Phil Erlanger
04:27:09 PM
No positions in stocks mentioned.
Latest NYSE Short Interest Numbers
Last Friday the NYSE reported the latest set of short interest numbers. Short interest numbers for the NYSE are reported as for the period of trade date June 10th with settlement date of June 13th rose to 17,654,028,383 from 16,431,281,684. The overall increase with the new data is 1,222,746,699 for an increase of 7.44%. This is the largest absolute increase and one of the top increases in the last few years. Yet, in our work short selling is starting to climb on an intensity basis but not nearly as high as last July.
1,868 names saw their short interest rise while 969 saw their positions decrease on the NYSE/AMEX.
Dedicated short sellers made 0.86% in May as reported by www.hedgeindex.com. YTD short sellers have made 2.69% through May.
MV Trivia
03:38:20 PM
No positions in stocks mentioned.
17,508
Thats how many islands comprise the republic of Indonesia! As of 2006, Indonesia's population reached 222 million people. It is the world's fourth most populous country and the most populous Muslim majority nation.
Congrats Minyan Bradley Hallwig!
Choose your Critter!
Jeffrey Cooper
03:24:01 PM
No positions in stocks mentioned.
Apple Stein n' Handle?
Is that a Stein & Handle pattern on the 10 minute chart of Apple (AAPL) today?
Click here to enlarge.
If so, that's bullish into the close on the stock.
Minyanville Staff
03:10:00 PM
No positions in stocks mentioned.
Tuesday Radar
The pace picks up tomorrow. Here's a quick look.
Economics
9:00 S&P/CaseShiller Home Price Index: 172.2 Prior
9:00 S&P/CaseShiller Composite – 20 (Y/Y): -15.9 cons.
10:00 Consumer Confidence: 56.3 cons.
10:00 Richmond Fed Mfg. Index: -6 cons.
10:00 House Price Index (m/m): -0.5% cons.
Click here for the full trading radar.
Rod David
03:01:11 PM
No positions in stocks mentioned.
Stocks mentioned this week in Barron's
* Bye, Bubble? The Price of Oil May Be Peaking - Where you want to be when the bubble bursts - DVN, APA, XTO, XOM, CVX, COP, BP, MRO, VLO
* Stocks for a Season of Caution - Focusing on good stocks with limited downsides - NBK, WMT, IBM, GE, BRKA
* This Bud's for All of You - If InBev buys Anheuser, other brewers will cheer -- with one exception - BUD, TAP, FMX
* Why Cable's Mighty Mite RCN Looks Undervalued - Small cable provider RCN is holding its own against mega-sized rivals - RCNI, TWC, CMCSA, VZ
* Beating Apple's New iPhone to the Punch - Sleek new Touch Diamond outshines Apple's smartphone -- and could put High Tech Computer on the map - GOOG, MSFT, RIMM
* A Two-Pronged Attack on a Killer - Onyx's promising cancer treatments make its volatile stock look cheap - ONXX, BAYRY
* Carl Blogs, Jerry Bumbles, Steve Balks, Yahoo! Bleeds - What's a Yahoo! Investor to do? Intel should've listened to us - YHOO, INTC, MU, STX, SHOR
* Ariba -- Dot-com Flameout's New Fire - A dot-com bomb's new lease on life - ARBA, ORCL, EBAY
Todd Harrison
02:50:55 PM
No positions in stocks mentioned.
Hut, Hut, Hike?
With the FOMC meeting around the corner and all eyes on language, some folks have offered that the tape is on hold until clarity emerges. Some top line vibes:
* Fed Fund Futures are pricing in a 12% shot of a 25 basis point increase this meeting, 36% in August and 57% chance in September.
* I don’t think we’ll see movement on Wednesday but all eyes will be on the text for hints regarding future meetings.
* Current psychology doesn’t support a rate hike due to an economic uptick. Given credit conditions, I continue to believe that raising rates would be a massive mistake.
R.P.
Jay Shartsis
02:40:00 PM
No positions in stocks mentioned.
Bottom?
So what’s bullish in here? Not Much.
The QQQQ did hold its prior low at $42.00 and has turned up. That created a positive divergence to the new lows in the Dow Industrials and S&P 500. Same is true for the RUSSELL 2000.
But how much weight can I assign this?
A good bottom probably demands a jump in the put/call ratio and a jump in the VIX, neither of which has happened. Also a discount in the VIX vs. its futures would be bullish, but remains at a premium, as July VIX has a premium of about a point to cash VIX. We will probably see a discount of about $1.50 at the low, and for a few days.
Minyan Peter
02:33:40 PM
No positions in stocks mentioned.
That's a lot of dough!
To Prof. Depew's column from earlier today, while a $15 billion reduction in credit card lines may sound significant, it isn't.
Citigroup (C) alone had over $1.1 trillion, yes that is with a "t" of credit card line commitments as of the end of March.
Sean Udall
02:28:05 PM
No positions in stocks mentioned.
Minyan Mailbag: Alvarion
Professor Udall,
What do you make of the move of Alvarion (ALVR) on Friday on heavy volume, against the direction of the market?
I have been holding ALVR for quite a while, and believe it is significantly undervalued, especially in light of recent news about the Sprint (S)/Clearwire (CLWR) WiMAX deal and now Alvarion's deal with Nortel (NT).
