Buzz Bits: Dow, Nasdaq Strong Again
Your daily Buzz & Banter highlights...
Long-Term Look at Financials - Kevin Depew - 3:26 PM
The first is a point and figure chart of Goldman Sachs (GS). The chart below shows the stock has violated a long-term trendline (2x3 scale) that extends back several years. This is a very important change in context worth noting.
Click to enlarge.
The next chart is a relative strength chart on a point and figure basis showing GS versus the S&P 500. The sell signal and column of Xs is another definitive context change warning that any positions should be for very short-term bounces.
Click to enlarge.
Finally, here is a chart of the iShares Financial ETF (IYF). It too shows a definitive context change; a long-term multi-year trendline has been violated.
Click to enlarge.
Minyan Darren asked about the financials as a trade. The bottom line, in my opinion, is there are much easier trades for those who are patient. GS and IYF may very well bottom soon and fly higher from here: who knows? But out of thousands of stocks, why try to trade the ones that are the riskiest?
Grandma Goldman Alert - Bennet Sedacca - 2:15 PM
Goldman Sachs (GS) is trying to put in a tested low on the hourly charts. See it below.
Click here to enlarge.
If it were to break above that downward sloping trend line, a move to 205-210 could not be ruled out.
Keep your eyes peeled, folks.This would have a huge impact on XLF as well.
Position in XLF
Total Recall and other Randoms - Jeff Macke - 1:25 PM
First Thomas the Train toys were recalled, now Mattel (MAT) has announced recalls on Elmo, Dora the Explorer and a slew of other popular favorites in the Jeffmacke household. Nothing tests a commitment to free-trade like the threat of your children being poisoned.
The toymakers, including my Hasbro (HAS) have taken at least their fair share of the sell-off as the consumer is increasingly called into question. Hasbro's dip is starting to get interesting but my general fear of the overall tape is keeping my bat shouldered. In other news...
- Clorox (CLX) is getting pounded today after the company whiffed of something the opposite of clean bleach in their report this morning. I featured CLX in a favorably toned piece regarding Proctor & Gamble (PG) on last night's Fast Money. I still like PG, who reports in the morning, for what it's worth.
- World Wrestling Entertainment (WWE) has given back a good portion of the gains from this morning, after the company reported decent numbers. We'll have Linda McMahon on the show tonight; suffice it to say, the company is facing "issues" well beyond the results of last quarter.
- In a very similar vein, Starbucks (SBUX) has gone negative. One of the hidden benefits of caffeine is that it (hopefully) made for quick trigger-fingers for those who took trading long-positions in the name. Big picture, SBUX has Venti issues.
Position in HAS
Some Observations - Sally Limantour - 11:41 AM
- Kind of bizarre but consistent with a stagflation theme, Rio Tinto (RTP), a leader in finding, mining and processing the Earth's minerals, reported that the rising cost of labor and materials hurt has hurt its earnings despite the commodity boom, reports the WSJ. Minyans, this is real inflation when the "stuff makers" are complaining about the high cost of stuff.
- Will Japan be a destination of dollar holders as they take advantage of the low value of the yen to go on a buying spree of Japanese assets? I think so, as they have weathered a 15-year deflation.
- "Pop and drop" is becoming a theme song for the indices.
- This week's Economist describes the recent shift in the behavior of sovereign wealth funds (SW) worldwide. I am becoming more intrigued by them and their future purchases day by day. This will be huge and the natural resource sector will be a large part of it as nations position themselves to have the resources to feed, clothe, house and mobilize their populations. Currently 1 bln people use two-thirds of the the world's natural resources. 5.6 bln use the other one-third. Meanwhile, 3 bln people are discovering capitalism.
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