horseman"- Jeffrey Cooper- 11:11 AM

The weekly swing chart on the S&P has finally turned down for the first time in almost two months.

If Hoofy is still in charge, support should be close in terms of both Time & Price.

As for the new proclaimed 4-Horsemen by some tele-evangilistas: Google (GOOG), Apple (AAPL), Crocs (CROX), Amazon (AMZN) .

We recall well the Costanza-like current cold water treatment in the former 4-Horseman, Dell (DELL), Microsoft (MSFT), Intel (INTC), Cisco (CSCO).

The first shall become last and the last first, not because the stories aren't good for bedtime, but cause everyone and their sister has been put to sleep by the nursery rhymes---if the Street has all bought into the drumbeat, who is left to buy except the shorts who may pull a famous hedge stunt and reverse and go long because they can't stand it anymore and buy momo in order to ketchup---and so the song always remains the same. But, it's the singer, not the song, as Mick opined.

I am covering my short REIT's here----for the time being.

Position in AAPL

"The time for honoring yourself will soon be at an end."- Kevin Depew- 9:38 AM

The difficulty in equities since 2003 has been having the discipline to remain involved. The point and figure bullish percent indicators have been helpful to some extent, but even those indicators for the S&P 500, NYSE, Nasdaq and Russell 2000 have occasionally reversed to negative (even if only briefly) and the challenge has been transitioning back into a more aggressive equities posture when they have reversed back to positive.

For example, the S&P 500 bullish percent since reversing to positive in March 2003 has reversed to negative eight times. It's currently at 78%. Moreover, of the 50 months that have transpired since March 2003, this bullish percent has spent at least 28 of those months above the elevated risk level of 70%. And it's never once fallen below 48%.

One of the common themes I hear from traders is that "this market continually makes me feel foolish." Indeed. I can relate. But why? Why is it that this market makes so many feel so foolish? I have at least a partial answer.

Take a look at this chart. It's a percentage-based (I used a scale of 3%) point and figure chart of the S&P 500 going back to 1999.

There are a couple of things to take away from this chart.
1) There have been no pullbacks (using the 3% scale) for this chart since January into March of 2003. None. Zero. Nada.
2) This move off the 2003 lows has been unprecedented.

Click to Enlarge

The "why?" of this chart is certainly something interesting to consider, but is knowing, for example, that this "unprecedented run" is concurrent with an "unprecedented run" in M3 any consolation? I doubt it. The time for this market honoring itself will one day be at an end. It is inevitable. The question is the timing of the inevitability. For now, there are few signs that time is anywhere in the immediate future. The reality is that demand remains firmly in control of this market.
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