Thanks,
Minyan Greg
MG,
I think ALVR is one of the best of the cheapie tech plays and lately it's been inking contracts with abandon. However, today is a good example of how it can trade. Get a market where beta is weak and/or small/mid cap volume is light and bids are scarce and it can get hit pretty hard percentage wise. Additionally, you've got the added angst that is associated with Israeli stocks and the latest rumors don't help.
As of right now ALVR is sitting on some support and the daily technical averages are still mildly positive. If this level breaks then the $6's come into play again. Fundamentally, I think ALVR is one of the better Wimax plays and at two times sales and three times cash, it is well priced given growth rates.
I'll be back long again when I feel like I have a little market support, or on anything around $7 or lower.
-Prof. Udall
Bennet Sedacca
02:20:24 PM
No positions in stocks mentioned.
COME AND GET EM!!!!
That's right folks, Prudential Financial (PRU) preferred at 9%! Hoowah!! Am I buying? Nope. Not yet.
Everything seemed cheap at 7, 8 8 1/2 and now 9. Keep in mind, these securities aren't trading with spreads versus Treasuries, per se, but more like a junk bond or a common stock.
It's likely that we're getting closer and closer to these deals not getting done as Prof. Zucchi alluded to earlier.
But I have some gruesome stories from the 1990-1991 time frame that make me be patient. Even back then, 'things that can't happen', happened. So this time around, I imagine it will be prudent to be even more patient.
Risks in credit and bonds in general, remain high.
Lance Lewis
02:14:22 PM
No positions in stocks mentioned.
Minyan Mailbag: Crazy Golds
Dear Professor Lewis,
I am a loyal Minyan and greatly value your posts on the site.
I'm sure you saw it, but I just want to make sure. After the close Friday there were two very large prints for both Golden Star Resources (GSS) and Nevsun Resources (NSU). The GSS was much larger. Based on the levels they were buys. This is the type of action I love to see when long the name, as I am of both.
Looking forward to more of your color and feeling long and strong the miners.
-Minyan Nick
MN,
Thanks for the kind words.
Yes, I saw the craziness late on Friday. It was pretty wild. There's definitely been a big buyer in NSU for the last several weeks, which is good to see. However, the late day surge in volume and price on Friday in GSS, NSU, Great Basin Gold (GBN), and a few other names (while others were correspondingly knocked down on big volume, like Gammon Gold (GRS)) were probably more a reflection of some quarterly index rebalancing I suspect, even though as a bull I'd much rather it be a buyer that wanted stock so badly that he couldn't wait. :)
We saw the same thing on the quarterly expiration in March if you will recall in GSS and some other names that exploded big on the close into that expiration, while other names were correspondingly dumped.
The good news is that all the golds (including GSS) are acting well today in the face of the pounding that gold took this morning in the futures.
-Professor Lewis
David Waggoner
02:07:46 PM
No positions in stocks mentioned.
Assessing the Big Picture
In The Effectiveness of Elliott Wave Analysis I shared the 3 verses 5 wave conundrum down from the October high and the possibilities of where we were in the process. In my analysis I continuously evolve all working theses and trade in the direction of the dominant one.
I had previously considered a flat following three waves down from October as part of a five wave structure, but put it on the back burner in favor of other patterns because of ratios, and then abandoned it altogether when price broke above 1406 (the bottom of wave 1 of the five wave down thesis) since wave 4 cannot retrace past wave 1.
In reviewing multiple time frames and wave structures, I now favor an expanded flat (a-b-c) thesis as the strongest probable retracement pattern following the move down from October (A-B-C). Since it is not possible for this to be a retracement for a 3 of 5 wave structure down, I must shift my bias to a 3 wave corrective structure down from the October high.
Click to enlarge
This opens up a lot of possibilities. I mentioned in Bulls Take Heart that my short-term bias was that 3 waves had followed a possible 5 waves up from the bottom. Tying it together, the 5 waves is the C wave of the expanded flat. Since we broke below 1324 I now need to identify the structure to determine where we are in the move following the c wave of the expanded flat. Up to that point I had identified 3 waves (a zigzag) and thought we might catch a turn.
Since then, we have extended down, but the structure currently looks like another smaller zigzag.
Click to enlarge
In the short-term, I expect to hold here, or near here, and get a retracement rally of the extended 3 waves down from 1441.
The long-term confirms that we are sitting on an important level and should bounce or pause near here. Following a bounce, if we extend the 3 waves down from the October high, a .618 ratio is 1236 and a 1.00 ratio is 1108. On the other hand, if we extend the a-b-c up from here, 1432 or 1505 are equally possible targets over the intermediate term.
Click to enlarge
Todd Harrison
01:57:19 PM
No positions in stocks mentioned.
One dog's looking this way, the other dog's looking that way...
With contra-hour bearing down on the Monday minx, we've got ourselves a tape caught in headlights. To the left, the all-important financials, which are dangling on the precipice of ten year lows. To the right, we've got stubbornly sticky--dare I say almost "unnaturally sticky"--futures. In between? Market breadth, which was hanging tough but is now somewhat rough.
Some random musings as I count my blessings...
* Google (GOOG) has acted dry all session. I traded this puppy from the short side last week and covered it once it filled the first downside gap. I'm not currently involved but gun to head, my sense is that THE gap between $525 and $450 ultimately fills.
