Stocks rallied in the afternoon trade to go narrowly positive for the week and only slightly down for the day after opening lower. The Nasdaq was the only index to finish in the green today, closing 0.4% higher to finish off a strong week. Wednesday's breakout and Thursday's up open in the S&P looked set to spark a bigger rally than the methodical rise we've seen so far in 2012, but yesterday's intraday sell-off put the index back into the upper level consolidation.
Today's action in the indices was quiet overall, but we did see some good action in individual stocks. If this is the kind of stock specific action we get on consolidation days, then it could be a great year for active traders! High beta tech was strong all day, and when the market bounced they had a nice push.
The SPDR S&P 500 ETF (SPY) danced around yesterday's low of $131.37 and the bears never had enough power to get a 30-60 minute close below that level. Even when we were on near our lows stocks didn't want to go down.
The banks were hanging tough all day and we still had multiple set ups to "hawk". Goldman Sachs (GS) finally pushed through $110 and is on its way to $115. Other banks did okay as well but were not in focus.
Google (GOOG) finally had a nice bounce, rewarding those who bought yesterday near the 200-day. If you missed it yesterday, it was buyable on relative strength today.
Apple (AAPL) also perked up a bit as a long vs. $444.
Baidu (BIDU) and Sina (SINA) were very impressive, as it appears there was some sort of catalyst late in the day for the Chinese internet stocks.
For Netflix (NFLX), midday we talked about two pivot points: 1) $118.50 and then 2) yesterday's high of $119.37. It closed at $123.83.
I did buy back Las Vegas Sands (LVS). The stock looks great after a break yesterday. Wynn Resorts (WYNN) is still a little lethargic but looks okay.
Gold (GLD) is on day three of the move that ignited Wednesday through $163.50-164.50. It's now approaching resistance of $169-171.
Lululemon (LULU) continues to impress, making new highs.
It's been a long week. It feels like the market is trying to climb higher, but just can't get the juice it needs to blast off. As mentioned, however, we are getting great moves in a few individual names.
While my focus was long most of the week, we did get some great shorts in Broadvision (BVSD) - $35 to $20 - and Sears (SHLD) - $53 to $45.
Everyone have a great weekend and enjoy your families!
Minyanville’s T3 Weekly Recap: Markets Rest, but Stock Specific Action Keeps Traders Busy
January 27th, 2012Book Excerpt: Gurus Are Right Until They’re Wrong
January 27th, 2012
The release of earnings reports in recent weeks has financial analysts and gurus pitching their ideas about which stocks investors should buy or sell. Goldman Sachs, for example, encouraged its clients to load up on shares of Apple (AAPL) despite the stock's price spike following a strong report, and many financial news outlets (including this one) continually post stock picks from "celebrity" investors and traders. But how would Carl Richards, author of The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money, say you should respond to advice from financial celebrities?
"Ignore them."
In his new book, Richards, also a blogger for the New York Times and Morningstar Advisor, explains why most financial "gurus" on TV can't offer you any meaningful advice because they lack knowledge of your personal situation and cannot forecast the future of the markets. Richards teaches his readers how to think on their own about investing -- ignore the herd, make realistic plans for your own financial future and hire an objective financial advisor, he says. And to drive home his point, he includes quick line-drawings breaking down investing concepts and illustrating flaws in the way most people think about money and saving. (See an example below.)
Richards is a certified financial planner and founder of Prasada Capital Management. He works closely with like-minded individuals and families to help them not lose their money and enjoy their lives. Richards himself gained valuable insights about the consequences of listening to the "experts" when he bet too big on a new home -- almost losing his business and putting enormous stress on his family -- during the financial crash of 2008. You can view Richards's website at www.behaviorgap.com, and you can email him at carl@behaviorgap.com or follow him on Twitter @behaviorgap.
The following is an excerpt from his book, which was published earlier this month.
Gurus Are Right Until They're Wrong
In July 2010, well-known market forecaster Robert Prechter (who champions something called the Elliott Wave Principle) made this prediction: "The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end."
Early in 2011, Yale's Robert Shiller predicted that the Standard & Poor's 500-stock index would rise from 1,280 (its level on January 10, 2011) to 1,430 over the next decade, a 1.3 percent increase per year.
In January 2011, veteran market watcher Laszlo Birinyi forecast that the S&P would hit 2,854 by (mark the date) the end of the day on September 4, 2013.
So there you have it. Three market gurus with three divergent forecasts, all pretty extreme. All three forecasts showed up in reputable, mainstream news outlets.
What's an investor to think or do?
Ignore them.
It can be fun to chat with friends or colleagues about your opinion of the stock market. Sometimes it can feel like the duty of any self-respecting American to have an opinion about the market and the economy.
But no one can tell you where the stock market (or any market) is going.
And even if someone did possess that ability, how could you (or I) distinguish that person from the clowns who get lucky once in a while? Would you listen to Prechter, Shiller, Birinyi . . . or someone else?
So Why Do We Listen?
We get interested in predictions because we're human. A number of factors conspire to make us easy marks for forecasters.
For one thing, our survival instinct means that we're constantly trying to predict what danger may be lurking in the bushes. And since we're social animals, we love being in the know. We love being the one to break the news on Facebook or Twitter. On a primal level, we want to be the (highly valued) person who warns others of danger or offers them useful information.
Meanwhile, it's scary to accept that much of what goes on is random and that the only constant seems to be change. We rely on predicting and forecasting for almost every decision we make, including the weather, our commute time, and even what to wear. It makes us anxious to admit that most predictions (our own and those of others) are flawed, at best. And so we are grateful when people-especially famous, respected people quoted in mainstream publications-offer to tell us what will happen in the future.
Okay. So it may feel kind of scary to give up the idea that you can rely on strangers to tell you what to do with your money or what's going to happen next in the financial markets. In fact, however, giving up those notions is the first step toward a certain kind of freedom.
Our continued willingness to listen to advice and predictions, despite experience and research that suggest they can't help us, is an example of why it's so difficult to behave correctly when it comes to our relationship with investments. We want someone to tell us what to do. But in the end, we have to recognize that the future is unpredictable. Advice and forecasts are often distractions from our real task: getting to know ourselves and our goals, making choices aligned with those goals, and adapting to the surprises that are bound to come along.
We have evolved to scan the horizon for data, and make quick snap judgments. Andrew Lo, a finance professor at MIT, notes that if you were to go into your closet each day and try to come up with the perfect combination of clothes, you would have to choose from thousands of possible combinations.
The same is true for investments. There are millions of ways to design your financial life. So it's nice to imagine that someone will tell us what to do-or give us information that will make our choices very simple (stocks are going up; buy stocks).
So what do we do when we realize that advice is generic and predictions are unreliable? Isn't that a big problem? Not really. We don't have to pick the perfect investments, or the perfect portfolio.
