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#1 wndysrf


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Posted 12 February 2003 - 04:58 PM

Mark’s Market Commentary – February 12, 2003

Famous Last Words: Alan Greenspan – February 11, 2003

“The U.S. economy is likely to accelerate during the course of this year. Unemployment may not fall much and inflation will remain in check. The Fed expects the economy to grow at a 3.25 percent to 3.5 percent inflation-adjusted rate this year, when measured between the fourth quarter of 2002 and last three months of 2003. That's up from 2.8 percent last year. The jobless rate will probably be between 5.75 percent and 6 percent by the fourth quarter, the Fed said. Unemployment fell to 5.7 percent in January after reaching an eight-year high of 6 percent in December. The personal consumption price index, an inflation measure tied to gross domestic product, may rise by 1.25 percent to 1.5 percent this year from 1.9 percent last year.”

The Death March in Europe continues.

AXA slips amid S&P credit downgrade (AXA) by Tomi Kilgore

“Standard and Poor's lowered its credit rating of AXA (AXA) to "AA-" from "AA" to reflect diminished financial flexibility, eroded capitalization and an expected reduction in the group's 2002 operating earnings growth. S&P said the outlook was now "stable." The American Depositary Receipts of the France-based insurer and asset manager are slipping 30 cents, or 2.6 percent, to $11.45.”


Standard and Poor’s, along with Moody’s, is under a growing cloud of suspicion. Rumors of possible collusion with the Matrix to perpetuate the Multilevel Marketing Pyramid are circulating in Paris. Now the company is starting to run for cover. Today, S & P started the first step of a long string of future downgrades of AXA’s credit rating, to reflect a) AXA’s massive equity declines in its investment portfolio, particularly U.S. equities which were widely believed to be the first to rebound in the v-shaped recovery which never showed up; increasing “bagholder” blowups from financial exotica sold to it by U.S. investment banks anxious to “offload” risk to hapless foreign dealmakers scrambling to “catch up” to become “global financial risk players” in the growing Paper Pyramid, and c) disasterous bets made by selling guaranteed return annuity products which are now underwater because of 44-year low interest rates and faltering spread trade profits. S & P claimed that AXA’s outlook was “stable” because any other comment more negative than that would have caused a run on European insurers and sent the Stoxx 50 crashing through the October lows.

Buddha adds his comment:

“Today is also the day after the Lizard King's appearance. Usually to save face they inject FEED fuel. What really worries me is the possibility that the CIA or someone in order to kick start our anal ramming of Bahgdad will set off a radiological bomb here at home. Cramped Colon Powel is pumping and dumping on the need for immediate war.

“Just like Pigmen do on AMAT, just like they did all last year on the semi conductorless sector. It’s a running joke. What about that guy Josephson, who said the semi train was leaving the station in April 2001? He should be horse whipped. Do it in a public forum with satellite coverage. Afterwards ship him down to Anarctica, dump him off on an ice flow with a bow and arrow and a couple of fish hooks in the middle of bear mating season.”

“How dumb and listless is the Public? They are still holding all their Mutuals aren't they? Feeding the American public fat ladden lies is easier than marketing McDonalds in the ghetto. The Gulf of Tonkin is Alive and Well and history repeats itself every 5 minutes on this one. Watch for a precipitous event coming over next weeks, wholly artificial and inflammatory that will trigger the invasion. Lets see now, we have the duct tape, the plastic sheeting, the endless appearances by BlockHead Ridge and Reich Marshall Herr Ashcroft, the constant blaring of loudspeakers. The noise level out of Matrix Information Management is deafening. They have a go date no matter what, its just how are they going to manage it. There is essentially no difference between how these guys operate and the scum we see rigging price daily in the Crack Markets. Birds of a feather.”

Of course, as the broad indexes grind lower, the roar of the Matrix Information Agents gets louder, constantly pumping out news blurbs about some massive price increase in a particular stock. It is simply amazing to hear CBS Marketwatch, Thomson First Call, Breifing.com, Bloomberg, Reuters, and all the rest work the adrenalin pumps for the daytrading HedgeHogs to make it appear that bull market opportunities are everywhere.

A typical announcement like this:

Wireless Facilities rallies ahead of Q4 report (WFII) [/I]by Michael Baron[/I]

“Wireless Facilities (WFII) is rising more than 9 percent to $5.64 in afternoon trades. The San Diego manager of wireless telecommunications networks is scheduled to report its fourth-quarter results after the closing bell. Two anal cysts polled by Thomson First Call are looking for a profit of 4 cents per share in the period, on average.”

