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VIDEOBuzz on the Street: SPX Low May Be in for the Year
By
Terry Woo Jul 23, 2010 2:20 pm
Some of this week's most insightful and timely vibes.
All day and every day, some of the stock market's best and brightest traders and money managers share their ideas, insights and analysis in real-time on Minyanville's Buzz & Banter. Check out some of the best of the buzz and for those Minyans not currently subscribed, click here for a free two-week trial.
Note: Some links may require Buzz subscriptions.
Monday, July 19, 2010
Bullish Divergence Building
Marc Eckelberry
ZN (ten year bond) is starting to diverge and moving yields slightly up today, as equities struggle. This might turn out to be the worst call of my career, but I have rarely felt this bullish. Gridlock coming, no inflation, corporate growth, massive negativity on rallies, bond yields at historic lows.
All it takes now is for NDX to regain the 200 ema at 1825, and we could see a magnificent squeeze. Prudent traders should wait for that daily close, but for those who started shorting bonds Friday, it is looking much better today.
ZN resistance is still 123'105 and holding. The only caveat I have in terms of timing is that we are going into a 5 week expiration cycle, and the first one of those tends to be weak. Nevertheless, I would be very careful shorting equities.
Flipping Over S&P
Smita Sadana
Professor Sadana,
Can you post a chart of the S&P 500 in reverse? I think it would be interesting to see.
Thanks,
Minyan K
Hi Minyan K,
Indeed, a simple flip can provide an interesting visual perspective..Here you go!
The second one is my annotated version.
-Smita
Click to enlarge
Click to enlarge
Tuesday, July 20, 2010
Real Men Don't Footnote Their Earnings Release Headlines
Peter Atwater
This morning Goldman Sachs (GS) reported second quarter earnings.
But note the headline:
As I wrote recently, real life is filled with one-time events and the longer managers, boards of directors and shareholders deny this reality, the more unprepared they will be for what is ahead.
Morning Dew
Todd Harrison
I strap myself into the hallowed halls of MVHQ following three spirited segments with the fine folks at Yahoo Tech Ticker. We will, as always, post those videos to the 'Ville so no need to stray; some of us have lingering abandonment issues.
Here's a top-line vibe of what's flowing through my fingers:
Be careful for what you wish!
IBM (IBM)? Down a finski in the low $120's, which is the bottom end of the trend channel we flagged yesterday. (Chart 1 Below)
Ditto Texas Instruments (TXN); $23ish is a level that needs to hold as a bovine backstop. (Chart 2 Below)
Apple (AAPL)? We've flagged the dandruff in and around $244--which "works" to $206 through a pure technical lens but toss an asterisk on that puppy as there's a looming fundamental catalyst tonight. All eyes on you!
Goldman (GS)? $134 and $150 are the levels to watch--it's uncanny how the settlement squeeze stopped, dropped and rolled right there, eh? That's just the technical lens; we've seen a trend emerge across the financial industry earnings season (lower trading revenues, which isn't a shocker given the War on Capitalism). (Chart 3 Below)
Johnny John (JNJ)? Yikes; that's a perceived defensive play and they too are cutting their full year forecast.
Away from that? Housing starts were Punky Brewster, throwing another log on the slower growth fire. If there is a ray of sunshine of late, squint and you'll see sovereign bond auctions across Europe. Greece, Spain, Portugal and Ireland got off some supply, which may be anecdotal but it's a piece of the ever-changing global puzzle.
Alotta moving parts, Minyans; keep your right hand up and let's hit this Turnaround Tuesday with some wind in our sails and some spice in our tails.
Click to enlarge
Click to enlarge
Click to enlarge
CAM Highlight
James Anderson
Cameron International (CAM) has been acting spectacular this week after I bought it a couple of hours too early last Friday.
My target was $40, and with the stock at $38 and the August 37.50 calls trading at $2.30, I'm going to write those calls against my long stock. A $39.80 exit is close enough in this crazy market.