* Regarding the morning Truman Show hit, I'm not sure if I agree that this is a "great opportunity for the long-term" given my view of a multi-year deleveraging process but, as Minyans know, I bought some upside calls in the banks for a trade with an eye to defined risk below BKX 60.
* If and when that triggers, I'll likely trade some other sectors and/or indices from the short side and play the pairs given how oversold the shakin' bacon is. And yes, I know all too well that the sharpest moves through the lens of denial-migration-panic occur from an oversold condition.
* I'll tell ya, they should change the name of Facebook to "Worlds Collide!" I can't tell you how many people I've reconnected with since joining. From grade school in Great Neck to high school in Encino to Syracuse to Mother Morgan to Minyans around the world. This is exactly what an A.D.D. person needs to keep their social network in order!
* You see this rally attempt? It's likely Snappers last shot at upside redemption today. Pay particular attention to it, friends, for the next step would likely be a doozy.
* As always, I hope this finds you well!
R.P.
MV News
01:50:00 PM
No positions in stocks mentioned.
Google Alert!
Google (GOOG) shares are getting a lift.
Bloomberg notes the company is on scheduel to deliver its Android Phones
Kevin Depew
01:48:41 PM
No positions in stocks mentioned.
Under the Hood
* Despite the mixed green on the screen and Boo's seeming inability to push weakened stocks still lower, note that new point and figure sell signals are leading new buy signals by a very wide maring, 42 to 7.
* Overall sell signals are leading 91 to 27.
Adam Warner
01:46:37 PM
No positions in stocks mentioned.
A Word From Our VIX
Just a few thoughts on those rather lame volatility indices we see on our boards.
Post-expiration week tends to see a ton of call writing as everyone seeks to replace everything that expired. Summer does not encourage anyone to buy much "time". Nor does a holiday right smack in the middle of the expiration cycle. All these things suggest a lower VIX. At least in the statistical calculation we see on the board.
Yet VIX futures suggest what you see in the "spot" is essentially correct right now as both July and August trade at a very modest premium to this.
I would expect the cash VIX will hold relatively steady through the Fed meeting on Wednesday, but after that, watch out below. For those curious to see what "real" volatility is doing, important to pay more attention to the VIX forwards/futures from Wednesday through July 4th.
Lance Lewis
01:39:04 PM
No positions in stocks mentioned.
Minyan Mailbag: Conspiracy Theory - Gold Style
Prof. Lewis,
Any thoughts on the theory being advanced by Jim Sinclair and James Puplava that naked shorts are responsible for beating down the junior gold stocks? Seems like the market is willing to give anyone more benefit of the doubt than Minefinders Corporation (MFN) or similar new producers. Thanks in advance.
-Minyan Scott
MS,
Some people like to look for a conspiracy every time market prices don't do what they "believe" they should. However, I don't find that attitude very helpful or conducive to making money.
The juniors are cheap, and they "should" be acting better than they have been given where gold is. I agree with that, as do most gold bulls. But is that because there's a conspiracy of naked shorts that have decided to single out gold stocks in the one space (resources) that happens to be in a bull market equity-wise? That seems about as far-fetched as the theory that a conspiracy of "speculators" are to blame for the rise in oil and other commodity prices. (Again notice how the camp that believes oil's rise is a conspiracy similarly don't think it should be where it is and are forced to blame "conspiracy X" when oil doesn't do what they think it should, namely: "go down")
The gold shares (and the juniors in particular) have underperformed for a variety of reasons since last November. In my humble opinion, the most likely causes for this are (1) the illiquid conditions that existed in the stock market from November until March and (2) the sharp drop in the gold/oil ratio since March, which replaced illiquidity fears with fears of rising costs eating up gold mining margins.
The liquidity problem ended in March when the Fed began basically monetizing (depending on how you look at it) bad debt on the balance sheets of banks and primary dealers. However, the gold/oil ratio then began to collapse in March and provided a second headwind. That ratio "appears" to have bottomed a little over a week ago near the prior 2005 all-time low. If so, the shares (including the juniors) should be free to rally, assuming gold has another leg up to new highs like I expect. And it will have nothing to do with "running in naked shorts in juniors", no matter how emotionally pleasing such an image might be.
-Lance
Jeff Macke
01:33:31 PM
No positions in stocks mentioned.
Gone Fishin'
Hello from New York where it's Thursday in my brain as I make my way towards a trip to Canada for fishing and bonding later this week. I'm not a bobber-watcher, by nature, but I'm big on bonding and Mrs. Jeffmacke is all but kicking me out of the house with a mandate to "Find My Smile." As I so often point out, it's very seldom in my best interest to disagree with the Missus.
Here's what I'm watching when not wondering if it's possible to just have myself dipped in bug repellent in a giant vat:
* What kind of fishing will I not be doing any time soon? Bottom fishing. Picking away at long side trades in names like Citi (C) or JPMorgan (JPM) is tantamount to self-abuse, at this point.
* In other fishing metaphors, check the streaming misery flowing from crude. The stories on General Motors (GM) and the AMRs (AMR) of the world are the headlines but the American Axle's (AXL) and Lear Corp (LEA) of the world are suffering the same pain as their partners, just a little less loudly.
* Today's examples of why I don't buy dips in retail are brought to us by the letter C, as in Circuit City (CC). The not-dead-yet electronics retailer is down 20-odd percent today and the best "reason" being offered is the idea that Blockbuster (BBI) may not want to buy CC for $8 a share. You don't think?