After all, we don't need or want someone to pick our clothes for us each morning based on predictions about what our day will be like or who we'll encounter and what they'll think of our pink shirt. Instead, we rely on our experience and our judgment and our own taste in clothing.
We also rely on our flexibility-if we get it wrong, we'll adapt. If it's hotter than we expected, we'll take off our jacket. If we're underdressed, we'll apologize. No big deal. And meanwhile, if we need someone else's perspective, we can always ask: How do I look?
Likewise, we can design our portfolios to suit our best current understanding of how financial markets tend to work, and what we want to achieve over the coming years. When things change, we can adapt.
And if we need perspective, we can turn to trustworthy people who know us-not some stranger with a show on cable.
--Excerpted from The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money. Published by Portfolio/Penguin. Copyright Carl Richards, 2012.
"Ignore them."
In his new book, Richards, also a blogger for the New York Times and Morningstar Advisor, explains why most financial "gurus" on TV can't offer you any meaningful advice because they lack knowledge of your personal situation and cannot forecast the future of the markets. Richards teaches his readers how to think on their own about investing -- ignore the herd, make realistic plans for your own financial future and hire an objective financial advisor, he says. And to drive home his point, he includes quick line-drawings breaking down investing concepts and illustrating flaws in the way most people think about money and saving. (See an example below.)
Richards is a certified financial planner and founder of Prasada Capital Management. He works closely with like-minded individuals and families to help them not lose their money and enjoy their lives. Richards himself gained valuable insights about the consequences of listening to the "experts" when he bet too big on a new home -- almost losing his business and putting enormous stress on his family -- during the financial crash of 2008. You can view Richards's website at www.behaviorgap.com, and you can email him at carl@behaviorgap.com or follow him on Twitter @behaviorgap.
The following is an excerpt from his book, which was published earlier this month.
Gurus Are Right Until They're Wrong
In July 2010, well-known market forecaster Robert Prechter (who champions something called the Elliott Wave Principle) made this prediction: "The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end."
Early in 2011, Yale's Robert Shiller predicted that the Standard & Poor's 500-stock index would rise from 1,280 (its level on January 10, 2011) to 1,430 over the next decade, a 1.3 percent increase per year.
In January 2011, veteran market watcher Laszlo Birinyi forecast that the S&P would hit 2,854 by (mark the date) the end of the day on September 4, 2013.
So there you have it. Three market gurus with three divergent forecasts, all pretty extreme. All three forecasts showed up in reputable, mainstream news outlets.
What's an investor to think or do?
Ignore them.
It can be fun to chat with friends or colleagues about your opinion of the stock market. Sometimes it can feel like the duty of any self-respecting American to have an opinion about the market and the economy.
But no one can tell you where the stock market (or any market) is going.
And even if someone did possess that ability, how could you (or I) distinguish that person from the clowns who get lucky once in a while? Would you listen to Prechter, Shiller, Birinyi . . . or someone else?
So Why Do We Listen?
We get interested in predictions because we're human. A number of factors conspire to make us easy marks for forecasters.
For one thing, our survival instinct means that we're constantly trying to predict what danger may be lurking in the bushes. And since we're social animals, we love being in the know. We love being the one to break the news on Facebook or Twitter. On a primal level, we want to be the (highly valued) person who warns others of danger or offers them useful information.
Meanwhile, it's scary to accept that much of what goes on is random and that the only constant seems to be change. We rely on predicting and forecasting for almost every decision we make, including the weather, our commute time, and even what to wear. It makes us anxious to admit that most predictions (our own and those of others) are flawed, at best. And so we are grateful when people-especially famous, respected people quoted in mainstream publications-offer to tell us what will happen in the future.
Okay. So it may feel kind of scary to give up the idea that you can rely on strangers to tell you what to do with your money or what's going to happen next in the financial markets. In fact, however, giving up those notions is the first step toward a certain kind of freedom.
Our continued willingness to listen to advice and predictions, despite experience and research that suggest they can't help us, is an example of why it's so difficult to behave correctly when it comes to our relationship with investments. We want someone to tell us what to do. But in the end, we have to recognize that the future is unpredictable. Advice and forecasts are often distractions from our real task: getting to know ourselves and our goals, making choices aligned with those goals, and adapting to the surprises that are bound to come along.
We have evolved to scan the horizon for data, and make quick snap judgments. Andrew Lo, a finance professor at MIT, notes that if you were to go into your closet each day and try to come up with the perfect combination of clothes, you would have to choose from thousands of possible combinations.
The same is true for investments. There are millions of ways to design your financial life. So it's nice to imagine that someone will tell us what to do-or give us information that will make our choices very simple (stocks are going up; buy stocks).
So what do we do when we realize that advice is generic and predictions are unreliable? Isn't that a big problem? Not really. We don't have to pick the perfect investments, or the perfect portfolio.
After all, we don't need or want someone to pick our clothes for us each morning based on predictions about what our day will be like or who we'll encounter and what they'll think of our pink shirt. Instead, we rely on our experience and our judgment and our own taste in clothing.
We also rely on our flexibility-if we get it wrong, we'll adapt. If it's hotter than we expected, we'll take off our jacket. If we're underdressed, we'll apologize. No big deal. And meanwhile, if we need someone else's perspective, we can always ask: How do I look?
Likewise, we can design our portfolios to suit our best current understanding of how financial markets tend to work, and what we want to achieve over the coming years. When things change, we can adapt.
And if we need perspective, we can turn to trustworthy people who know us-not some stranger with a show on cable.
--Excerpted from The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money. Published by Portfolio/Penguin. Copyright Carl Richards, 2012.
Trading Radar: Can the Rally Stay on Track?
January 27th, 2012
Equity markets have rallied this year, and the major question plaguing the markets next week is whether or not they can continue the pace. News is expected out of Europe, with Greece on the verge of a deal with private creditors to reduce its public debt holdings by half. Conflicting reports have indicated that a deal may be reached this weekend.
Globally, China reports its manufacturing data amidst debate as to whether or not the country is in for a hard or soft landing. Recent easing actions by the Chinese Central Bank have muted the growth slowdown in the Chinese economy. In Europe, it will be important to keep an eye on the unemployment and manufacturing numbers as austerity measures begin to kick in.
In the US, jobs data comes out later in the week, along with consumer confidence numbers as well. This will help determine whether or not the US is beginning its move out of a recession and whether the market can continue to churn higher.
Important earnings reports include Exxon-Mobil (XOM), Amazon (AMZN), UPS (UPS), Dow Chemicals (DOW), and US Steel (X).