Position in CAM
Wednesday, July 21, 2010
The Low For the Year Is In
Scott Redler
Yesterday's market looked like death. The S&P was coming into the 50% retracement zone I isolated last Friday.
This is why you do your plan ahead of schedule, because when you’re in the moment it’s hard to perform.
S&P 1052-1058 was my zone, and he hit 1056.
I put a 85%-90% chance that low of the year is in, and the next major technical obstacle will be to break above 110.08 (1099) which would give us our first higher high.
Entries and exits are still key, but I would try and buy dips and rotate through the best patterns.
I would even say, hold a model portfolio moving forward. For me that would be in stocks like: Apple (AAPL, Baidu (BIDU), VMware (VMW), SanDisk (SNDK), Amazon (AMZN), Netflix (NFLX), Microsoft (MSFT), Cosco (CSCO), Freeport-McMoRan (FCX), US Steel (X), Las Vegas Sands (LVS), Goldman (GS), JPMorgan (JPM), Oil Services (OIH) and the SPDR Gold Shares (GLD).
Of course you can short SPY at extreme overbought point’s for cash flow, but the real money will be made via Macro long into the end of the year.
Click to enlarge
Click to enlarge
Short Range Oscillator
Smita Sadana
There are several concentric circles around the market – they could range from overbought to not-so-overbought but they all lie within different time periods, akin to the various to-do-lists at my desk. Some of the things on my list are immediate in nature and have to be tackled now while others are 'to be postponed' till later. Adjusting and reacting to these time frames of the market offers the greatest challenge (and opportunity) for traders.
Speaking of very short-term conditions, yesterday the Standard and Poors Short Range Oscillator (courtesy of Standard and Poors) hit an overbought +7.9. This is the highest reading in about a month. The reading higher than this in the recent past was +8.5 on June 21st.
The biggest test of a market is how it reacts to overbought and oversold conditions.
Note: Some links may require Buzz subscriptions.
Monday, July 19, 2010
Bullish Divergence Building
Marc Eckelberry
ZN (ten year bond) is starting to diverge and moving yields slightly up today, as equities struggle. This might turn out to be the worst call of my career, but I have rarely felt this bullish. Gridlock coming, no inflation, corporate growth, massive negativity on rallies, bond yields at historic lows.
All it takes now is for NDX to regain the 200 ema at 1825, and we could see a magnificent squeeze. Prudent traders should wait for that daily close, but for those who started shorting bonds Friday, it is looking much better today.
ZN resistance is still 123'105 and holding. The only caveat I have in terms of timing is that we are going into a 5 week expiration cycle, and the first one of those tends to be weak. Nevertheless, I would be very careful shorting equities.
Flipping Over S&P
Smita Sadana
Professor Sadana,
Can you post a chart of the S&P 500 in reverse? I think it would be interesting to see.
Thanks,
Minyan K
Hi Minyan K,
Indeed, a simple flip can provide an interesting visual perspective..Here you go!
The second one is my annotated version.
-Smita
Click to enlarge
Click to enlarge
Tuesday, July 20, 2010
Real Men Don't Footnote Their Earnings Release Headlines
Peter Atwater
This morning Goldman Sachs (GS) reported second quarter earnings.
But note the headline:
Goldman Sachs Reports Second Quarter Earnings Per Common Share of $0.78. Excluding the Impact of the U.K. Bank Payroll Tax and the SEC Settlement, Earnings Per Common Share Were $2.75. (1)As someone who loves footnotes, I immediately went to see what the "(1)" referenced. And per, Goldman's release it states:
Management believes that presenting the firm's results excluding the impact of the $600 million U.K. bank payroll tax and the $550 million SEC settlement is meaningful as these are one-time events and excluding them increases the comparability of period-to-period results.With all due respect to the management team at Goldman Sachs, I find it hard to believe in this environment that either higher taxes or litigation are "one-time events" for the financial services industry.
As I wrote recently, real life is filled with one-time events and the longer managers, boards of directors and shareholders deny this reality, the more unprepared they will be for what is ahead.
