Buzz Bits: Market's Upside Surprise
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What I... - Quint Tatro - 3:16 pm
What I Like
- Slowly climbing a wall of worry.
- Retail green in the face of higher oil… again.
- Positive breadth.
- Emerging markets (EEM) breaking.
- Small Caps (IWM) breaking.
What I Don't Like
Fighting Strength (DUG).
When Goldman (GS) goes red.
Being out of the office for meetings.
Technology Breaking ahead of Cisco (CSCO).
What I've Done
Threw in some DUG, who needs friends.
Started Starent Networks (STAR) ahead of break.
Added more ProShares Ultra S&P (SSO) with stop on new shares at day low.
What I'm Watching
Financial stocks. They continue to be my canary in the coal mine.
Ascent Solar (ASTI) over day high and I remount, giddy up.
Fuelcell Energy (FCEL) over day high, ditto.
Multi-day reversal developing in VMWare (VMW).
Positions in EEM, IWM, DUG, STAR, SSO, HMIN, NCTY, VMW
Doin' the Dance - Jeffrey Cooper - 2:04 pm
Take a look at the 10 minute and daily charts of Lindsay Corp. (LNN) with a 50 dma.
Click to enlarge
Click to enlarge
Studying the10 minute chart today of LNN shows it broke a triangle or flag on trade below par. However, now the stock is on the verge of signaling an ORB Reversal pattern on trade back up through the first half hour low, the opening range low, at 97.50ish to 98.
It looks like LNN may be doin' the dance, an up-down-up sequence at the 50 dma prior to a possible snapper rally.
Position in LNN
So they don't need capital? - Bennet Sedacca - 1:05 pm
Merrill (MER) says it doesn' need capital after it just said it doesn't need capital and then raised like $7 billion a week later.
Its Level 3 assets now stand at $82.4 billion, which is 227% of book.
I can at least applaud Fannie Mae (FNM) and Freddie Mac (FRE) for raising capital, selling equity and convertible preferred, growing their business and cutting the dividend. All the things that Merrill won't do, but something it may have wished it had done when the window shuts on capital raising, which I think is a late 2008-early 2009 event.
I remember asking the CFO of then public Connor Peripherals (it used to make hard drives) why the company was doing a convert deal after its stock had fallen 50 percent (this was in the early 90's).
His answer was 'because we can'.
This is very important I think. The firms that refuse to raise capital are the most likely to fail in my opinion. Because when the door shuts, it will shut fast. Trust me, I've seen it.
Diggin' on DUG - Sean Udall - 12:38 pm
I find the move in OIL the last two days to be... curious to put it mildly. Goldman Sachs is calling for $150-200, which seems at a minimum ill-timed. I've added to DUG near the morning lows.
Frankly, the move may be more mirage and bubble fervor than anything based on tangible fundamentals.
I've also been considering starting a position to short the EEM as I feel a theme I will be working off in the coming weeks to months is going contrarian against the thought that the international economy will fuel growth for the foreseeable future. As well as the fact that much of the gains in the EEM have been fueled by gains in commodities.
As previously stated, the Fed is well ahead of the curve versus other central banks. The US had made much greater progress in the unwinding of the housing bubble versus the EAFE countries. Also, recent economic indicators (ISM service and manufacturing, GDP, and personal income) don't indicate recession even though many pundits are still saying we're in one or calling for it.
In fact, I'm wondering when we'll start hearing the echoes of 1998. A period where the Fed fueled too much stimulus in front of a boom period.
At a minimum we may be entering a period where the smart money starts gearing up for the prospect that the Fed may have over-shot, fueling a bit too much stimulus, in an environment where the Fed will be reluctant to raise rates. However, I'm sure I'm quite early in this thinking.
Position in DUG
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