machinehead Posted December 5, 2002 Report Share Posted December 5, 2002 The Dow averages took a famous whack on 13 OCT 1989 when a buyout of UAL fell through. Today on UAL bankruptcy news, the Transports were flat. The impact was on Industrial stocks such as Boeing (airframe maker), GE (engine maker) and JPM (financier). In the 1989 instance, the DJIA clawed back all of its losses within 2-1/2 months, and eventually made it 8% higher by July 1990, before taking a more serious spill. A Fibonacci 13 years later, UAL has struck again. The news is well discounted. Once UAL files, the reflation of GE, BA, JPM et al can resume. Link to comment Share on other sites More sharing options...
weak hand Posted December 5, 2002 Report Share Posted December 5, 2002 However, the day will end up. That's my uneducated guess for tomorrow. Link to comment Share on other sites More sharing options...
buttugly Posted December 5, 2002 Report Share Posted December 5, 2002 Intel's midquarter update is far from being good news. Remember this is a seasonally strong period for semiconductors - as electronic makers stock up on semiconductors that make DVD players, toys, game consoles etc for the Christmas New Year period. War in Iraq won't start until we are past the Christmas New Year shopping period. As they need people in the Malls not in front of the Box. My Economist friend told me the S&P 500 is priced for an manufacturing ISM of 55, yet we just got a figure of 49.2. I asked him why the market is so obsessed with the manufacturing ISM, when manufacturing makes up such a small part of economy. He explained that the service sector has low volatility, whereas manufacturing has higher volatility that moves the market. In layman's terms, what he said is the S&P 500 is priced for 4% earnings growth which is conflicting with what the ISM is telling the market. Ok so the market doesn't necessarily follow the economy. However where the market is pricing in a recovery that isn't emerging then the market will react. Mark, tonight's piece was exceptional. Link to comment Share on other sites More sharing options...
Guest jtom Posted December 5, 2002 Report Share Posted December 5, 2002 Mark, Your excellent commentary reminded me of a good piece I remember from awhile back on fallstreet. It's called Insurance and Nakedness: http://www.fallstreet.com/Spotlight/feb140...eb1402picks.htm Keep up the excellent work. Just found your stuff. It's much appreciated by those of us who can't watch the markets during the day. -J Link to comment Share on other sites More sharing options...
DrStool Posted December 5, 2002 Report Share Posted December 5, 2002 For those who MISSED the BIG announcement on December 3! (just yankin' yer chain sweef. :wink2: ) Link to comment Share on other sites More sharing options...
DrStool Posted December 5, 2002 Report Share Posted December 5, 2002 What does the market have to do with the economy? Absolutely nothing. At leastt in terms of cause and effect. The market is about liquidity flows, period. In tonight's Anals you'll see the proof- the direct relationship between mortgage creation, broad money growth, market movements, and short term economic activity. The notion that the market is a discounting mechanism is simply false. In the aggregate, the players have no idea what business is going to be like tomorrow, let alone next year. Furthermore, the Fed reflatulation, if that's what it is, isn't going to matter. First of all, it is by no means clear that they have, in fact, been pumping any harder than at any time over the past two years. Second, even if they were, the Catch 22 effect would be in play. The bond market will not cooperate with any signs of renewed growth or reflation. If 10 year bond yileds are allowed to get over 4.5%, game over. Al knows this, and he knows he can't be too loose. We're still in a bear market, and it's not going to end any time soon, regardless of what the Fed does, or what the market insiders try to do to keep the flotation devices working. The Anals will be posted around 8 PM ET. Link to comment Share on other sites More sharing options...
buttugly Posted December 5, 2002 Report Share Posted December 5, 2002 I was surprised when I heard Bill Gates was buying up Nextel, until I realized that it is Nextel Partners (NXTP) not Nextel Communications (NXTL). A bit like Buffet and LVLT. Got to read the fine print. Having said that I closed my VZ position as a friend who is a value manager said they have been buying. Which probably means VZ collapses tomorrow. Link to comment Share on other sites More sharing options...