* Duuuuuuuude.
* I simply can't believe what I just paid for a ticket to go to fishing and the fact that Northwest (NWA) isn't making money at these prices. This week may be the last time I travel more than 40 miles from home for the foreseeable future.
* And when I don't go to Vegas ever again I won't be staying at the MGM Mirage (MGM) or buying the casino stocks. Then again, I like my odds on "Red" more than I like my chances of calling a bottom in the laggers on days such as this.
Jeffrey Cooper
01:27:20 PM
Position in BG
Bunge Bungee?
Bunge (BG) has traced out a measured move today (two symmetrical legs down) and has tested the low and appears poised in a position for a snapper.
See the 10 minute chart for today here.
Click to enlarge
MV Trivia
01:15:00 PM
No positions in stocks mentioned.
Island Hoppin'
An archipelago is a chain or cluster of islands. The word archipelago literally means "chief sea" in Greek.
What is the world's largest archipelago state?
Be the first Minyan to answer correctly!
Fil Zucchi
01:07:06 PM
Position in FCSX
Here comes the panic...
* Back in April I loaded up on what were then way out of the money October 25 puts in commodity broker FCStone (FCSX). The idea was that in the next panic to come, I'd be able to roll out of my 30's. Well the panic is now here, and I am offering the 30's in scale. I'm not sure if there is a good reason to panic in FCSX - these are very tough names to track day to day - so the key for me is to remain content with my overall risk exposure.
* What I am not content about is my early departure from the dark-side of BankUnited Financial (BKUNA). If you do an archive search you'll see that this was a name singled out a long time ago for outsized troubles. I bailed with the stock in the 'teens, not wanting to play it for a total wipeout. Bad call. The stock is now at $1.30, and the company is trying to sell $400M worth of stock against its current $100 million market cap. What's worse is that it may not even get done.
* Will "deals not getting done", as suggested a while back by Prof. Sedacca just as the Banking Index (BKX) tickles the 60 level noted by Toddo, mark the bottom?
Lance Lewis
12:57:17 PM
Position in gold, gold stocks.
Gold and Gold Shares
The selling in gold this morning looked like more COMEX shorts betting on dollar strength and this Vietnam story knocking the metal down. It won't work and gold shares may be confirming that by rallying as well.
The story actually is already two weeks old and it’s not a real factor in my opinion. But that doesn’t stop somebody from selling on the news, which just hit today.
Kevin Depew
12:52:46 PM
No positions in stocks mentioned.
Monsanto
And then there are the winners. But, as Maximus said, "The time for honoring yourself will soon be at an end." Note the DeMark TD-Sequential 12 of potential 13 on the chart of Monsanto (MON).
Click to enlarge
Todd Harrison
12:46:53 PM
No positions in stocks mentioned.
More Answers I Really Wanna Know...
* What would be George Carlin's take on death? (RIP sir--you left an indelible mark on our world)
* If overbought conditions are alleviated as a function of time or price AND sideways action is basing above support (and churning under resistance), what is this chart of crude telling us?
* How many folks are banking on an Olympic run in China?
* What does it tell us that the Corn Products (CPO)-Bunge (BG) and Republic Services (RSG)-Allied Waste (AW) Merger Monday news can't offer a spark in the dark?
* Credit contraction takes many forms, eh?
* How in Gawd's name is the LOWER VXO TODAY given the Art Carnage in the financials?
* The emergency rate cut chatter is notably absent today. Is the last bullet in the chamber finally pointed inward?
* What, prey tell, will Turnaround Tuesday bring?
R.P.
Kevin Depew
12:42:17 PM
No positions in stocks mentioned.
GM
To Bennet's point on General Motors (GM), here is an interesting look at the quarterly chart with DeMark TD-Sequential overlaid.
Click to enlarge
Bennet Sedacca
12:35:47 PM
No positions in stocks mentioned.
Dandruff alert
Note the chart below of Goldman Sachs (GS) since it went public.
Click to enlarge
It's a wonderful franchise to be sure, but I always wonder how it dodges every bullet.
The weekly chart has some nasty dandruff which may portend some other things to come.
We'll see.
Jeffrey Cooper
12:30:55 PM
No positions in stocks mentioned.
Watching BG
A trade below the May low on Bunge (BG) of 106.50-ish will leave an outside down month.
The moral of the story: you have to honor your stops because you never know. But that's all the more reason to re-enter if the stock is a sell set up, as was the case in BG when it broke the 50 DMA and a rising trendline this morning.
Michael Paulenoff
12:26:33 PM
No positions in stocks mentioned.
Gold's Upleg Complete
Although the weakness in the SPDR Gold Shares (GLD) has not inflicted much if any meaningful technical damage to the overall pattern off of the 5/1 low of 83.57, today's big gap down certainly argues that the current upleg off of the 6/12 low at 84.83 into Friday's high at 89.61 is complete!
In addition, my expectation of an approaching significant low closer to the timeframe of the bottoming of the 15-18 week cycle low between July 7 and 14 suggests that today's weakness is the start of the road towards such a low, which figures to be VERY important indeed. Let's expect the GLD to press towards a test of the rising 200 DMA in the 85-84 target zone in the upcoming hours/days -- and possibly decline into the 82.90/50 area prior to a powerful upside reversal.
