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Yet Another Round Trip

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#1 wndysrf


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Posted 25 February 2003 - 05:27 PM

Mark’s Market Commentary – February 25, 2003

Today’s Wall Struck Journal had some interesting snippets today.

First of all, GE has decided to seek a buyer of its Financial Guaranty subsidiary. They are in the same business as MBI and ABK. Also on the block is its Life Reinsurance subsidiary. Immelt claims that he is “disposing slow growth” units.

Slow growth? We have just ended the most spectacular securitization bonanza of all time, where record loads of risk were stripped, packaged, and offloaded to the Pyramid Players.

Interesting on how this news comes on the back of FRE’s decision to take over servicing Conseco’s disasterous mobile home portfolio. Seems to me that the large Pyramid Players are finding that all this risk they offloaded hasn’t worked. So they are either disposing or acquiring assets to save their necks. GE is offloading a key bagholder, and Fannie Mae is acquiring a portfolio which is spiraling out of control because they have guaranteed a large portion of it.

We’ll have to keep an eye on all this hot potato swapping.

Over in South Korea, the government has clamped down on runaway consumer borrowing. Now they are paying the price:

“South Korea’s credit card companies and securities firms posted losses, as a slowing economy raised defaults by consumers and stock prices crumbled under geopolitical concerns.”

We’ll have to watch this scenario play out to see an example of what happens when the credit spigot is turned off.

Anybody see the new full page ad for Fidelity Rollover IRA?

“You choose when you plan to retire. We’ll do the rest. Just select the fund closest to the date you plan to retire. Expert money managers will make the investment decisions for you.”

Think that 6000 mutual funds are enough? Fidelity just came up with 5 more new ones:

Fidelity Freedom 2010 Fund

Not much time left. No choice but to HeatMap the fastest moving stocks daily. Expect gigantic expenses and trading commissions. Seeking to hit the home run by finding the next Microsoft.

Fidelity Freedom 2020 Fund

A little more time to build a nest egg here. Invests exclusively in the Semiconductor Index. All dips are bought. No rallies are ever sold. Plan to ride into the next New Bull Market.

Fidelity Freedom 2030 Fund

More time allowed. Invests only in growth stocks. Value stocks are to be ignored at all costs.

Fidelity Freedom 2040 Fund

Lots of time. Buy and hold index funds only.

Fidelity Freedom Income Fund

For the youngest investors only. Basically a Hedge Fund which invests exclusively in options. Uses extreme leverage. Trading plan is to hit the Hail Mary touchdown passes.

More money continues to pile into the never ending cult of equities. Any more questions about why the bear market refuses to wash out?

Now, looking at more insider selling activity:

Looks like Bill Gates offloaded 2 million shares ($48 billion) on February 3. A Starbucks director offloaded $9 million on Feb. 3. More selling from QCOM, EXPE, and MXIM. But most interesting was some offloading by Sallie Mae (SLM).

Today’s Action

We gapped down on the open and slid to new lows for the session. But guess what? Billions of eyeballs reading the same charts looked at the 5-day island top failure and shorted on the open. In the meantime, Da Boyz were buying. When the sellers failed to build more volume to swamp the dippers and Da Boyz, we started moving up. Then of course, the high anxiety consolidation turned into a hysterical short squeeze with ended up at new highs of the day.

What else is new?

What else would you expect when so many gamers are reading the same charts in real time?

And remember, it’s the end of the month, so borrowed Bank of America Prime Brokerage credit lines are going to be tapped to jam the tape the next few days into the next turn date on Friday.

Good news for swing traders is that we made a lower low on higher volume. Therefore, the downtrend has now been confirmed to be in gear.

Notice that the Supermodels were pulling on their bra straps all day, but couldn’t really get things going. Rick Hill at NVLS will be offering up his choice words on Thursday. Imagine having the power to create or destroy billions of market cap in less than 5 minutes on a conference call.

We’ll have to wait and see how much cash is left lying around to run the tape. Maria was barfing about some type of “asset allocation Program Robot buying” today.

Could be. But I doubt it. Looked like a combination of HedgeHog short covering, end of month Tape Jamming, and Al Green futures spiking to me.
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#2 PileDriver


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Posted 25 February 2003 - 05:39 PM

Just ST noise in the downward sloping trading range (a.k.a. "slope-of-hope")

Staying 200% short, up 25% since 1/23/03, 0% change today :D

P.S. Afterburner Hours getting spanked. The beat goes on...

#3 Sphinxter


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Posted 25 February 2003 - 05:44 PM

Early morning explanation for the diving stocks (prior to the ever-so predictable 10:00 bounce): "Investors war worries weigh on stocks".

Then the second biggest one month plunge in consumer confidence is announced (14.8 points down!) since April 1980 and nary a peep from the crap vision commentators and nary a budge in the indexes. Clearly this kind of news is irrelevant.

Late afternoon explanation for the monster rally: "a move experts credited to bargain hunting". ;)

We certainly do live in interesting times....

#4 MrHanky


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Posted 25 February 2003 - 05:48 PM

I think fleck was right when he said"I don't want to be long or short right now"

neither do I

Hysterical ticks again today with lots of +1100,+1200 and higher ticks,huge reversals in hd,ge,intc,yhoo,amgn and lots of others with increasing volume on some.If we rally on the crappy hpq news tomorrow,it could get rough for the bears.