Monday, January 30
US Economics
08:30 Personal Income – consensus 0.4%
08:30 Personal Spending – consensus 0.1%
08:30 PCE Deflator – consensus 2.3%
08:30 PCE Core – consensus 1.7%
10:30 Dallas Fed Manufacturing – consensus 0
11:00 Fed to purchase $4.25b-$5b in 9 to 10-year notes
11:30 US to sell $31b in 3-month, $29b 6-month bills
Global Economics
10:00 EUR Euro-Zone Consumer Confidence
23:30 JPY Household Spending
23:30 JPY Jobless Rate
23:50 JPY Industrial Production
5:00 Italy to sell up to EU4b 4.75% 2017, up to EU2b 5% 2022, and 3.75% 2016, 3.75% 2021 bonds
9:00 France to sell up to EU4b 84-day bills
Earnings
Before: WWW, GCI, PHG, HAE, ONB
After: BIRT, AEIS, ALGN, ARRY, BIDU, GGG, HTLF, BOLX, ICUI, IDTI, KRC, MCK, MSTR, MSPD, OLN, OFG, PRXL, RGA, RCII, RTEC, SLG, SFG, TGI
Tuesday, January 31
US Economics
08:30 Employment Cost Index – consensus 0.4%
09:00 S&P/CaseShiller Home Price Index
09:00 S&P/CS 20 City SA – consensus -0.45%
09:00 S&P/CS Composite 20 – consensus -3.22%
09:45 Chicago Fed PMI – consensus 63
10:00 Consumer Confidence – consensus 68
10:00 NAPM-Milwaukee – consensus 57.3
11:00 Fed to purchase $2.25b-$2.75b in 25 to 30-year notes
11:30 U.S. to sell 4-week bills
Global Economics
EUR German CPI
EUR German Retail Sales
00:30 AUD NAB Business Confidence
05:00 JPY Housing Starts
07:00 CHF UBS Consumption Indicator
08:55 German Unemployment Change
09:30 GBP Net Consumer Credit
10:00 EUR Euro-Zone Unemployment Change
13:30 CAD GDP
Earnings
Before: AMG, AXE, ADM, ARMH, AVY, BIIB, CE, CEVA, CIT, CNH, DHR, LLY, ETR, XOM, GKSR, GNTX, HRS, HHS, HW, HP, ITW, NRGY, KLIC, LLL, LXK, MPC, HZO, MAT, MHP, MTH, OSK, PCAR, PNR, PFE, PCH, PROV, RTIX, SAIA, STL, TECH, TLAB, TNB, TYC, X, UPS, VLO, WDR
After: ACE, ACXM, AFL, AFOP, AMZN, AMCC, AJG, AZPN, BBOX, BXP, EPAY, BRCM, CHRW, BCR, CYT, DLB, FTNT, HLIT, HA, ILMN, IVAC, IXYS, JKHY, JDAS, JLL, KEYN, MANH, MTW, MPW, MWA, MYGN, NATI, PSEM, PLT, QGEN, RSYS, STX, SLGN, STYL, SU, TCRD, UBNT, UIS, VRTU, WRB, WBSN, WPRT
Wednesday, February 1
US Economics
07:00 MBA Mortgage Purchase Index
08:15 ADP Employment Change – consensus 185K
10:00 Construction Spending – consensus 0.5%
10:00 ISM Manufacturing – consensus 54.5
10:00 ISM Prices Paid – consensus 49.8
5:00 Domestic Vehicle Sales – consensus 10.50M
5:00 Total Vehicle Sales – consensus 13.55M
Global Economics
01:00 CNY PMI Manufacturing
08:15 CHF Retail Sales
08:55 EUR German PMI
10:00 EUR Euro-Zone CPI Estimate
5:15 Germany to sell add'l EU5b 10-yr notes
Earnings
Before: AET, AGYS, AMSC, ASCA, AOL, ARW, ATMI, AUDC, ALV, BEAV, GIB, CVLT, COCO, DWSN, DSPG, ENR, ENTG, EPD, BEN, HBI, HSY, IACI, ITG, LQDT, MAN, MKTX, MDCI, NDAQ, NI, NOC, OIIM, PMT, RDWR, ST, TMO, TUP, VHS, WHR
After: NDN, ABCO, AFFX, ALGT, ALL, DOX, AFG, AMP, AMLN, AIZ, ATW, AVB, AVNW, BYI, BMC, CELL, CBT, CACI, CDNS, CMO, CRME, CENT, CMG, COHU, CNQR, CLB, CMRE, CVTI, CCK, EDMC, EA, EXXI, ENTR, EQR, ESS, EXAR, FBHS, GMCR, GTAT, HAIN, HI, INSP, IPHI, ININ, ISIL, JDSU, KMPR, LVS, MKL, MTSN, MDU, MEAS, MERU, MKSI, NETL, NQ, NEU, OTEX, OPWV, QCOM, QNST, RLD, REG, SGMO, SWM, SHOR, SFLY, SLH, SRDX, SYA, TSO, TLLP, TTEK, TSCO, VASC, VMC, WGL
Thursday, February 2
US Economics
07:30 Challenger Job Cuts
08:00 RBC Consumer Outlook Index
08:30 Nonfarm Productivity – consensus 0.8%
08:30 Unit Labor Costs – 1.0%
08:30 Initial Jobless Claims – consensus 370K
08:30 Continuing Claims – consensus 3535K
3:00 Fed Chairman Bernanke testifies before House Budget Committee
Global Economics
07:00 CHF Trade Balance
10:00 EUR Euro-Zone PPI
5:00 France to sell 4.25% 2018 bonds
Earnings
Before: ACM, AGN, ADS, ATK, AZN, BZH, BHE, BX, BSX, BCO, CAM, CSL, CI, CME, CUB, CMI, DB, DO, DHX, DOW, EXP, RDEN, EVR, GR, IP, IVC, K, KELYA, KEM, KNSY, LSTR, LEA, LII, MHO, MA, MMS, MDC, MD, MRK, MTOR, MSCI, MWIV, NOV, NCI, NYT, NUS, ODFL, ONNN, PTEN, PENN, PHM, ROLL, RSTI, ROP, RCL, RGLD, R, SBH, SLE, SNA, SNE, HOT, SPH, SX,C, TE TEN, TDW, TRCR, USG, VIAB, WBC, WEC, XEL
After: APKT, AATI, ALKS, NLY, BEBE, BKXH, WIFI, BRS, CLMS, CPT, CATM, CFN, CAVM, CBG, CHEF, COGO, COLM, CNW, CTCT, CYMI, DRIV, EW, EXAM, EXTR, FISV, GCAP, GNW, GILD, HAYN, INFN, IN, IRF, XXIA, KEX, MXL, MCHP, MAA, MTX, MTSC, MFLX, NFG, N, NSR, EGOV, NOA, NVLS, OPLK, PACB, PCCC, PKI, POWI, PWER, PFG, RDK, SIGI, SIMG, SIMO, SSD, SMT, SRCL, SUN, TTWO, TSYS, THQI, TRMB, UTI, VRTX, ZOLT
Friday, February 3
US Economics
08:30 Change in Nonfarm Payrolls – consensus 150K
08:30 Change in Private Payrolls – consensus 170K
08:30 Change in Manufacturing Payrolls – consensus 13K
08:30 Unemployment Rate – consensus 8.5%
08:30 Average Hourly Earnings – consensus 1.9%
08:30 Average Weekly Hours – consensus 34.4
10:00 ISM Non-Manufacturing Composite – consensus 53.1
10:00 Factory Orders – consensus 1.5%
Global Economics
CNY Industrial Profits YTD
01:00 CNY Non-manufacturing PMI
07:00 CHF UBS Real Estate Bubble Index
08:55 EUR German PMI
09:30 GBP PMI
10:00 EUR Euro-Zone Retail Sales
12:00 CAD Unemployment Rate
Earnings
Before: ABMD, AXL, AON, BEAM, BAH, CLX, CEG, UFS, EL, HNT, IMN, KNL, MAC, MOD, MGI, SPG, SIRO, SEP, SPB, TSN, WY, YRCW
Twitter: @MichaelSedacca
Globally, China reports its manufacturing data amidst debate as to whether or not the country is in for a hard or soft landing. Recent easing actions by the Chinese Central Bank have muted the growth slowdown in the Chinese economy. In Europe, it will be important to keep an eye on the unemployment and manufacturing numbers as austerity measures begin to kick in.
