Buzz Bits: Dow, Nasdaq Turn Higher
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Bell Buzz - Todd Harrison - 3:32 PM
It's been a while since there was "liquidity risk." Not in the broader, macro sense--I'm talking about the day-to-day trading stuff. Whenever you see five handle gaps in the future, the potential for trappage increases in kind.
That's why we've suggested lightening the load and trading smaller in volatile tapes. It's a lesson that a few folks will likely learn too late. Don't be one of them---you're a Minyan.
Other Quickies from Kenicke:
- I didn't get a chance to Buzz this before I left but we saw a bevy of put punters into that midday head-fake higher. Schwab (SCHW) and Apple (AAPL) were among the maidens as traders feared missing the previously elusive short-side shekels.
- Driller? I don't even...Ya kinda figured that crude was bound to take a break and the OSX has responded in kind. Note the slippage back below the trend channel and through the fitty day. This is one of my favorite long-term sectors but I scaled out a while ago and wanna wait for a better entry. If I'm wrong? Opportunities are made up easier than losses.
- There is gonna come a point when the financials are gonna be the go-to screw for an upside schnitzel. That's alright, in my book, as long as you A) don't fall in love with them and B) understand that structural smoke exists. Heck, if the venerable Bear Stearns (BSC) can be down 20% in two weeks (25% since June), imagine what a lesser balance sheet must look like.
- Oh, we don't have to imagine. We've got American Home Mortgage (AHM).
- You know what's scary? I mean really scary? There are millions of Americans who are gonna look at the DJIA -25 and say "oh, another nothing day on Wall Street." That's why we created Minyanville--we want the masses to eat with the classes and the only way to do that is through financial education.
- Fare ye well into the bell and for all you Minyans heading to the Police concert, I'll see you at the Garden.
Under the Hood - Kevin Depew - 1:38 PM
- New point and figure sell signals are leading new buy signals by a very wide margin, 72 to 9.
- I cannot remember, in the past five years that I've been tracking these, another day with such a wide discrepancy in new sells versus new buys.
- Overall sell signals are leading by a huge 167 to 17 margin.
- I can't remember another time in the past five years where overall sell signals have exceeded overall buy signals by such a wide margin.
- And I am pretty sure we need to go back to 2003 to find the last time the oppposite condition, buy signals overwhelming sell signals, occurred.... which is food for thought.
- This is not what I would call capitulation... this is massive distribution taking place below the surface, and distribution that is not being conveyed by the seemingly benign .5% decline in the S&P 500 and Nasdaq.
Got Symmetry? - Jeffrey Cooper - 12:55 PM
Do y'all see how Mastercard (MA) stopped at 50% of the whole range of 110 to 170?
The midpoint of that 60 point range is 30 points or 140:
Click here to enlarge.
Apple (AAPL) is a good example of why is crucial to look at all time frames: the hourly chart over the past few days shows the 135 wall---at least for the first date there.
Click here to enlarge.
AAPL ain't lettin' us go all the way.
Not with my money homie!!! - Fil Zucchi - 11:10 AM
I will echo - and raise the volume on - Prof. Sedacca's view on bottom fishing in the homies: not for a long long time, and only once the balance sheets have shown staying power in what will likely be the homies' equivalent of a Mad Max world.
I have rolled down and out - and upped the size - of my S&P Homebuilders (XHB) put position. In my opinion, many homies are giving up the ghost of LBO's that will never happen, as folks come to grips with the fact that there is nothing to lever up, except the delusions of the Robert Toll's of the world.
Meanwhile, as I write, Beazer Homes (BZH) is plunging 27% on no known news. It might end up being the first casualty of the major homies, but I seriously doubt it will be the last. And even after a bunch of them will disappear from the lists, it will be a long time before the carnage fades from people's memory. What happened in housing was the greatest financial insanity the planet has ever witnessed; there will be plenty of time to scavenge the left-overs.
Position in XHB
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