News is being ignored,horrible consumer #'s this morning.Only a devistating event will bring the market down it seems,every dip being bought harder each day.I wonder if charts even matter anymore,since pe's surely do not.I would not rule out a 10% move either way right now,even though down is more likely.It just seems that the sellers have been exausted to a point.

It looks like a down move coming after hpq news,but who the hell knows what is in store tomorrow.I'm flat for now.


#5 purdymouth


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Posted 25 February 2003 - 05:50 PM

Comet Neat will wipe out all excesses.
:lol: :o :blink: :huh: :unsure: :ph34r:

#6 bubbadropping


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Posted 25 February 2003 - 05:50 PM

Back from the yoga cave I look at the intraday action and just see a circus of freakish price jamming and short covering. One of the reasons has to be that brokerage housing criminals are figuring daytrading profits as a major part of their operation now. Who knows? It seems they pile in on every possible short term double bottom in what they calculate is a low risk op to book a day's work. Along with this I don't doubt at all that they are manning the bullhorns and disseminating all kinds of false information about the coming War, earnings reports,etc. Why should they bother with trying to do anything other than heat map every other day off short term Dover Sole indicators? There is zero political stability in the world now thanks in large part to the stellar leadership in Washington. Since leadership only thinks short term why on earth should anyone else plan for the future? Besides daytrading off double bottoms intraday is backed now by the full faith of the Federal Government and the remarkable 'resilience' of Al Green. I seriously doubt we see any waterfall selling whatsoever without the aid and comfort of a Sigma 10 event. No way. Sorry Elliot. Take a walk back to that rooming house your crashing at in New Jersey. Its nice to imagine but this will be Bear that completely rewrites all the texts. The way it slides will be more Joe Dimaggio doing the Mr Coffee drip drip drip and then throw back a shot.

#7 Hypertiger


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Posted 25 February 2003 - 06:00 PM

The milking operation continues... I remember a time when "Jams" were monthly or weekly affairs now they are happening on a daily basis...

Jams are just debts...

Non productive debts which add weakness to the system everytime...

When will it crack? 14-19 months is all that is left to make your millions...

Unless you get milked with the rest of the victims... On the day it does crack that will be the final milking... The screens will go blank and when they come back on you will be wiped out...

You have to realize money/capital is debt the Federal reserve owns all this debt it belongs to them it does not belong to you... You are just renting it... if you want more money/ debt you have to either borrow to pay the rent or steal...

Time to start getting diabolical and start stealing... get all the credit cards you can, max them out buying physical gold and silver, it's what the smart money is doing... just look at the gold market...
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...

#8 machinehead


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Posted 25 February 2003 - 06:06 PM

This chart is not yet updated to show today's Conference Board con-con reading of 64 (blue line).

Posted Image

- chart courtesy of http://www.martincapital.com

However, previous bottoms below 60 in 1974, 1980, 1982 and 1990 were good cyclical buys.

We don't know exactly "how low is low." But con-con is getting into the range where it may soon signify a market that's "f'd up enough to buy."
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#9 phatbubble


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Posted 25 February 2003 - 06:06 PM

according to my calculations, the jam-adjusted SPX is now trading at -145.67. i see possible support around -185, but expect that we may break -220 or even -250 before a significant IT bottom.
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You haven't answered my question.
Quite right. Interesting. That was quicker than the others.


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Posted 25 February 2003 - 06:18 PM

Anyone looking to buy GG here? Looks interesting now.

#11 DICK BUTTkus


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Posted 25 February 2003 - 06:23 PM

. . . Only a devistating event will bring the market down it seems,every dip being bought harder each day. . .

Here's something to ponder: if the market has so much psychological importance, "they" may prop it up in the face of all disasters. It could be the last thing to go. Wouldn't that be a kick!

#12 soup


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Posted 25 February 2003 - 06:25 PM

machine: agree, only one element missing, PRICE. WHen the spx have a 500 handle and we have seen panic selling , that will be the time. A lot of things starting to fallinto place, yuet we must wait for capitulation and price.
""Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory. Yet our high level bureaucrats, led by Alan Greenspan, exhort all Americans to consume still more of their seed corn and seek still more fools." N. Hultberg

#13 realist


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Posted 25 February 2003 - 06:33 PM

The Casino Is Rigged.

We already know that! :lol:


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Posted 25 February 2003 - 06:46 PM

Tick-Tock-Tick-Tock- A stockbroker will soon be shot

#15 buttugly


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Posted 25 February 2003 - 06:56 PM

Machinehead: Nice chart, although I respectfully disagree
with your tentative conclusion.

The 1990s saw consumer confidence at unprecedented levels,
so I think a quick 1990/91 style rebound is unlikely.

The issues Wndy raised about GE and FNM are ominous signs
for the credit markets - read Noland's Friday piece.

"According to a recent study by TimesSquare Capital Management…
‘a number of major housing markets are vulnerable to severe
price declines, due to a troublesome combination of
above-average appreciation in recent years and
growing unemployment.’ The study highlights a number of
metropolitan areas that have experienced higher home price
rates from the first quarter of 1997 to the third quarter of 2002
that were well above the national average of 42%.
For example, New York City home prices rose 67% in
that period, Jersey City, N.J., increased 75%, Boston, 69%
and San Francisco, 88%"

Once property rolls over we are really in trouble!
Even my wife might stop spending :blink:

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