In the US, jobs data comes out later in the week, along with consumer confidence numbers as well. This will help determine whether or not the US is beginning its move out of a recession and whether the market can continue to churn higher.
Important earnings reports include Exxon-Mobil (XOM), Amazon (AMZN), UPS (UPS), Dow Chemicals (DOW), and US Steel (X).
Monday, January 30
US Economics
08:30 Personal Income – consensus 0.4%
08:30 Personal Spending – consensus 0.1%
08:30 PCE Deflator – consensus 2.3%
08:30 PCE Core – consensus 1.7%
10:30 Dallas Fed Manufacturing – consensus 0
11:00 Fed to purchase $4.25b-$5b in 9 to 10-year notes
11:30 US to sell $31b in 3-month, $29b 6-month bills
Global Economics
10:00 EUR Euro-Zone Consumer Confidence
23:30 JPY Household Spending
23:30 JPY Jobless Rate
23:50 JPY Industrial Production
5:00 Italy to sell up to EU4b 4.75% 2017, up to EU2b 5% 2022, and 3.75% 2016, 3.75% 2021 bonds
9:00 France to sell up to EU4b 84-day bills
Earnings
Before: WWW, GCI, PHG, HAE, ONB
After: BIRT, AEIS, ALGN, ARRY, BIDU, GGG, HTLF, BOLX, ICUI, IDTI, KRC, MCK, MSTR, MSPD, OLN, OFG, PRXL, RGA, RCII, RTEC, SLG, SFG, TGI
Tuesday, January 31
US Economics
08:30 Employment Cost Index – consensus 0.4%
09:00 S&P/CaseShiller Home Price Index
09:00 S&P/CS 20 City SA – consensus -0.45%
09:00 S&P/CS Composite 20 – consensus -3.22%
09:45 Chicago Fed PMI – consensus 63
10:00 Consumer Confidence – consensus 68
10:00 NAPM-Milwaukee – consensus 57.3
11:00 Fed to purchase $2.25b-$2.75b in 25 to 30-year notes
11:30 U.S. to sell 4-week bills
Global Economics
EUR German CPI
EUR German Retail Sales
00:30 AUD NAB Business Confidence
05:00 JPY Housing Starts
07:00 CHF UBS Consumption Indicator
08:55 German Unemployment Change
09:30 GBP Net Consumer Credit
10:00 EUR Euro-Zone Unemployment Change
13:30 CAD GDP
Earnings
Before: AMG, AXE, ADM, ARMH, AVY, BIIB, CE, CEVA, CIT, CNH, DHR, LLY, ETR, XOM, GKSR, GNTX, HRS, HHS, HW, HP, ITW, NRGY, KLIC, LLL, LXK, MPC, HZO, MAT, MHP, MTH, OSK, PCAR, PNR, PFE, PCH, PROV, RTIX, SAIA, STL, TECH, TLAB, TNB, TYC, X, UPS, VLO, WDR
After: ACE, ACXM, AFL, AFOP, AMZN, AMCC, AJG, AZPN, BBOX, BXP, EPAY, BRCM, CHRW, BCR, CYT, DLB, FTNT, HLIT, HA, ILMN, IVAC, IXYS, JKHY, JDAS, JLL, KEYN, MANH, MTW, MPW, MWA, MYGN, NATI, PSEM, PLT, QGEN, RSYS, STX, SLGN, STYL, SU, TCRD, UBNT, UIS, VRTU, WRB, WBSN, WPRT
Wednesday, February 1
US Economics
07:00 MBA Mortgage Purchase Index
08:15 ADP Employment Change – consensus 185K
10:00 Construction Spending – consensus 0.5%
10:00 ISM Manufacturing – consensus 54.5
10:00 ISM Prices Paid – consensus 49.8
5:00 Domestic Vehicle Sales – consensus 10.50M
5:00 Total Vehicle Sales – consensus 13.55M
Global Economics
01:00 CNY PMI Manufacturing
08:15 CHF Retail Sales
08:55 EUR German PMI
10:00 EUR Euro-Zone CPI Estimate
5:15 Germany to sell add'l EU5b 10-yr notes
Earnings
Before: AET, AGYS, AMSC, ASCA, AOL, ARW, ATMI, AUDC, ALV, BEAV, GIB, CVLT, COCO, DWSN, DSPG, ENR, ENTG, EPD, BEN, HBI, HSY, IACI, ITG, LQDT, MAN, MKTX, MDCI, NDAQ, NI, NOC, OIIM, PMT, RDWR, ST, TMO, TUP, VHS, WHR
After: NDN, ABCO, AFFX, ALGT, ALL, DOX, AFG, AMP, AMLN, AIZ, ATW, AVB, AVNW, BYI, BMC, CELL, CBT, CACI, CDNS, CMO, CRME, CENT, CMG, COHU, CNQR, CLB, CMRE, CVTI, CCK, EDMC, EA, EXXI, ENTR, EQR, ESS, EXAR, FBHS, GMCR, GTAT, HAIN, HI, INSP, IPHI, ININ, ISIL, JDSU, KMPR, LVS, MKL, MTSN, MDU, MEAS, MERU, MKSI, NETL, NQ, NEU, OTEX, OPWV, QCOM, QNST, RLD, REG, SGMO, SWM, SHOR, SFLY, SLH, SRDX, SYA, TSO, TLLP, TTEK, TSCO, VASC, VMC, WGL
Thursday, February 2
US Economics
07:30 Challenger Job Cuts
08:00 RBC Consumer Outlook Index
08:30 Nonfarm Productivity – consensus 0.8%
08:30 Unit Labor Costs – 1.0%
08:30 Initial Jobless Claims – consensus 370K
08:30 Continuing Claims – consensus 3535K
3:00 Fed Chairman Bernanke testifies before House Budget Committee
Global Economics
07:00 CHF Trade Balance
10:00 EUR Euro-Zone PPI
5:00 France to sell 4.25% 2018 bonds
Earnings
Before: ACM, AGN, ADS, ATK, AZN, BZH, BHE, BX, BSX, BCO, CAM, CSL, CI, CME, CUB, CMI, DB, DO, DHX, DOW, EXP, RDEN, EVR, GR, IP, IVC, K, KELYA, KEM, KNSY, LSTR, LEA, LII, MHO, MA, MMS, MDC, MD, MRK, MTOR, MSCI, MWIV, NOV, NCI, NYT, NUS, ODFL, ONNN, PTEN, PENN, PHM, ROLL, RSTI, ROP, RCL, RGLD, R, SBH, SLE, SNA, SNE, HOT, SPH, SX,C, TE TEN, TDW, TRCR, USG, VIAB, WBC, WEC, XEL
After: APKT, AATI, ALKS, NLY, BEBE, BKXH, WIFI, BRS, CLMS, CPT, CATM, CFN, CAVM, CBG, CHEF, COGO, COLM, CNW, CTCT, CYMI, DRIV, EW, EXAM, EXTR, FISV, GCAP, GNW, GILD, HAYN, INFN, IN, IRF, XXIA, KEX, MXL, MCHP, MAA, MTX, MTSC, MFLX, NFG, N, NSR, EGOV, NOA, NVLS, OPLK, PACB, PCCC, PKI, POWI, PWER, PFG, RDK, SIGI, SIMG, SIMO, SSD, SMT, SRCL, SUN, TTWO, TSYS, THQI, TRMB, UTI, VRTX, ZOLT
Friday, February 3
US Economics
08:30 Change in Nonfarm Payrolls – consensus 150K
08:30 Change in Private Payrolls – consensus 170K
08:30 Change in Manufacturing Payrolls – consensus 13K
08:30 Unemployment Rate – consensus 8.5%
08:30 Average Hourly Earnings – consensus 1.9%
