The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today. To see all that RealMoney offers, click here for a free trial.
1.Advance-Decline Line Is Breaking Out
By Ron Insana
3:57 p.m. EDT The cumulative NYSE advance-decline line is breaking out. While I'd like to see a dramatic uptick in the number of individual stocks making new 52-week highs, the new high in this closely followed breadth indicator is extremely important. If coupled with continued in advances in the Dow transports, a break through the upper Bollinger band and continued leadership from financials and technology, we can stop worrying about whether this is a "real bull market" or just a bear market bounce.
2. Steeper My Yield Curve To Thee
By Howard Simons
3:17 p.m. EDT I spent a little time this morning with a reporter doing a personal finance story on bond laddering and suggested retail investors should weight their exposure to the shorter end of the yield curve, generally good advice in a steep yield curve environment. This week's action is telling. After six years, all Treasuries rose more than 30 basis points; inside the one-year, the changes were -0.3 basis points for the three-month and 2.3 basis points for the six-month. Whatever gain you can make on coupon income at longer maturities can be lost in a heartbeat if long-term rates rise. The modified duration of the 3.125% Treasury due May 15, 2019 is 8.3; this means the expected loss for 100 basis-point rise in yield is 8.3% of the bond's price. If Anirvan's macro forecast is correct, we should see short-term rates rise. Keeping your exposure short will minimize the long-dated price risk and allow you to ride short-term rates higher if and when they do move higher.
New Highs for Mattel
By Gary Morrow
3:04 p.m. EDT Mattel ( MAT) is trading at new highs for the year following this morning's earnings report. The company reported EPS of 6 vs. last year's 2 cents along, with a drop in net sales of 19%. Investors are very happy with the news and bidding up the stock on heavy volume, up 6.5% the day after a breakaway gap higher open lifted it above heavy resistance near $16.85. Mattel began the year at this level and spent the first quarter well below it. The stock began a strong recovery in early April back up to its 200-day moving average for the first time in eight months. After a shallow pullback, Mattel took off with a 5.5% jump on May 31. The week-long rally lifted the stock back up to its January highs only to fade again at overhead resistance.
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