Immediately, the first reaction is that this stock is “breaking out” and it must be chased. However, in reality it is just one of many short squeezes. Just another broken stock chased up by Riverboaters in October, now locked in a downtrend, getting hysteria jammed by nervous short sellers.

And remember Singing Machine (SMD)? The stock that ran up 20% off the lows a few weeks ago in one of those “high volume bullish engulfing” patterns? The next possible SINA or NTES? Note how it was smoked today for 14% to new lows.

Imagine being a poor mutual fund manager. Sell SMD, buy EBAY and AMGN. At least he isn’t facing major redemption requests yet. Nor has Bank of America called yet about the margin call. But if one or both happen, then you will see the big caps get slaughtered.

So it appears that we are now seeing the same small cap price destruction we saw early last summer before the big cap waterfall commenced.

And the drumbeat of the NDX participants continues to be “falling revenues, but improved margins due to cost reductions”. Is that any reason to buy MSFT at 8x sales, AMAT at 5x sales, or AMGN at 10x sales? Before long, we will start seeing the Nasdaq stocks come out with press releases like this:

Auspex in freefall on cash concerns, Q2 results (ASPX) by Michael Baron

“Auspex (ASPX) is plunging 10 cents, or 48 percent, to 11 cents, on heavy volume of 3.95 million shares. After Tuesday's closing bell, the Santa Clara, Calif., provider of network attached storage products reported its second-quarter results, and cautioned investors that it still only has enough funding left to function through the end of fiscal 2003. The company posted a second-quarter loss of $5.3 million, or 15 cents per share, narrower than its year-ago loss of $7.9 million, or 17 cents per share. Quarterly revenue, however, fell 11 percent to $5.3 million from $6 million in the same period a year earlier. The company attributed its narrowed loss to improved product margins and continued expense reduction.”

Imagine BRCM and XLNX at 11 cents a share, with only 3 more quarters to live.

Today’s volume was very light. This light volume action is getting a little too scary. What is happening? Are the hopers simply holding and waiting for the War Rally to bail out at higher prices? Or are the Program Robots pushing the market down on no volume to suck in more shorts so they can be blown out on a big squeeze?

This selloff ahead of Options Racket week is no good for the shorts either. I’m lowering my stops to levels just above yesterday’s highs. I just don’t trust this downmove. Doesn’t have the big intraday selling stairsteps like last summer. I still think another 3 – 4 day rally is necessary at some point to build up enough power for the October lows to be smoked.

But on the other hand, there is some very disturbing price action. Do we have any energy experts out there? What is happening to El Paso (EP)? Smoked big time today. Down 20%, the leading volume leader on the NYSE. Along with many other former energy traders now masquerading as utilities. Never mind the terrorists. Something very ugly is about to happen in the derivatives world. No wonder the banks are getting smoked.

Unfortunately, the thinly traded gold and silver stocks (the bordello piano players) might be taken down also. But they will bounce back. Anybody remember the selloffs in EBAY, PNRA, COH, SYMC last year? Those sellers are now sorry. Gold stocks will come back with a vengeance. If you are on margin, get out. If you are holding for the long term bull trend, stay in. Notice that the bull flag on the HUI monthly is still not quite long enough. One more consolidation period is necessary.

By the way, I’m taking advantage of the current weakness and will be buying Gold and Silver Eagle coins tomorrow to replace the Paper Pyramid savings account holding U.S. Pesos earning less than 1%.

As Hypertiger has warned us: Hide your money. The 10-Sigma event may be upon us. Or, a 10-Sigma short squeeze is dead ahead.

Remember that robot on Lost in Space?


Position Summary:

Half Short:

MBI at $50
KLAC at $41
CYMI at $39
NVLS at $35
INTC at $18
MSFT at $56
WHR at $56
INTU at $49
AMGN at $53
CSCO at $14
ORCL at $12
DELL at $25
SBUX at $23
QCOM at $37
COH at $32

Quarter Short:

FRE at $68
LEN at $56
COCO at $40
NCEN at $28
CFC at $55
SYMC at $47

Half Long:

GG at $11
HL at $4.55
BGO at $1.31
PAAS at $5
DROOY at $3.35
GLG at $9
GSS at $1.72
WHT at $1.05
KGC at $2.35
HMY at $16
GFI at $12
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The Weimar Run: Bullphoria!!!!

#2 MrHanky


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Posted 12 February 2003 - 05:24 PM

thanks mark...the bears finally got one.I hope it lasts since all the news really stinks:

tmpw getting smoked after hours..down 20%

TMP Worldwide expects the difficult and challenging market conditions that it experienced in 2002 to continue into 2003. The fragile economy and the unpredictability of world events make it imprudent to discuss specific guidance. Any prior guidance is therefore not applicable.