08:30 Average Weekly Hours – consensus 34.4
10:00 ISM Non-Manufacturing Composite – consensus 53.1
10:00 Factory Orders – consensus 1.5%
Global Economics
CNY Industrial Profits YTD
01:00 CNY Non-manufacturing PMI
07:00 CHF UBS Real Estate Bubble Index
08:55 EUR German PMI
09:30 GBP PMI
10:00 EUR Euro-Zone Retail Sales
12:00 CAD Unemployment Rate
Earnings
Before: ABMD, AXL, AON, BEAM, BAH, CLX, CEG, UFS, EL, HNT, IMN, KNL, MAC, MOD, MGI, SPG, SIRO, SEP, SPB, TSN, WY, YRCW
Twitter: @MichaelSedacca
Daily Commodity Spot: Are Currencies Coming to a Near-Term Extreme?
January 27th, 2012
The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.
Today's Highlight: Currencies extended their recent trending, probing above recent highs, while stocks fell to their range's lower-end. Have currencies gotten ahead of the game, and are they coming into near-term extremes?
Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
Today's Highlight: Currencies extended their recent trending, probing above recent highs, while stocks fell to their range's lower-end. Have currencies gotten ahead of the game, and are they coming into near-term extremes?
Dollar Basket
Mar Contract DX; (UUP), (UDN)
Wednesday's tepid probe of fresh lows for the week was extended lower nonetheless on Thursday. And now Friday has closed below the consolidation for a second consecutive session. This setup typically produces at least one more lower low. Also, currencies tend to duplicate Friday's behavior on Monday morning, making fresh lows likely Monday morning. Recovering to close positive Monday after probing fresh lows could form a bottom. Otherwise, the trend remains down.
Eurodollar
Mar Contract EC; (FXE)
Although the open's gap up to 1.3145 was retraced back down to Thursday's 1.3104 close, Thursday's 1.3186 high was eventually recovered Friday up to 1.3223. The rally's 1.3333 target remains intact, with next resistance at 1.3285.
Gold
Feb Contract GC; (GLD)
Holding above 1719.00-1720.00 through Thursday's close made the rally likely to extend to 1746.50. Slightly higher highs probing 1736.00 Friday still managed to close just above Thursday's highs, keeping alive the rally's momentum. Now the rally needs pullbacks to hold any test down to 1724.50.
Silver
Mar Contract SI; (SLV)
Friday's opening dip was recovered to probe and close above Thursday's highs. Having retested the rally's 33.55 target intraday, and having ranged around Thursday's high all Friday afternoon, the higher close does not signal the rally being ready to resume.
30-Year Treasury
Mar Contract US; (TLT)
Friday's opening gap down to 142-05 support was recovered to the 143-04 bounce limit. Its resistance needed to hold to for assurance that a new downleg was about to begin. But afternoon highs retested Wednesday's 143-16 FOMC peak. Reversing back down Monday under 143-04 would be credible for launching a new downleg, but not immediately rejecting Friday's rally would make it likely to extend higher Monday.
Crude Oil
Mar Contract CL; (USO)
Friday's choppy session maintained Thursday's range. While that may seem neither bullish nor bearish, the burden of proof was on sellers to extend Thursday afternoon's rejection of the morning's gap up. The sell-off must now basically melt-down Monday to be credible, or else a rally back to 103.00 and potentially to 111.00.
Natural Gas
Mar Contract NG; (UNG)
Friday morning's flat ranging around 2.65 broke higher into the afternoon, and then again into the close, attacking the rally's 2.81 target. Regardless, the rally is unlikely to resume without first testing 2.56, and preferably also 2.50 over the course of 2-3 days.
Wednesday's tepid probe of fresh lows for the week was extended lower nonetheless on Thursday. And now Friday has closed below the consolidation for a second consecutive session. This setup typically produces at least one more lower low. Also, currencies tend to duplicate Friday's behavior on Monday morning, making fresh lows likely Monday morning. Recovering to close positive Monday after probing fresh lows could form a bottom. Otherwise, the trend remains down.
Eurodollar
Mar Contract EC; (FXE)
Although the open's gap up to 1.3145 was retraced back down to Thursday's 1.3104 close, Thursday's 1.3186 high was eventually recovered Friday up to 1.3223. The rally's 1.3333 target remains intact, with next resistance at 1.3285.
Gold
Feb Contract GC; (GLD)
Holding above 1719.00-1720.00 through Thursday's close made the rally likely to extend to 1746.50. Slightly higher highs probing 1736.00 Friday still managed to close just above Thursday's highs, keeping alive the rally's momentum. Now the rally needs pullbacks to hold any test down to 1724.50.
Silver
Mar Contract SI; (SLV)
Friday's opening dip was recovered to probe and close above Thursday's highs. Having retested the rally's 33.55 target intraday, and having ranged around Thursday's high all Friday afternoon, the higher close does not signal the rally being ready to resume.