Click to enlarge
Andrew Jeffery
12:17:59 PM
No positions in stocks mentioned.
Anyone for 40s?
Pep 's recent post on Fannie (FNM) and Freddie (FRE) suggests banks aren't the only financial stocks probing recent lows. Consumer credit is risky business these days -- to put it mildly -- and American Express (AXP) and Capital One (COF) are quietly drifting towards lows of the year.
Click to enlarge image
Click to enlarge image
Keep an eye on 40 as an important level for both stocks. 40 also could represent a liquid asset shareholders may be looking to get long if the lows don't hold.
Bennet Sedacca
12:10:23 PM
No positions in stocks mentioned.
More on GM
As I mentioned the other day, the one name that bothers me the most is General Motors (GM).
It has huge amounts of unsold inventory, a business mix that is, well, not what it used to be, and it's about to face a wave of SUV's being sent its way as leases expire.
Judging by the way that GM's debt trades (preferreds now in the 14% range), I don't see how it can finance its way out of this mess.
And considering how many people are employed there, this company is facing the Perfect Storm. And I have no idea how GM can make it through it. Unlike SunTrust (STI), that despite being stubborn about its dividend, at least has the KO stock to sell. What does GM have? Squat.
I really think this is the biggest shoe of all, and the bad part is that I don't here much chatter about it, like I do Lehman Brothers (LEH). That's what bothers me.
Jeffrey Cooper
11:47:19 AM
No positions in stocks mentioned.
Bunge Run
50% of the the recent range in Bunge (BG) is approximately 105 to 108 while the behavior at the 200 dma at approximately 111 will be interesting.
Note how BG is making a beeline toward its 200 dma after breaking its 50 dma convincingly today.
It's at the 200 Now.
Ryan Krueger
11:40:00 AM
No positions in stocks mentioned.
Australia...
This just out...
Mining Giant Rio Tinto (RTP) has been successful in its quest to secure a freight premium for Australian iron ore, locking in the biggest-ever rise in contract prices for Australia’s most valuable commodity export.
Rio settled on an average price rise of 85 per cent for iron ore it sells to China's steel mills, who were led by Baosteel in the negotiations, beating the 71.5 per cent increase secured in 2005.
The freight premium is because Australia is so close to China instead of shipping all the way from Brazil for example, and a reminder of why I favor holding Australian dollars which benefit from this natural resource rich nation with a very desirable address.
Quint Tatro
11:34:07 AM
Positions in GS, ASTI
What I...
What I Like
*
Solar poppage in a terrible tape.
*
Hmmmm, that’s a short list.
What I Don’t Like
*
Financials trading below support.
*
Oil higher… again.
*
2–1 Negative NASDAQ breadth.
*
Goldman (GS) below 50 day.
What I've Done
*
Added a touch more Ascent Solar (ASTI).
What I'm Watching
*
The market to break day lows, while Goldman hangs on… for now.
*
Natural Gas stocks: Delta Petroleum's (DPTR) day high for an add.
Kevin Depew
11:25:56 AM
No positions in stocks mentioned.
Stock Worries
Increasingly hearing from some worried folks about the action in stocks. To follow up on some of the DeMark indicator notes from last Friday, the requirements for a swift cascade lower today were: lower open (basis SP futures) and one tick below that open, which clearly did not occur. That was the most immediate requirement for high probability selloff. Nevertheless, we still show SP not yet having completed DeMark countdown or buy setup requirements. Credit markets are really the key, and equities are taking their cues from that area.
Note the sloppy action in Fannie Mae (FNM) and Freddie Mac (FRE). A move below March lows would certainly spook some folks and on the daily charts neither have showed any signs of exhaustion.
Todd Harrison
11:19:33 AM
No positions in stocks mentioned.
Answers I Really Wanna Know...
* Is the quarter-end purge (financials) and splurge (big beta) too easy?
* Where are we in the denial-migration-panic continuum?
* Should we add the breach of DJIA 12,000--the dislocated shoulder in our dandruff pattern--onto the long list of concerns?
* Has everyone taken the time to wish my brother John Succo a very happy birthday?
* Anyone long a deuce to Coldplay tonight at MSG?
* NYSE internals are still hanging tough?
* Script a recipe for a market melt, see it play out before your eyes... and scale into bank calls into the meat of the heat?
* Heck, even Las Vegas brother business is down 45% and Beverly Hills plastic surgery is off 50%!
* Recipe? Shanghai breaking 3000? Stronger dollar? BKX 60, if and when? Social mood? Rate hike (still 31% odds by September)?
* What am I, mad?
R.P.
Terry Woo
11:10:00 AM
No positions in stocks mentioned.
Hoofy n' Boo
A few updates from this morning's Two Ways to Play:
From the Bull Pen:
* Bulls feel this is a good move for Bunge (BG). Trades below $118 (50 DMA) may act as a near-term sell-stop.
BG is trading -5.46% to $115.60.
* Those bullish on the long-term prospects for Republic Services (RSG) may fade (read: buy) as it approaches the $30 level. Another alternative is Waste Management (WMI); sell-stops near the 50 DMA ($36.80) may be an option.
RSG is trading +0.19% to $31.25.
WMI is trading unch at $38.29.
From the Bear Cave:
* Bears can play the downside in Hormel (HRL); trades above $37 may act as a near-term buy-stop.
HRL is trading +0.20% to $35.60.
