Buzz Bits: Dow and Nasdaq End Higher
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Closer - Sean Udall - 4:01 p.m.
SOX is retaking the 89 day moving average and has "churned" or "consolidated" (you pick Toddo) -- above the 50 dma. This is the second time this moving average has been breached intraday. It also confirms the three white soldier formation formed about a week ago.
The right of spring is dueling analyst comments and after about three months straight of analyst broadly panning chip stocks we are now starting to see the duels between bulls and bears form in this space. Today we saw a bullish chip call.
I can't say I'm broadly bullish on the whole semi-group but I really like some sub-sectors. And I think we have at least a neutral technical stance with the 50 dma line trying to curve northward on the SOX.
Specifically, for the multi-year growth profile the communication chips stocks are insanely cheap. And from a purely intrinsic and balance sheet or LBO type valuation level many semi-cap names are equally cheap.
Earnings won't be solid except for nary a name or two, and I'm not sure even that many chips names will have beat and raise quarters. However, that may not matter much unless many names spike 20-30% or more of currently distressed levels.
Lastly, one thing I am sure of is we will see a lot more upgrades of Intel (INTC) closer to $30 than, here closer to $20.
Answers I Really Wanna Know... - Todd Harrison - 2:38 p.m.
I'm telling ya, these media types make out like bandits Danny. I mean honestly, who takes lunch meetings during the trading day?
- Can I please take my dollar loss in Goldman (GS) and go home? (Yep)
- While rolling up my stop in Google (GOOG) with hopes of running my winners and cutting my sinners?
- You think there's any societal acrimony going on at the airport?
- Does Jimmy Buffett get the snaps he deserves?
- Y'all notice that market internals are hanging tough at 2:1 positive?
- Who first figured out that shark liver oil would be the most active ingredient in Preparation H?
- Why isn't it Preparation I? Or J?
- Is anyone else looking forward to President Fish's Yahoo (YHOO) Racing Form?
- Now you know why they call it contra-hour, eh?
- Just because this guy was the Comptroller General of the United States, what gives him the credentials to say we suffer from a "fiscal cancer that has catastrophic consequences for our country?"
- You mean, besides the fact that he was the Comptroller General of the United States?
Position in GOOG
Gold Finished With Recovery Rally? - Michael Paulenoff - 11:35 a.m.
Yesterday my work was telling me to await one more new recovery high into the 93.20/60 area prior to considering a short position in the streetTRACKS Gold Shares (GLD).
Naturally, prices have weakened this morning. However, I'm NOT convinced that the recovery rally off of the 4/01 low at 86.05 is complete on the upside. I'll stand aside for a while longer prior to committing money to the short side of the GLD.
Click to enlarge
Private Equity Panic - Minyan Peter - 10:24 a.m.
At the risk of a gross and premature generalization, I think a big part of what we're seeing on the part of private equity firms right now - in things like WaMu (WM) and Citi (C) - is "panic" buying. With most of their current portfolio deals going south, and the prospect of any new LBO deals more than remote, firms are having to transform themselves quickly into vulture mode. And with many private equity firms now public, suddenly quarter earnings pressure means something to these guys. And if you get paid "transaction fees" for doing a deal - whether it turns out to be good or bad - you do it, because it at least shows you are out there and it buys you time to figure out what your business model is going to be in the future.
At the risk of becoming bullish on financial stocks, my guess is that we'll see a huge amount of money being moved off the sidelines by private equity into the financial services space just so these firms can be seen doing something (and as aside, I have never seen a business that acts like a group of lemmings like private equity). Having talked to many in 2006 and 2007 they knew they were overpaying, but they were so desperate for market affirmation that they couldn't help themselves.
Again, at the risk of being early, I think that's what we're seeing now.
Having been way too late to their traditional private equity business, they are now going to be way too early to the vulture business.
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