30-Year Treasury
Mar Contract US; (TLT)
Friday's opening gap down to 142-05 support was recovered to the 143-04 bounce limit. Its resistance needed to hold to for assurance that a new downleg was about to begin. But afternoon highs retested Wednesday's 143-16 FOMC peak. Reversing back down Monday under 143-04 would be credible for launching a new downleg, but not immediately rejecting Friday's rally would make it likely to extend higher Monday.
Crude Oil
Mar Contract CL; (USO)
Friday's choppy session maintained Thursday's range. While that may seem neither bullish nor bearish, the burden of proof was on sellers to extend Thursday afternoon's rejection of the morning's gap up. The sell-off must now basically melt-down Monday to be credible, or else a rally back to 103.00 and potentially to 111.00.
Natural Gas
Mar Contract NG; (UNG)
Friday morning's flat ranging around 2.65 broke higher into the afternoon, and then again into the close, attacking the rally's 2.81 target. Regardless, the rally is unlikely to resume without first testing 2.56, and preferably also 2.50 over the course of 2-3 days.
Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
Buzz on the Street: Apple Back on Top
January 27th, 2012
All day and every day, some of the stock market's best and brightest traders and money managers share their ideas, insights and analysis in real-time on Minyanville's Buzz & Banter. Below are some excerpts from this week's Buzz. Click here for a 14 day free trial.
Note: Some links may require Buzz subscriptions.
Monday January 23, 2012
Starbooze
Steve Smith
News that Starbucks (SBUX) is planning on expanding its roll out of serving wine and beer at U.S. locations is the wrong recipe and strikes me as evidence that the company is once again straying from its core competency in search for growth. While the initial plans for turning it's coffee shops into wine bars is said to be limited to less than 30 of its 10,000 current locations it is reminiscent of its foray a few years ago of introducing wide variety of food which fell flat and ultimately resulted in a retrenchment and closing of down of many locations. It is a bad mindset.
I understand SBUX belief that it is a "third space" and offering alcohol might extend the after work business but I just don't see the urban customers it's targeting as choosing it over an actual brew pub to enjoy some craft beer. And it will create friction between existing customers that are looking to sip caffeine and WiFi out their extra hours.
While I'm not sure if today's sell-off in SBUX shares are due to this news, it shouldn't be in the near term as the numbers aren't enough to move the needle, it could be taken as a warning that the company is once again trying to be too many things to too many people. It should focus its growth on Asian expansion, not trying to compete for the happy hour or Merlot loving crowd.
I'm looking at pairing up a long such as Tim Horton's (THI), which really has room to grow in the U.S. and beyond, with shorting SBUX. I'll work up a plan tonight in my local Dunkin Donuts.
Dancing With Bernie and the Jets
Jeffrey Cooper
With this week being a 2 day Fed meeting, the normal expectation for this years stair step march to get upended runs ripe.
With this morning's nominal overthrow of the rising wedge in the S&P shown in this morning's Daily market Report and the turn into the red, the stage is set for a reversion to the mean of this year's recent dampened volatility and a gonzo of an FOMC Cha Cha Cha.
(click to enlarge)
Euro Target Causing Resistance
Rod David
After bottoming at the decline's 1.2650 target, the Euro's recovery above 1.2750 put into play a bounce targeting 1.3050.
1.3050's test this morning is clearly causing resistance. Is that the bounce's peak prior to resuming the decline? Possibly.
But a pullback has room down to 1.2950 before the bounce loses its traction. And with or without a pullback, the bounce still has potential for extending higher to test 1.3333 and 1.3400.
I'll have more in today's Daily Commodity Spot article towards the close.
Short Treasuries by Shorting the Yen
Michael A. Gayed
I've written about this idea before, but it bares repeating. When markets are in risk-off mode, Treasuries and the Yen both tend to do well as money seeks safety from volatility and equity markets. The two tend to be highly correlated, meaning that one way of betting against Treasuries if you're a currency trader is to short the Japanese Yen. Having said all that, ask yourself who wants lower prices more: the Bank of Japan on the Yen, or the Fed in the Treasury market? Japan needs to export and a weaker Yen would help with that. The Fed wants to put a lid on interest rates and a floor in bond prices.
So if you want to short Treasuries, consider shorting the Yen instead.
Tuesday January 24, 2012
The Calm Before the Storm?
Todd Harrison
We've got the lowest trading volume since 1999, the VXO is trading in the teens (despite the binary global situation), Apple (AAPL) will report earnings tonight and the FOMC -- chock full of whispers of QE3 -- is slated for tomorrow.
Where oh where is the action, my friends?
One of two dynamics are in play and they have opposite implications (naturally). This is either the calm before the downside storm -- the denial before the migration and panic -- following a month-long ramp that has everyone bulled up, or equities are working off the overbought condition through time rather than price.
As discussed yesterday in real-time here on the Buzz , I layered into NDX puts to position myself for some downside action in tech, but the tape has held tight, albeit a smidgen lower. One would have thought that the specter of a Greek default, which up-ticked on our probability spectrum overnight, would be enough to dent the momentum but it didn't matter and the reaction to news is always more important than the news itself.
Do I think that we've got a rude awakening ahead? Yep -- even if global austerity measures are successfully implemented, it will be a serious drag on growth (and that's the best case scenario). Do I believe that starts tomorrow? If I knew the way, I would take you home. As I don't, I'm left with a decision to make.
The last time I left the office--over the holidays for a family vacation -- I zagged against my discipline and left risk on the books. I was rewarded -- Research in Motion (RIMM) enjoyed a successful sprint -- but it wasn't the smartest move I ever made. I got lucky, and the two should never be confused.
This time around, as I ready for a business trip to Panama that will last through the weekend, I've got the aforementioned chunk of NDX puts, and while I sense a gut-check coming, I've been doing this long enough to understand that discipline must always trump conviction, even if you stumble on previous attempts.
As such, in the interest of full disclosure, I'm gonna peel out of those puppies as we edge toward the close and hit this trip with a flat book and a clear head. Sometimes the ability not to trade is as important as trading ability, and while the gambler in me entertained the idea of leaving partial exposure on my sheets, the pragmatist just wont let it happen.
In other news, Wall Street lost another of its own today when Ticonderoga Securities announced that it will shutter the doors (joining WJB Securities, which made a similar announcement a few weeks ago). There is no way to sugarcoat how difficult it is out there (white light to those families) but there is a silver lining on that cloud -- in order to get through this, we have to go through it, and we're going through it now.
As discussed in 2006:
Traditional brokers will need to highlight their human capital and provide a platform that marries low cost trading solutions with real-time information flow. The current "one and done" morning call won't cut it, not in the world of instant messages and real-time decision making.
Therein lies the task at hand for financial professionals around the world-the sell-side, once a conduit of execution, must reassert themselves and demonstrate relative and compliant value if they're to stay in the mix. There will always be a Wall Street and a need for capital markets. The trick, for an industry mired in overcapacity, is to proactively adapt before the trade passes them by.