* Bears looking for a related downside play might see one in Stericycle (SRCL); Buy-stops can be set above the 200 DMA ($55.65).
SRCL is trading +0.39% to $54.16.
Jeffrey Cooper
11:03:58 AM
No positions in stocks mentioned.
Trading Apple
Apple (AAPL) is testing the high of the low bar day (June 13th).
If that gives it suggests three drives down to the 200 day will play out (i.e. a 1-2-3 swing to a test of the 200 DMA) which should set up a buying opportunity.
Ryan Krueger
10:35:00 AM
No positions in stocks mentioned.
Makes Sense?
In honor of the miniest of my Minyans' first foray into strained pears last night for dinner to celebrate her first five months of trading and drooling, following her dad’s footsteps over that time, I’ll offer this view as I look out over my bib.
Large Cap is now down close to 7% for the month, Small Cap is down less than 3%. Year to date that spread is close to 1000 basis points when it was supposed to be just the opposite for so many reasons. The moves which make the least sense contain the most information.
Among the sectors, two stick out to me as presenting an unusually compelling and cheap pairing.
The two with the lowest implied volatility readings are Health Care (XLV) and Staples (XLP). I might have a very small taste of calls and puts respectively.
Bennet Sedacca
10:30:00 AM
No positions in stocks mentioned.
Why do I feel like I'm in a shoe store?
Every financial on my screen acts like a shoe. Whether brokers, money centers or regionals.
They're just so intertwined that if one actually does have some problems (Lehman (LEH) anyone?), the whole group goes with it.
As we approach quarter end, financials from insurance companies to the dealer community are shedding assets to dress up the balance sheet for quarter end. Like this really accomplishes anything, Seriously isn't it putting lipstick on a pig?
Ryan Krueger
10:24:00 AM
Position in CPO
Talkin' Corn
When I shared my firm's work on Corn Products (CPO) in the past it was usually met with sighs at best, typically silence. I remember once the only thing I could hear was ice clinking in glasses of soda beneath blank stares.
After the buyout announcement today, I’ll guess that CPO and this deal will be forgotten by this time next week on Wall Street, if not sooner. But I’ll share our view that Minyans should remember the clue it offers.
Even with the spotlight it’s been described as “another bet on Ag and corn.” It's not. The company buys corn, it doesn’t sell it. It use it to make cheap sweeteners. Ag is the global staple’s staple. It has been my favorite stock to stand first in line for the US' biggest export of all – capitalism and its allowance of those first few discretionary coins in pockets. Lotta folks around the world are right where the US three decades ago.
My favorite paired trade right now continues to long global staples, short domestic staples (including many of CPO’s customers).
Todd Harrison
10:18:08 AM
position in wb
Gate Sniffage!
* The single biggest positive on my screens? NYSE internals, which are hugging the flat line despite the single biggest negative on my screen which are...
* The financials, which are leading the downside speed. BKX 60 is a kitten's whisker away, Minyans, so keep that level on ye radar as we find our way. I have, so you know, layered in to further upside exposure in the group with an eye towards the wishbone. Should I want or need to hedge that bet, I'll look to S&P puts.
* Wachovia (WB) is my biggest bet... through options... and it has nothing to do with the takeover rumor that I heard this morning for the first time.
* Somebody PLEASE get Allanis Morrisette out of my head.
* Green beans in a red sea? Research in Motion (RIMM), Baidu (BIDU), Wal-Mart (WMT), Sears Holdings (SHLD) and the semis.
* On the heels of Friday's fugly action, we knew we knew were gonna see a downside test for this market pest. The question, quite naturally, is "was that it?" It's easier for me to believe so in the financials given the 3-5% slippage. For the broader tape? It's a toss-up... and will largely depend on the ability of BKX 60 to hold.
* Shake off the Mondays and let's play ball yo!
R.P.
Jay Shartsis
10:12:00 AM
Position in HUN
Huntsman Still Alive
Huntsman (HUN) got smashed for $8 on Thursday last as the proposed buyout at $28 was withdrawn. The issue may, however, not be dead and here’s why.
On Friday afternoon, with the stock at $12.80, ten of its call options appeared in my expensive out of the money study. For example, the Aug. 20 calls “theoretically” valued at $0.30 traded $0.42.
The theme here is that the overvaluation may be induced by “informed” buyers. That idea is strengthened by an event that took place just before the close. With the stock at $12.84, down $0.02, it’s July 15 calls rose from $0.58 to $0.72. Significant. So too their overvaluation of $0.11 to their “theoretical” value of $0.61.
This all brings up the idea that the takeover could still be alive, maybe at a reduced price. $20 would now look pretty good.
Todd Harrison
10:05:11 AM
No positions in stocks mentioned.
Can Stella Get her Groove back?
Last Wednesday, we spoke about the recipe for a market melt and those pieces are seemingly falling in place. Today, we want to look at the other side of that trade. The mood of U.S. investors, according to several polls over the weekend, has never been worse.
It’s easy to see why:
* Levees are busting in the heartland.
* Polar bears are drifting on puddles.
* Energy prices are absurd.
* Home values have fallen into the abyss.
* Wars rage in the Middle East.
* Air Fares, college tuitions and healthcare are unaffordable to those that need it most.
Wanna get away?
*
Easier said than done given the sad state of the dollar.
