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Buzz Bits: Week Ends on a Mixed Note


Your daily Buzz & Banter highlights.


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

Bell Buzz - Todd Harrison - 3:38 pm

  • A few folks have offered that the 'expedited stimuli checks' are responsible for today's bid. That's the silliest thing I've heard since "Toddo, you don't like chocolate, do you?"

  • Yes, the VXO used to live in a lower range. The difference is, that period occurred when liquidity was being flushed through the system and the imbalances were only just beginning to percolate.

  • One could argue that the trillion dollars from the government (and no end in sight) makes for a similar situation. Perhaps, but the cumulative nature of debt and derivatives--not to mention the 40% decline in the dollar--creates a much thinner margin for error. And that, my friends, is why the action in the greenback is oh-so-important.

  • So, who bought ALL THOSE PUTS in Bear Stearns (BSC) days before the stock dropped like a rock? Kinda weird how we never got an answer on that. Gimme a tin foil hat and put me on a grassy knoll and I'll have a field day!

  • S&P 1405. Keep it on ye radar, Yo.

  • I remember when I hung up my big money management cleats, I actually thought to myself "Self, it's time to enjoy the ride a bit more." Funny thing is, the pressure actually upticked, if that's at all possible. We spoke--Jeez, eight years ago?--about the long hard road and the likelihood that it would take three times as much work to make half as much coin. Who knew that would be so prophetic? And so it goes...

  • Which is precisely why we need to remain mindful and conscious of the journey itself. I write this as much for myself as I do for you. When the bell rings, run--don't walk--to something that'll put a smile on your puss. I know I will...

  • Fare ye well, friends.


HUD? - Andrew Jeffery - 1:07 pm

It's interesting that the Office of Housing and Urban Development (HUD) - that oversees the FHA - doesn't support Sen. Frank's proposal to expand its role in helping troubled borrowers.

This says two things. First, the FHA knows keeping borrowers on homes they can't afford may be good for individuals who got in over their heads, but its bad for the system itself.

Second, compare its attitude to that of Fannie Mae (FNM) and Freddie Mac (FRE), whose profit motive makes them ask for a bigger and bigger role regardless of risk it poses to the system. Incentives are the key to understanding why these entities do what they do.

That's a nice pair of breaches you have there... - David Waggoner - 12:24 pm

I always give 1.618 extensions that are in the context of a possible motive wave (or impulse wave) the benefit of the doubt, because probability sides in favor of that outcome.

However, our motive wave thesis from yesterday is technically breached now. On the other hand, I consider the high at c (black arrow on the chart) a breach of Z, indicating that the combination pattern down (Z down to Y) cannot be extended any further.

So, where do we go from here. Either this is an a-b-c pattern as marked coming down from the black arrow c, and we can expect an extension of Y to c (black arrow) to take us higher, or, if we reach the 1.618 retracement (137155) traveling down, bounce for 3 waves. Then extend to 135505, we need to consider that impulse waves could be returning in the direction of trend.

I know I'm essentially telling you the market can go up or down from here, but the devil is in the details, and by paying attention to how it goes up or down from here can tell you a lot about what will probably follow.

Click to enlarge

Time to Focus! - Jeffrey Cooper - 10:52 am

Focus Media Holding (FMCN) (see the daily chart for the year with a 50 dma below) is embedded in a persistent downtrend and appears poised for an outside day down from the point of the last sell pivot in early April. When a stock doesn't even know there was an April advance... it's talking, perhaps yelling, that it's in weak position and under distribution.

Click to enlarge

Additionally, note how CF Industries (CF) reversed from a gap down open that tagged the prior highs on the third big day down. See the daily chart for the year below.

Click to enlarge

Dat's how da parabolic arcs break: the market turns on a dime, most traders cannot. As my trading bro says "Wrong & Gone" or as I like to say Hit & Run.

Position in FMCN

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