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Buzz Bits: Dow, Nasdaq Finish Down


Your daily Buzz & Banter highlights...

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

Deep Breaths - Todd Harrison - 3:16 PM

I was just huddlin' with President Fish about Minyan matters and stepped back to my turret to find a plethora of emails and instant messages about people "panicking" on financial television. As I wasn't watching, I can't comment on that, but what I will offer is that the time to understand the credit conundrum was in the days, weeks and, yes, years before it began to manifest.

Yes, we're often early in Minyanville but we like to say that we offer the financial news you need to know before you know you need it. With Bear Stearns (BSC) off 30% this summer, it's easy to point fingers and make accusations. The time to proactively position, however, was in front of that move. Like, say, May, when Professor John Succo started a long thread of education on the risks of CDO's and mortgage debt.

We're not taking a shot or rubbing salt---that's never been Minyanville's style--we're just asking that you keep things in perspective. It's wild, wooly and very thin out there, a marked difference from the conditioned complacency and low volatility that alotta traders and investors are used to. Adapt your style to the tape and play a bit smaller until the smoke clears.

And please make your own decisions as you're the one who will reap the reward or bear the consequences. It's one thing for someone to scream that the DJIA will be 1000 points higher in one breath and suggest financial armageddon a few days later. It's an entirely different thing to base your trades on that.

Fare ye well into the bell.


Under the Hood - Kevin Depew - 1:15 PM
  • Yesterday was the first session in 10 where net new point and figure buy signals exceeded new sell signals.

  • That streak may stop at one for now, however, as today new point and figure sell signals are leading new buy signals by a slim 25 to 23 margin.

  • Overall sell signals are also in control, leading 65 to 42.

  • There continues to be distribution taking place internally.

  • With yesterday's action the NYSE High-Low Index moved below 20%. We will now be watching for a reversal up in this index as a sign the negativity in the market is getting a bit extreme.

  • As demand begins to return to stocks from oversold levels and extremes in negativity, I want to concentrate any trades and buys in groups with positive relative strength.

  • Although Financials (including Real Estate, Banks, Savings and Loans and Insurance sectors) are among the most oversold broad groups, the relative strength is so poor in those individual sectors that any oversold bounces should be outright sells.

  • Two groups that are showing positive realtive strength, however, are Semiconductors and Telecom.

Rock n' Roll Fantasy - Jeff Macke - 12:13 PM

Video game maker and Jeffmacke holding Activision (ATVI) is rocking higher today after boot-stomping estimates, raising guidance and generally smacking the performance ball all over the park last night.

Also helping the company is the implosion of Take-Two (TTWO), which delayed the release of the next generation of its Grand Theft series until sometime after Christmas. The working theory (as expressed here) is that the Grand Theft delay benefits the makers of other "hyper-violent" titles.

A few thoughts on the moves today:

  • I'm still holding my ATVI; I like the action today but it's a long-term idea, as I've discussed in this space to the point of being quite tiresome.

  • Having spent my morning watching my 4-year-old's graduation from music camp only to arrive back in my office just in time to see Dylan wielding CNBC's Guitar Hero ax, I'm inspired to pitch my idea of Fast Money: The Musical (again) for tonight's show.

  • The plastic guitar Dylan was holding has been hooked up to a Sony (SNE) PS2 outside the CNBC studio for months. To the best of my knowledge, the segment interviewing the ATVI CEO was the first time the faux guitar has ever been touched. CNBC's Nintendo (NTDOY) Wii, on the other hand, is seldom idle. Draw your own conclusion.

  • Electronic Arts (ERTS) is acting well this week but I still prefer Activision; I'll take the company raising estimates versus the one lowering the bar every time. Activision is hitting its stride while ERTS is still finding its footing under a new CEO.

Position in ATVI

Tell of The Tape - Jeffrey Cooper - 9:40 AM

If Goldman Sachs (GS) is the tell of tells...

...then the midpoint of the leg up from the last weekly low at 140 to the June 234 high (yes, it was that recent) is 187.

Yesterday, GS closed at 187 and change. It will be important for it to hold this level on a weekly basis or it will project lower prices.

Keep in mind that 360 degrees down from 234 is 177. It will be interesting to see how these levels play out. Perhaps an up-down-up sequence and a low of backing and filling between the two will occur next week.

Or, given the rapidity of price recently, maybe it'll happen in what is becoming "The Infamous Last-Half-Hour Trade."

A look at the hourly S&P for the last 10 days shows a very short term possible inverted head and shoulders. Consequently, 1460ish or the right shoulder is a pivotal level.

On the Radar:

  • I am not shorting Crocs (CROX) but it has traced out a potentially bearish pattern in the process of testing last week's high volume reversal. I am stalking it, though.

  • Other beta blockers for the bull case that may be testing reversals over the next days and week are Apple (AAPL), (AMZN) and Deckers Outdoor (DECK).

  • On the dark side, Western Refining (WNR) looks like it has some ketchup to Marathon Oil (MRO) and Holly Corp. (HOC).

Position in WNR

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No positions in stocks mentioned.

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