#3 wndysrf


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Posted 12 February 2003 - 05:28 PM

Late post by Buddha:

"The lull before the Perfect Storm? The trough before the emerging 100 foot Killer Wave? Who can say? We are now entering the time window for Options Racketeering. My forensic analysis of criminal stock operations tells me this is the time when Capone begins strolling dockside in his white camel haired coat and clutching a Harmon Kilebrew autographed baseball bat. All bets are off in this period. Meanwhile back in the Arlington Community Library, Wolfowitz and Rumesfeld are up late nights viewing old 50s Japanese horror videos to glean ideas for their fearmongering crusade against the demons of Iraq. "Rodan", "Attack of the 50 ft. Woman" and "Godzilla meets Kong" are some of their favorites. Get the duct tape going with the plastic sheeting, surround the capital with missle mounts on Suzuki Samauris and keep the loud speakers blaring overtime well into the evening. DR NO is now capable of toasting the West Coast with his new missle systems and Tommy the BlockHead Ridge is rummaging thru all Army-Navy surplus stores for a leather crash helmet large enough to stretch over his gigantic dome. "
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#4 chiefywiefy


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Posted 12 February 2003 - 05:36 PM

Wndysrf, I admit things just don't feel right. Perhaps we should attend Crapvision University coming to our area. That should give us a better feel for the markets. I still have cash to put into the miners but I'm changing my mind here and am also going to buy the physical assets tomorrow. I'm also taking my kids college savings and converting it to real money.

#5 bubbadropping


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Posted 12 February 2003 - 05:48 PM

Windy, please specify how you are making that conversion and then where do you stash the coin? In a bank vault? I may need to be led by the nose on this one since its really an emergency operation. Adam Hamilton says to keep it at home but thats not safe and makes your home into a fortress. Comments anyone? And what percentage are you doing this with? thanks,buddha

#6 phrith


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Posted 12 February 2003 - 05:48 PM

Damn - that Alex Witt has a way about her. As she recites the news that North Korea has nuclear missiles capable of reaching the western US, she stares at the camera with those smoky eyes like she's seducing whoever's on the viewing side - as if those are the sexiest words she could use to get our attention. "We are on the path of annhilation - are you turned on yet?" Perverse....
And that has what to do with the market? Sorry...

#7 wndysrf


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Posted 12 February 2003 - 05:52 PM


I'm going to this place in Inglewood tomorrow.

No, not a pawn shop. Looks like a big national bullion and coin dealer.

Starting with about 2%, will gradually accumulate to 10% - 15% of my liquid assets, and all of my non-stock market savings.

California Numismatics
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The Weimar Run: Bullphoria!!!!

#8 simple guy

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Posted 12 February 2003 - 06:03 PM

SG chimes in

Just want to add a few notes to Mark's great commentary

1. I agree on the gold stocks, bought some myself today

2. I dont think you will see any heatmap ramps on Scam week this time around...

3. The lack of volume to me is bearish, and scary if you are long... not short. The volume will pick up, but on the selling downside

4. I also wondered if the CIA is not behind some bullshit plot to paint this war picture nice this week. There are too many attempts to trump out the terrorist warning flags this week. THe sudden appearance of the tape and all the bullshit... to me, its all crap....

5. SG posted his SG Waves topic for the night just now, if anyone cares to read

SG Wednesday Night Takes

Tanks again Mark... your the best.... as is the STOOL

#9 simple guy

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Posted 12 February 2003 - 06:05 PM


Link here...

SG wednesday night takes

#10 machinehead


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Posted 12 February 2003 - 06:16 PM

Now there's political chatter about various forms of U.S. retaliation against France:

Scaramouches roar

We've come a long way from 1985, when the Plaza Hotel meeting resulted in internationally coordinated action on exchange rates.

The perception that nobody's in charge any more, and all the major players are working at cross purposes, is fueling the chaotic turbulent midair crack-up of financial markets. The world's more out of control than I can recall seeing it before. I don't object to anarchy, but government-managed anarchy is the worst of all possible worlds.
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
- our jickiss

#11 MrHanky


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Posted 12 February 2003 - 06:16 PM

ANAList thomASS mcMANASS on crapvision:

"you need to buy now when things look bad,you won't have a chance once the economy turns up"

he also said...."the fed is doing a great job"

I'm ready to go long after that pep talk!