brian4 Posted December 5, 2002 Report Share Posted December 5, 2002 Good piece Mark! Rog- according to my alert service that charge INTEL is taking is for all the dough they LOST on their own INVESTMENTS. Also from service-"FITCH rating may downgrade IBM's commercial paper" the problem is IBM is putting a billion cash and a billion in stock to shore up their pension fund and all that paper and cash according to FITCH may impact their credit. FITCH said "they would wait to see exactly what and how IBM plans to do this before reaching a decision" Well I had a KA CHING! day-closed my full position shorts on MXIM and KLAC for good coin and am well in the green on SPX, OEX, and QQQ puts-plus added MMM at the open and she too closed nicely in the green. It SHOULD be a continuation SELL in the morning key SUPPORT of 8665 and 910 was taken out today and that now becomes RESISTANCE. There was a hell of a battle fought today if you watched the market internals you saw it in living color but for once DA BOYZ couldn't hold it what intervention always does is to delay a decline to the point where the pressure just keeps building to the point where the lid blows off that is where we are now. Although I still feel the big one is after Xmas-this one isn't over yet-I think by midweek next we'll be a biiiig chunk lower. Stay Short!-Trade Safe! Link to comment Share on other sites More sharing options...
phatbubble Posted December 5, 2002 Report Share Posted December 5, 2002 nice mark. blazing. :grin: Link to comment Share on other sites More sharing options...
martialcomp Posted December 5, 2002 Report Share Posted December 5, 2002 Doc, do you mean that the 4.5% area on the 10 year will put even more pressure on 30 year mortgage rates? It seems as though the 30 year mortgage is effected by bond yields and when bond yields go up, 30 year fixed mortgages go up. Also, if this is the case, then the housing bubble will pop, mortgage refis will dry up and consumers will not have any cash to prop up this dead economy. Link to comment Share on other sites More sharing options...
GTNWORSE Posted December 5, 2002 Report Share Posted December 5, 2002 Hey Guys, Yes Doc it's still a bear market, but to completely rule out a cyclical bull emerging at this point would be suicidal, imho. By the way Mark the Fib level discussed is 9038, but if it only that easy!! Volume on this consolidation, as Mark pointed out, is getting very thin. Jobs report tomorrow will be very interesting indeed. If you are daytrading, and are still short ,t might have been a good idea to have exited today. I thought we might get to Dow 8200-8300 but it's looking less and less likely. Looking to go long very, very soon. Good Luck Link to comment Share on other sites More sharing options...
phatbubble Posted December 6, 2002 Report Share Posted December 6, 2002 hey doc, did anybody answer your IDS question about isolating times when the bradley did or didn't work? Link to comment Share on other sites More sharing options...
brian4 Posted December 6, 2002 Report Share Posted December 6, 2002 Now GTN-remember what you said last time you went short "now that I'm in the damn thing will go the other way" well you were right it did! Sooo now that you're thinking long-I feel better about being short.! Luck Buddy! Folks I own a fair number of gold stocks-AEM, GG, RGLD & CEF. Gold is going to make a move here and it looks like a SPIKE-watch 71 on the XAU now 1.08 points away if it breaks a move to 90 is not out of the question. The physical metal is also primed for a huge move FEB closed today @ $324.50 up $2.30. The real kicker is INO is BULLISH as is PRECHTER who has been bearish like forever! The common touted number seems to be north of $338.- so it looks like an opportunity about to happen. When GOLD moves sharply it is akin to the canary in the coal mine singing-it could be war or credit or derivative blowoff or many things but it's a BAAAD sign for the markets. Trade Safe! Link to comment Share on other sites More sharing options...
buttugly Posted December 6, 2002 Report Share Posted December 6, 2002 MH: I am not sure of the attraction of GE. To me it is effectively a financial institution yet it has a price to book of 4.24. It has massive debt, a balance sheet from hell, declining revenues. And it has been buying up all sorts of garbage. Short term it might move up to it's 200 day moving average - but the long term chart looks very ugly. http://finance.yahoo.com/q?s=GE&d=c&k=c1&a...my&l=on&z=m&q=l What am I missing? Link to comment Share on other sites More sharing options...
PileDriver Posted December 6, 2002 Report Share Posted December 6, 2002 going long at these levels is completely suicidal. Odds favor down more than up by a very large margin. July and Oct lows was where one should have gone long for a low-risk bear rally trade - too late now dude - risk is very high for dongers now, very low for shorters. Link to comment Share on other sites More sharing options...
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