*
If we’re lucky enough to catch an on-time plane, be wary of landing in the midst of a natural disaster, be it China (70,000) or Myanmar (six figures).
Wanna stay home and watch the tube?
*
Writers strike stop shows mid-season and actors strike threatens the same.
*
Sports? Baseball stars on steroids, basketball referees on the take and euthanized horses at the end of a race.
So, what to do?
Hope for the best but respect the dynamic. Remember, the stock market crash didn’t cause the great depression, the social mood caused the stock market to crash. Keep your chin up, thoughts pure and mind open.
As the purpose of the journey is the journey itself, these are some of the things we’re watching in Minyanville.
*
BKX 60, which is at ten year lows. (S&P vs. BKX).
*
All 30 components of the DJIA were negative on Friday. According to Jeff Saut, this is the type of capitulatory action that precedes a bounce.
*
The latest weekly American Association of Individual Investors Survey came in at the third lowest reading this year (worse readings during the March lows).
*
Merrill's latest portfolio manager survey reveals the highest bearish in the past 10 years (more than '00 and '03) according to the FT.
*
Watch the reaction to the first press lower, which is inevitable after the type of carnage we saw on Friday.
*
S&P 1275, the March lows, is on everyone’s radar. If they can hold, the “successful retest camp” will become emboldened.
Good luck Minyans---let's play like we mean it and trade to win. This is what we've been preparing for. Let's do it!
R.P.
Jeffrey Cooper
09:58:49 AM
No positions in stocks mentioned.
Van Gogh
I hate to use the M word, but you can't be serious.
Bunge (BG) opens up 5 on news that it's buying Corn Products Int. (CPO) and then proceeds to get hit?
What was it doing up in the first place?
A buy 'em to bang 'em? Painting the tape to create bids from the big short position?
A break of the 50 dma here after this morning's monthly turnup should establish today's high as a high going forward for some time. Should.
Bennet Sedacca
09:50:53 AM
No positions in stocks mentioned.
Ho Chi Minh Update
A couple of years back, I highlighted how Vietnam resembled the Naz bubble.
Click to enlarge
It's amazing to me how people around the globe make the same mistakes over and over and over again.
As for oil, I did a quick analysis of how far Earl would have to go to get into bubble top territory based on prior bubbles.
Most bubbles move 400-500% and take 1-3 years. With everyone trying to call a top, I wonder if we can have one. But a 500% move off of the $40 base yields, ummm, $200. Ouch.
MV Respect
09:41:54 AM
No positions in stocks mentioned.
Jeff Saut's Call for This Week
Friday’s Flop (-220 DJIA) produced a pretty rare event in that ALL of the D-J Industrial Average (DJIA) components were negative on the day.
This too is the kind of capitulation action seen around market lows. Unsurprisingly in last week’s carnage, the S&P Financial Index took out its March low. Yet surprisingly, of all the indices my firm follows only the economic sensitive D-J Transports were “up” on the week (+0.9%), which is pretty amazing with crude oil at $135/bbl.
The real winner for the week, however, was sugar, which gained 13.8%! As for my firm, we're pleased with how well our recent investment recommendations (Linn Energy (LINE), Embarq (EQ), Alaska Communications (ALSK)), and of course most of our energy stocks, weathered last week’s storm. And, this morning crude oil is higher again (+$1.55/bbl.) even though Israel didn’t attack Iran over the weekend.
Witht he higher opening, look for attempts to sell stocks back down. If those attempts fail to gain much traction by tomorrow’s closing bell, the odds of a rally improve markedly.
Charles Payne
09:33:50 AM
No positions in stocks mentioned.
Silver Lining in the Financials
Regional banks started last week on the verge of total collapse and finished the week looking like stars.
There were rumors of takeovers with the leading names being SunTrust Bank (STI), which I highlighted on Friday morning and Wachovia (WB) was also mentioned in the rumor mill as a potential candidate for JP Morgan (JPM). Moreover, just the ability to say things were okay propelled these stocks much higher, albeit they're still orbits away from there old highs.
So we head into the new week with a smidgen of fresh hope that perhaps the worst case is already reflected in the share price of financial stocks. Oops, I don’t think I was supposed to use the “H’ word as it was bashed pretty good last week. Sure, it’s a human emotion and at times happens beyond our subconscious, but I would say at the end of last week even our subconscious took a hit.
MV News
09:21:55 AM
No positions in stocks mentioned.
Morning News
* U.K. home prices fell the most this year according to Rightmove Plc. The average asking price fell 1.2% from May. For the year, home prices rose 0.1%. (Bloomberg)
* Bank of America cut 2Q broker profits by an average estimate of 22%. (Bloomberg)
* MBIA (MBI) credit rating downgrade last week by Moody’s is likely to trigger $7.4 bln of payments and collateral postings, but the company said Friday it had about $15.2 bln of assets to meet the requirements. (Bloomberg)
* Citigroup (C) may begin another round of job cuts this week as part of its plan to cut it’s trading and investment-banking division by 10%. (Bloomberg)
Todd Harrison
09:13:34 AM
positions in wb, c, jpm
Morning Dew
* As our ultimate destination pales in comparison to the path that we take to get there, I used the cascading prices into BKX 60—which are ten year lows and the last level of near-term support—to buy some upside calls in the banks late Friday. Names include Wachovia Bank (WB), JP Morgan (JPM) and Citigroup (C).