Morning Dew
Todd Harrison
I strap myself into the hallowed halls of MVHQ following three spirited segments with the fine folks at Yahoo Tech Ticker. We will, as always, post those videos to the 'Ville so no need to stray; some of us have lingering abandonment issues.
Here's a top-line vibe of what's flowing through my fingers:
Be careful for what you wish!
IBM (IBM)? Down a finski in the low $120's, which is the bottom end of the trend channel we flagged yesterday. (Chart 1 Below)
Ditto Texas Instruments (TXN); $23ish is a level that needs to hold as a bovine backstop. (Chart 2 Below)
Apple (AAPL)? We've flagged the dandruff in and around $244--which "works" to $206 through a pure technical lens but toss an asterisk on that puppy as there's a looming fundamental catalyst tonight. All eyes on you!
Goldman (GS)? $134 and $150 are the levels to watch--it's uncanny how the settlement squeeze stopped, dropped and rolled right there, eh? That's just the technical lens; we've seen a trend emerge across the financial industry earnings season (lower trading revenues, which isn't a shocker given the War on Capitalism). (Chart 3 Below)
Johnny John (JNJ)? Yikes; that's a perceived defensive play and they too are cutting their full year forecast.
Away from that? Housing starts were Punky Brewster, throwing another log on the slower growth fire. If there is a ray of sunshine of late, squint and you'll see sovereign bond auctions across Europe. Greece, Spain, Portugal and Ireland got off some supply, which may be anecdotal but it's a piece of the ever-changing global puzzle.
Alotta moving parts, Minyans; keep your right hand up and let's hit this Turnaround Tuesday with some wind in our sails and some spice in our tails.
Click to enlarge
Click to enlarge
Click to enlarge
CAM Highlight
James Anderson
Cameron International (CAM) has been acting spectacular this week after I bought it a couple of hours too early last Friday.
My target was $40, and with the stock at $38 and the August 37.50 calls trading at $2.30, I'm going to write those calls against my long stock. A $39.80 exit is close enough in this crazy market.
Position in CAM
Wednesday, July 21, 2010
The Low For the Year Is In
Scott Redler
Yesterday's market looked like death. The S&P was coming into the 50% retracement zone I isolated last Friday.
This is why you do your plan ahead of schedule, because when you’re in the moment it’s hard to perform.
S&P 1052-1058 was my zone, and he hit 1056.
I put a 85%-90% chance that low of the year is in, and the next major technical obstacle will be to break above 110.08 (1099) which would give us our first higher high.
Entries and exits are still key, but I would try and buy dips and rotate through the best patterns.
I would even say, hold a model portfolio moving forward. For me that would be in stocks like: Apple (AAPL, Baidu (BIDU), VMware (VMW), SanDisk (SNDK), Amazon (AMZN), Netflix (NFLX), Microsoft (MSFT), Cosco (CSCO), Freeport-McMoRan (FCX), US Steel (X), Las Vegas Sands (LVS), Goldman (GS), JPMorgan (JPM), Oil Services (OIH) and the SPDR Gold Shares (GLD).
Of course you can short SPY at extreme overbought point’s for cash flow, but the real money will be made via Macro long into the end of the year.
Click to enlarge
Click to enlarge
Short Range Oscillator
Smita Sadana
There are several concentric circles around the market – they could range from overbought to not-so-overbought but they all lie within different time periods, akin to the various to-do-lists at my desk. Some of the things on my list are immediate in nature and have to be tackled now while others are 'to be postponed' till later. Adjusting and reacting to these time frames of the market offers the greatest challenge (and opportunity) for traders.
Speaking of very short-term conditions, yesterday the Standard and Poors Short Range Oscillator (courtesy of Standard and Poors) hit an overbought +7.9. This is the highest reading in about a month. The reading higher than this in the recent past was +8.5 on June 21st.
The biggest test of a market is how it reacts to overbought and oversold conditions.
Position in GS and Gold Stocks
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