#12 The End

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Posted 12 February 2003 - 06:19 PM

No change in position. Still short. May cover a wee bit at the 800ISH area for a little while (hours) :grin:

I see 750ish on the spx soon.

Don't pay any attention to me. I am stoolpid.
NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


#13 ConfusedAss


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Posted 12 February 2003 - 06:25 PM


Government managaged anything is an oxymoron. Unintended consequences are always greater than intended. :blink:

#14 crooked_analyst


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Posted 12 February 2003 - 06:27 PM

Tanks to you guys, I became a subscriber today. You all have made me trade safer and sleep better. ....Many, Many Tanks!

#15 Contrarius


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Posted 12 February 2003 - 06:27 PM

Thanks for your hard work. A must read every night.

More famous last words !!

“Recent evidence suggests that a recovery in at least some forms of high-tech investment is under way.”
Federal Reserve Chairman Alan Greenspan
April 17, 2002

“The economy, bolstered by a marked swing in inventory investment, is expanding at a significant pace.”
Federal Reserve Chairman Alan Greenspan
April 17, 2002

“Led by the United States and what the IMF termed as aggressive Federal Reserve policy easing in response to slower domestic and global growth and the Sept. 11 attacks, world output should recover to 2.8 percent for 2002 and expand to 4 percent in 2003”
April 18, 2002

“I believe we are going to see continued improvement throughout 2002. Productivity growth will stay strong, if not always at the 2001 fourth quarter's ... rate.'' By year-end, I expect U.S. gross domestic product to be approaching the 3 percent to 3.5 percent annual growth rate the U.S. economy can sustain.''
Treasury Secretary Paul O'Neill
March 26, 2002

“Stocks in many industries have been drawn down to levels at which firms will soon need to taper off their rate of liquidation, if they have not already done so. With production running well below sales, the lift to income and spending from the inevitable cessation of inventory liquidation could be significant.''
Fed Chairman Alan Greenspan
March 14, 2002

“Although there are ample reasons to be cautious about the economic outlook, the recuperative powers of the U.S. economy in the recent past have been encouraging. One important ingredient in that resilience has been the performance of productivity.”
Alan Greenspan, Federal Reserve Chairman
March 13, 2002

“As I have noted in recent testimony, in the past several months, we have seen increasing signs that some of the forces restraining the economy over the past year are starting to diminish and that activity is beginning to firm.”
Alan Greenspan, Federal Reserve Chairman
March 13, 2002

“It seems quite clear now that our economy never suffered a recession. Economic fundamentals are moving back into place in the United States and I predict growth rates will gradually increase this year to reach an annual rate of three to 3.5 percent a year by year-end. I believe that if it hadn't been for September 11, there wouldn't have been a recession at all."
Treasury Secretary Paul O'Neill
Mar 5, 2002

“One of the main forces that will lead to the recovery from this temporary slowdown is the confidence of businesses and households that, in the long run, the outlook for the U.S. economy is still bright. Despite our current problems, the fundamentals of this economy are strong.”
Federal Reserve Vice Chairman Roger W. Ferguson, Jr.
February 27, 2002

"The U.S. recession may be drawing to a close''
Alan Greenspan, Federal Reserve Chairman
Feb 27, 2002

“The 1st quarter is looking to be a good quarter. Sustenance for this expansion is likely to come in the 2nd quarter of this year, with capital spending rising noticeably.”
Lawrence Lindsey, Bush Administration Chief Economic Advisor.
Feb 21, 2002

“If the evident recent success of fiat money regimes falters, we may have to go back to seashells or oxen as our medium of exchange. In that unlikely event, I trust, the discount window of the Federal Reserve Bank of New York will have an adequate inventory of oxen.”
Federal Reserve Chairman Alan Greenspan
January 16, 2002

“Central bankers' success in containing inflation during the past two decades raises hopes that fiat money can be managed in a responsible way. This has been the case in the United States, and the dollar, despite many challenges to its status, remains the principal international currency.”
Federal Reserve Chairman Alan Greenspan
January 16, 2002

"Many districts indicate that their contacts believe a recovery will begin by mid-year or earlier, but the timing and strength are uncertain."
Fed Beige Book
Jan 16, 2002

“The U.S. economy is in a transition and appears headed for a recovery midyear 2002. Two-thousand three should be a much better year. I am comforted by some of the new data suggesting that a foundation is being put in place for a recovery. I'm much less concerned about deflation and stagnation.”
Philadelphia Federal Reserve Bank President Anthony Santomero
Jan 16, 2002

:lol: :lol: :lol: :lol: :lol: :lol:

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