* This, of course, is a pure trade. In a perfect world—and if I sense that the wheels will wobble on the wagon anew, I’ll short some S&P against them with an eye on the eye-popping wishbone we’ve been discussing. As Minyans know, one of two things must happen—either the banks must bounce or the S&P is gonna do the Wiley Coyote-Cliff thang.
* Peering around the corner, the next “best bet” for the bovine is a successful retest of the March lows. If (big, monster IF) S&P 1275 holds, the technical types would be emboldened for a trade. And yes, I offer this as “higher futures following a market melt” typically get tested to the downside.
* China Check? Down 2.5%, to Shanghai 2760. Remember, 3000 is, er, was the level of lore.
* Ya think it’s Hank Moody out there? The latest weekly AAII (American Association of Individual Investors) Survey reading came in at a -22% (% bulls less % bears),which is the third lowest reading this year (worse readings during the March lows). Merrill's latest portfolio manager survey reveals the highest bearish in the past 10 years (more than '00 and '03) according to the FT.
R.P.
MV News
09:12:44 AM
No positions in stocks mentioned.
Earnings Review!
Walgreen (WAG): $0.58 EPS vs. $0.59 cons on revs $15.02 bln vs. $15.11 bln cons.
Kevin Depew
08:33:16 AM
No positions in stocks mentioned.
Where We Stand
Below is where we stand with the point and figure bullish percent indicators for equities, based on Investors Intelligence data.
* NYSE Bullish Percent: Os (Negative) 41.3%
* S&P 500 Bullish Percent: Os (Negative) 37.9%
* Nasdaq Composite Bullish Percent: Xs (Positive) 34.4% (reverses down at 30%)
* Nasdaq-100 Bullish Percent: Os (Negative) 43%
* Russell 2000 Bullish Percent: Xs (Positive) 43.8% (reverses down at 42%)
* NYSE High-Low Index: Os (Negative) 27.6%
* Nasdaq High-Low: Os (Negative) 18.1%
Jon Doctor J Najarian
08:19:38 AM
Positions in X, APOL
Oil Continues Higher
Google's (GOOG) gPhone Hits Delays - The Wall Street Journal says Google's mobile phone will struggle to meet its 2008 scheduled launch. Google had said in November that the phones would come out by the second half of '08, but the WSJ says Sprint Nextel (S) will not be able to meet that goal. Similarly, the world's largest wireless carrier, China Mobile (CHL), will likely will have its launch delayed until late this year or early '09!
MF Global (MF) Dropped To Market Perform - Broker Keefe Bruyette cuts MF from Outperform saying it fears dilution from the converts that will provide much-needed capital for the battered broker.
More Conviction Buy List Adds and Subs - Goldman has been quite active this morning, adding US Steel (X) and Irish Pharmaceutical player Elan (ELN) to its vaunted Conviction Buy List, but removing XL Capital (XL) and Nucor (NUE) from the list.
Apollo Group (APOL) Gets Another Upgrade - The former Think Equity, now ThinkPanmure, takes Apollo Group to Buy from Accumulate citing the sharp sell-off following the weak 2Q earnings. It raised its outlook from $59 to $64 for APOL. You may recall that Credit Suisse just raised their outlook Friday as well and I still believe it is because of its online educational offerings, not the bricks and mortar.
Adam Michael
07:50:00 AM
No positions in stocks mentioned.
Bullish COT Report
Commercials went long crude oil futures for the first time since February of 2007. Open interest is also way down. My %R’s I run are throwing a maximum buy signal for crude oil. Given the fact that two times the float of the USO (crude oil ETF) is sold short, and commercials have gone net long crude oil, I’d say there is a very good chance we rip higher and soon. If we do, I expect the market to fall apart (literally)…$150 crude oil seems very doable in the short-term. I can’t underscore how bullish this COT report is for crude oil.
Gold is also throwing a buy signal on my analysis of the COT reports (for the second week in a row). I like the fact that gold had a steady advance this week but specs did not increase their long position… and open interest in gold futures is at its lowest level since last September (when gold began it monster advance). Very bullish.
I also want to remind readers of the head and shoulders pattern in the S&P 500 and Russell 2000 that seems to be getting little attention. A breakdown here measures to 1225 in the S&P 500. I'm thinking $150 oil would provide just the catalyst. Be careful out there!
Hoofy and Boo
07:40:06 AM
No positions in stocks mentioned.
Monday Radar
Earnings
Before: WAG
Events
UBS Taiwan Conference
Adam Smith Conferences Russian Retail Banking Forum
OECD Employment and Industrial Relations Conference
Ethical Company Sustainable Finance Summit
Financial Research Associates Valuation of Hard-To-Value Securities & Portfolios...
Click here for the full trading radar.
MV News
07:18:38 AM
No positions in stocks mentioned.
Good Morning Minyans
Traders shake off the Mondays as they find foreign markets all mixed up.
Asian trading closed in the red with the Hang Seng -0.13%, Nikkei -0.61%, Sensex -1.91%, Taiwan -0.33% and Shanghai -2.52%.
Europe is skewed to the upside with the CAC +0.24%, DAX +0.51%, FTSE +0.71%, ATX +0.18%, Swiss Mkt. -0.09% and Stockholm -1.27%.
In commodities, crude oil is higher +0.98 to 136.34 and gold is also up +2.1 to 903.4 this morning.
Good luck today!
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