If you're on the sell side, be thankful for demonstrating the capacity and resolve needed to chew through these enormously difficult times. There will be winners in the new world and the fact that you're reading this means you're in the running to be one of them. Indeed, one man gathers what another man spills.
As always, I hope this finds you well.
R.P.
Actionable Trade in X
Peter Prudden
As witnessed by the chart below, US Steel (X) has built itself a nice little wedge pattern here. I am long the stock and will look to add additional share size if it can get through $29 with volume.
(click to enlarge)
DinDin Part II?
Fil Zucchi
This morning Dendreon (DNDN) dipped, turned on a dime, and now is $0.40 away from $14.66, the break out level of its consolidation area. Doesn't mean that it will bust out, but technical break-outs on highly shorted, low-priced stocks can be a combustible recipe. Something to watch for on a sleepy day.
Apple Sees Your Estimate and Raises It by $4
Michael Comeau
Apple (AAPL) just reported its fiscal first-quarter numbers and they're quite shocking, to say the least.
I wrote this morning that Apple needed to put up monster numbers to get the stock moving again, and all I have to say is "Mission Accomplished."
Earnings came in at $13.87 per share, nearly $4 above consensus. Revenues were equally impressive at $46 billion, versus a $39 billion consensus. Gross margins were a shocking 44.7%, which is well above what anyone thought was possible.
iPhone sales were 37.4 million, which absolutely crushed street estimates hovering around the 30-million unit mark. iPad sales of 14 million were also above expectations. Mac sales were 5.2 million, growing 26% year-over-year.
Second-quarter guidance is $8.50 per share versus Wall Street's $8.00 forecast. Revenues are seen coming in at $32.5 billion, which is just slightly above consensus.
Apple is halted as I'm writing this, but shares of Apple suppliers and related companies, including the likes of Qualcomm (QCOM), Broadcom (BRCM), and Nuance Communications (NUAN) are popping on the news. Nasdaq (^IXIC) and S&P (^GSPC) Futures are also up significantly after hours,no surprising given Apple's huge weighting in each.
Wednesday January 25, 2012
FOMC Decision
Michael Sedacca
The Fed's FOMC has adjusted their call for a zero interest rate policy, extending the low rates until 2014, and to continue a "highly accommodative" monetary policy. Of the FOMC members, Lacker dissented.
They reiterated their call that there are "significant downside risks" and that inflation is "subdued" (key). They are still unhappy with the unemployment rate and the housing market remains in a bad spot. They will continue their policy of reinvesting their returns on the MBS they hold into new MBS, and Operation Twist remains unchanged.
We see this as a very dovish mindset change going forward.
FOMC Intent on Being the Bank of Japan
Peter Boockvar
The FOMC commentary on the economy and inflation is pretty much unchanged from the statement they gave in Dec. They continue to believe the economy has been expanding moderately, notwithstanding some slowing in global growth. The only real change of substance was they replaced the time frame of keeping rates 'exceptionally low' from mid 2013 to late 2014. This squares with an extremely dovish Fed where 2 of the 3 new members are so and now 8 of the 10 voting members are. Lacker, a new voting member and one of the 2 remaining hawks, dissented and didn't want to specify the time frame.
Bottom line, the Fed continues to believe that pinning rates at near zero is the cure all and seem to ignore the experience so far in the US and certainly what Japan has gone thru. This is NOT economic stimulus as they seem to think. Also, calling for where rates will be by late 2014 is a waste as anything can change in economic growth and inflation well before then. What the Fed is trying to do is jawbone the yield curve with their words.
Actionable -- CTXS
Jeffrey Cooper
Citrix Systems (CTXS) shows 3 lower highs from its late October pivot high.
Recently, it shows a couple of distribution days at its 200 dma, and has pulled back to its 50 day leaving an indecision pattern.
Drilling down to the 10 min, CTXS shows a series of lower highs since yesterday's peak, and is tracing out bear flags followed by probes lower.
Breaking its 50 dma with authority will coincide with a violation of a rising trendline up from December lows.
See the daily CTXS chart from late October with 200 and 50 dma's, and the 10 minute CTXS chart for this week, below.
(click to enlarge)
(click to enlarge)
Thursday January 26, 2012
The is the Line in the Sand For the U.S. Dollar Index
Cody Tafel
As I mentioned earlier this week, a move below 80 in the US Dollar Index will set up a great risk reward buying opportunity. We are getting that move today, as the DX is trading just above 79.25, and I think now is the time to "Back up the Truck!" here on US Dollar Index long positions with a tight stop. I would use a close below the 79 level as a stop on DX long positions, but be careful, because as you can see late last October the stops got run pretty hard on a fakeout move below 76. However, this might be the one "fat pitch" we get this year to buy a pullback in the US Dollar uptrend. See the weekly chart below with strong 200 week moving average support right here. Risking a quarter with $10 of upside is a trade I will take any day!
Good luck out there…these certainly are interesting markets!
(click to enlarge)
Gold and Silver At Pivotal Juncture: A Strategy
John Cassimatis
Several days ago I had written a piece for the Buzz giving some downtrend line numbers. I had 1688 gold and 33.30-60 silver. As we hadn't quite tested those marks, I thought a sharp NY rally to those levels was probable. Yesterday I woke up with big positions, but threw a bunch to the wind in frustration it was all taking too long. Then, midday, the metals took over. As in the life of a trader, it was a profitable, but entirely frustrating day. Since MF Global, I've been forced to keep 'em a little tighter, something I am not used to or fond of. Somedays, in the trading business, showing up for work is about the worst thing you can do.
Downtrend lines are funny things. In my opinion, they are the single greatest piece of technical analysis charts have to offer. First off, so many can be drawn. Second, you can get a different result depending on the overall timeframe of the chart you are using. Third, often times, you can draw it this way, or that way, or even this way if we don't count that. Fourth, there are multiple kinds (connecting peaks being the most common). Finally, they usually never lie, but when they pull a fake out, the fugazi, boy does it hurt.
Downtrend lines are tricky indeed. In the aftermath of today's rally, I am studying them quite closely in both gold and silver. Technically, if you really want to, with some prayer involved, you can make a case that both gold and silver, despite their rally, remained trapped as of 12 midnight Thursday morning, by their upmost possible downtrends that the most aggressive of traders might key off of. A break above here will very likely cement our bottom and see a potentially vigorous assent begin. Alas, there is still that outside chance that this was it, fully satisfying the metals penchant for testing lines of importance. The next day or two will provide the answer. If gold stays capped at say 1716 and sells off into the 1685s, my caution levels will rise rapidly. Silver too, if capped at 33.40 and a back and forth between 32.60-33.20 ensues tomorrow (today as you are reading it), then Friday will lay down the verdict. A break above 1720 gold, 33.50 silver pretty much means we have broken out. Don't panic. Grab some there if possible, but save the bulk for the likely retest of the downtrend line from the north side of town. In this case, one would look for buys around 33ish silver and 1690 gold. Even in a super bullish scenario, those prices are quite possible next week. They will represent perhaps the lowest risk buys of the year, depending on just how convincingly we manage to break the aforementioned targets.
