Monday, May 20, 2013

5 gut checks before market opens


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MarketWatch
 
Need to Know
MAY 20, 2013

5 gut checks before the stock market's opening bell

By Shawn Langlois
 
Need to Know
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Good morning.

Yahoo  shelling out more than $1 billion for Tumblr, with its cat beards and toothless actresses ,  isn't doing much to throw water on the increasingly popular notion that the market's bubbly melt-up mode is only in the beginning stages.

Ed Yardeni says that Ben Bernanke's commencement speech over the weekend is "reminiscent of his predecessor's cheerleading of the 1990s bull market" and could lead to a melt-up from these levels .

We seem to be in one of those rare situations -- both scary and wonderful at the same time -- where no news is bad news. Any sort of grim economic readings will only give the Federal Reserve more reason to keep the cash flowing, while any good news, well, is still good news. "God forbid things do improve, watch out above," Upside Trader wrote in his "Throw out your playbook" blog post .

"The bulls want to be so much 'more long' than they are, but they are waiting for a pullback to take meaningful long positions." he said. "A non meaningful pullback leaves them no choice but to chase prices higher."

Key market gauges: With short sellers flocking in numbers not seen since way back in 2006, gold  is looking at its eighth straight losing session, off more than 1% early. This would mark the longest such streak since 2009. And silver  isn't all that healthy, either. Read: Metal stocks .

In Asia, stocks  kicked off the week in the green, with the Hang Seng  leading the way, up 1.8% to 23,493. Not bad, but there's a long way to go before the Hong Kong index hits 50,000, as Morgan Stanley predicts . The Nikkei  rose 1.5% to close above the Dow for the first time in more than three years . South Korea stocks  sat out the fun. Read: Asia Markets .

Europe  is playing along, with most indexes up in morning action. Italy's FTSE MIB  is one exception. Futures on the Dow  and S&P  are just flailing around the flat line .

The buzz: Along with Yahoo, gold  and silver  are jockeying for the top spot on the StockTwits trending list as investors mull their respective swoons. Our call of the day might be able to help out on that front. Qihoo , Caesars  and Elan  are also on the radar this morning.

Boeing  is a hot topic on Google with its Dreamliner 787 getting back in the air  in the U.S. after being grounded at the beginning of the year for battery problems. The stock is up 1% premarket. Now it's time to focus on other issues .

On Market IQ, Solar City  is drawing clicks after the stock surged 26% Friday. Shares are up more than 2% in premarket action, as well. Here's one guy who says a Goldman Sachs financing deal gives the stock plenty of more upside from here. Not a bad year for Tesla's Elon Musk, who chairs the company.

The chart of the day: Traders are diving into the dollar these days, with cumulative positioning hovering above $30 billion for only the fifth week in the past 15 years, according to the Short Side of Long blog . All the other times took place in June 2012, when the euro crisis was in full bloom. At the same time, the blogger pointed out that traders are short every single major currency in the G-10, except for the Kiwi dollar.
Short Side of Long
The call of the day: Are you holding out for that inevitable snap back in precious metal prices? Grab a hard hat because The Fly from the iBankCoin blog  isn't mincing words: "If you're still in gold/silver, you deserve to lose money." He warned investors of the "Great Big Silver Run of 2013" and said the "generational top" has been in for months. "You're just too god damned stupid to realize it" and you continue to buy into a thesis that is "supported by hunched backed creatures, who live in different realms, think about the world in different terms." So, you DON'T like gold right now?

Cam Hui, of the Humble Student of the Markets blog , sees it all together differently, suggesting there's some upside from here  as commodities stabilize.

Random reads: Economists are not equipped to to be stockpickers, says economist.

Now that we know the next installment of the Star Wars series will be filmed in the U.K., here are the kinds of things we can expect to see .

In that listy spirit, let's go back to Tumblr, which could turn out to be a "far more expensive mistake" than Flickr. Useful -- 10 blogs "that make travel more interesting."  Not useful -- "Kim Jong-Il looking at things ."

Take a glimpse at the Tumblr guy's life.

And speaking of North Korea, it's back in "attention-seeking toddler" mode .

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