All eyes are now on this last possible bastion of resistance by the bulls. I myself would love to see the bears hold it here as I am not mentally ready to go full force, but this is not in my control. This is truly the moment. As I stated yesterday, gold's general sluggishness pre-ramp was coupled by some bullish factors including a general price break, improved COT report (less speculation), and far more enticing RSIs. As good investigators do, they follow the evidence, not necessarily what they want to believe (like poor cops). In my opinion, a break into the 1720s gold and high 33s silver will point significant evidence towards big gains to come. Many of us have known that gold's bubble has not burst, and that the great parabola is still to come. We just didn't know when it would start and how low the metals would go beforehand. Clarity could come our way--This "evidence" (1720+Gold, 33.50+Silver) would likely rule out some of the more punishing scenarios that have existed to date.
I have unequivocally stated that the metals parabola is still to come. This is easy. I don't write for Minyanville to tell you the easy. I try to explain the hard, the details, and the devil in those details too. My followers know I am human. I obviously have my times when I misread (euphemism) things. I know I am right more than not though. And I'm good at picking prices, once I have full confidence in the true direction of the move. At these prices, if you like to get aggressive with the metals without confirmation, you must be careful. No one wants to be right long-term, but get squeezed out before the move--this is the great challenge. Until downtrends are convincingly broken to the upside, this particular risk looms large. That's why the market typically rejoices so when such legitimate fears are stripped. My method has always been to buy weakness to obtain a base. Then, I like to add on accomplishments (like breaks of downtrend lines). Silver's recent breach of 30.90 broke a lesser resistance point and the gap to 33.30 was filled rather rapidly. I took advantage of it and now am all eyes as we wrestle with the larger, more significant of the two.
It's never fun to buy a rally. I hate it personally. My greatest challenge as a trader has been paying up. You can really get burned. A break of this final downtrend likely insures higher pricing to follow, perhaps significantly so. For the next two days, my motto is this--overcome "final downtrend resistance," and I am going to work myself in pretty aggressively (not all at one price or day). Downside risk should be reasonably low, and read the following note to see my bids. The weaker amongst us will lament 1655 sales before the explosion (I made one). The strong will move on, pay up, and hope that the market gets them in the money quick.
Last note: If 1720 or 33.50 silver are not breached to the upside in a day or two, serious trouble could be on the horizon. I have given you my game plan. For tonight (and tomorrow), I am working 17029 gold bids down to 1693. For the silver, I'm in the 32.80s-90s. Even if the metals ultimately fail, there should be ample opportunity to get out if final resistance is not breached. It's a good way to get started if they do the opposite, to pick a bit, despite that chance of a top. I will update this post tomorrow. If gold is above 1720 in the morning, I'm going to publish this anyway with a follow-up. At that point though, I'll likely be talking only about where to try to add exposure
Upmove in APKT
Michael Paulenoff
While the overall market waffles and appears a bit exhausted "up here," we continue to like Acme Packet (APKT). Both my near- and intermediate-term work argue that APKT ended a major bear phase at its Jan 4 low at 25.20 and that the upmove to Tuesday's high at 31.78 represents the first up-leg of a new bull-recovery period.
This recovery appears destined for 40.00 and then 45.00-47.00 thereafter. Initial near-term support resides at 29.40/0, which if violated will call for a deeper retracement of the January upmove.
(click to enlarge)
Friday January 27 2012
Real GDP A Touch Light, Nominal GDP Very Light
Peter Boockvar
After 3 quarters in a row that averaged just 1.2%, Q4 GDP grew 2.8%, a touch below expectations of 3.0%. BUT, Nominal GDP grew well below forecasts. Because the price deflator was up just 0.4% vs the estimate of 1.9%, nominal GDP was up 3.2% vs. the estimate of 4.9%. Personal Consumption rose 2.0% vs the forecast of 2.4%. Fixed Investment rose 3.3%, helped by a 5.2% increase in equipment and software spending, and residential construction rose by 10.9%. Trade was a slight drag on GDP growth, and government spending was led by a 12.5% decline on national defense spending. State and local government spending fell by 2.6%. Inventories added almost 2 points to growth and taking out this influence, we saw Real Final Sales rise just 0.8% vs 3.2% in Q3. Thus, inventories were a large swing factor in the Q4 rebound.
Bottom line, real GDP was near estimates, but nominal GDP was the weakest since Q3 2009, and Real Final Sales were the 2nd softest since Q1 2010. Thus, very mixed is how I would best describe this economic recovery and firm footing we don't have in the face of a European slowdown and Asian moderation.
Juniper Misses and Takes a Big Hit
Sean Udall
Well the option players expecting a big move were mostly correct. I was hoping for $3 in either direction, but right now it's $2 and change.
I think Juniper (JNPR) today is much like Qualcomm (QCOM) in mid-2010 (or Cisco (CSCO) just last year) where many factors were due to start producing growth and were quite obvious. Yet most investors were focused with extreme myopia on the short term results and ignoring the future and shedding QCOM in droves on a couple muted quarterly releases. It didn't matter that a host of explosive 3G initiatives were about to be unleashed, or that the company was still producing great cash flow and was trading at 3 times net cash. At $18-19 JNPR is trading at 3 times net cash.
Lastly, at that time (mid 2010) I Buzzed that I thought QCOM just had it's last bad quarter and was aggressively adding to the shares in the low $30's. While JNPR's situation isn't quite as clear today, I feel that this is likely its last bad quarter. The amount of aggression in my purchases will be determined by price. In the low $20's I'll grab some and more in the $19's. If we see the $18's I'll double or triple my scale from purchases in the low-mid $20's.
Low Rates = High Rates
Michael A. Gayed
With the Fed's promise to continue its ZIRP (Zero Interest Rate Policy) through 2014, one would think that rates will be forced to stay low for a long long time. The problem with this line of thinking is which interest rates? Notice that long Treasury interest rates on the day of the Fed's announcement initially sent yields lower before rising by the close. Expecting QE3? Then why are 30 Year yields at 3.10% and not lower? The Fed's pledge means inflation expectations are going to be forced to return to markets, which would steepen the yield curve and cause higher rates longer out in time. That's bullish because it means the environment favors risk-taking.
Fil Zucchi
Can You Say Societal Acrimony?
In response to an editorial in a major German newspaper using Francesco Schettino - the captain of the sunken Costa Concordia cruise ship - as a symbol and stereotype of Italian cowardice, this response from Il Giornale, Italy's second largest newspaper. The translation is: "We Have Schettino, You Have Auschwitz" and below "We Are Not A Cowardly People".
Do you think Italians will go along with tough austerity so that they can pay their debts to their German brothers?
Twitter: @Minyanville