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HedgeHogs Grassoed


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#1 wndysrf

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Posted 19 September 2003 - 03:18 PM

No glossary update this week.

Due to the recent hysteria, I thought it would be appropriate to cite an article written today in The Wall Struck Journal by Gregory Zuckerman.

"Hedge Fund Managers Throwing in the Towel"

For much of the year, managers of large hedge funds have been bearish on tech stocks. The hedgies dismissed rising profits as nothing more than a result of cost cutting, and even those profits didn't justify bloated stock prices.

Due to this stance, the average hedge fund is only up 9% this year, compared to the Nasdaq's 43% gain.

Now they are trying to stage a late year comeback by covering their shorts and going long on tech stocks. A recent survey from International Strategy & Investment shows hedge fund managers bullish on the market as they have been at any time the past year.

Overall, short interest on Nasdaq has fallen to its lowest levels since May.

Many of the savviest hedge fund managers are convinced stocks are overpriced. But these investors can't take the pain any more, so they are taking their bearish bets off.


That pretty much sums it up.

There will be a point when all the HedgeHogs realize that gaming the upside contains no risk, and all of them decide to become Mo-Mo Monkeys until the market runs out of gas.

And of course, all will have their hand on the Panic Button if the market turns, but will be ready to hit the Program Buy Button if the "indescriminate futures buying" appears out of nowhere.

Due to the extraordinary accomodations now provided by Merrill, Goldman, Lehman, Citi, Bank of America, with plump balance sheets full of cheap Repo Money ready to lend out, these Mo-Mo Monkeys will be grabbing every dime of credit they can in order to "catch up" on the long side to make up for the short selling blunders.

Eventually, Full Maxxout will be reached, and then the 10 Sigma Market Clearing Event will hit.

That seems to be the way Mr. Market likes to take everyone's money.

If not, then exhaustion will be able to be spotted when Mo-Mo Breakouts start U-Turning Steve McQueen style, as the supply of profit taking sellers starts to overwhelm the demand from breakout buying chasers.

A possible example from today is Federal Express (FDX).
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#2 Stoolander

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Posted 19 September 2003 - 04:07 PM

Is the VIX telling us something? OPEX might have influenced it a bit but it closes at the lows for the week.

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#3 wndysrf

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Posted 19 September 2003 - 04:09 PM

Slide the decimal over to the right, or add another zero.

Future chart of HUI.

Don't sell.

Soup, you got that???

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#4 DrStool

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Posted 19 September 2003 - 04:14 PM

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#5 Farmer

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Posted 19 September 2003 - 04:14 PM

Doc , to the best of my recollection. No one has been claiming to be sane..... :huh:

#6 machinehead

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Posted 19 September 2003 - 04:15 PM

Is the VIX telling us something?  OPEX might have influenced it a bit but it closes at the lows for the week.

You might be onto something, Stoolander.

VIX managed four consecutive sub-20 closes in August. It did so again in early September.

Today was the third sequence of four sub-20 closes. It's like holding a beach ball underwater ... it wants to pop up. :P
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#7 wndysrf

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Posted 19 September 2003 - 04:15 PM

H-P authorizes $1 billion for stock buybacks (HPQ) by Rex Crum

SAN FRANCISCO (CBS.MW) -- Hewlett-Packard (HPQ) said Friday it had authorized $1 billion to be used to buy back company stock at future dates. H-P said it intends to used the authorization to continue with normally planned share repurchases and other buybacks as needed. H-P shares rose 18 cents to close at $21.15

....................................

Carly:

Please save the $1 billion. Or use it to buy Inamed stock, which is currently enjoying the Secular Bull Market in breast implants.

Or better off, use the money to buy some boobs for yourself.

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#8 anotherone

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Posted 19 September 2003 - 04:18 PM

Now they are trying to stage a late year comeback by covering their shorts and going long on tech stocks. A recent survey from International Strategy & Investment shows hedge fund managers bullish on the market as they have been at any time the past year.

Overall, short interest on Nasdaq has fallen to its lowest levels since May.

Cool.

Ca-pit-u-la-tion,
Ca-pit-u-la-tion,
It's making me wait...
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#9 DrStool

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Posted 19 September 2003 - 04:19 PM

Many of the savviest hedge fund managers are convinced stocks are overpriced. But these investors can't take the pain any more, so they are taking their bearish bets off.



Here's the thing. "taking off their bearish bets."

Now, how do they do that?

By buying, of course.

That's what has driven this rally. Nothing more.

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#10 Stoolander

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Posted 19 September 2003 - 04:24 PM

I'd need to see a print below 1015 before I'd start thinking the bears have gained control of the steering wheel.

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#11 The End

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Posted 19 September 2003 - 04:24 PM

Still SHORT!

Covered longs on ALKS from 12 at 14.59. :wink2:

Covered longs on PLNR from 20ish at 22.40. :wink2:

INKP?... shhhhh. (Not a reco). Do your own DD.

None of what I say, ever, should be taken as advice.

Have a great weak-end stoolies.



Hp buy back at future dates. yeah when it hits $3. :lol:
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.


--Waters

#12 Guest_Icky Twerp_*

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Posted 19 September 2003 - 04:24 PM

If this is really stupid, sorry.

Don't hedgehogs use options? And wouldn't taking off puts and putting on calls be a wash? It's still a mystery to me where the liquidity for this rally has come from.

#13 Stoolander

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Posted 19 September 2003 - 04:28 PM

You might be onto something, Stoolander.

VIX managed four consecutive sub-20 closes in August. It did so again in early September.

Today was the third sequence of four sub-20 closes. It's like holding a beach ball underwater ... it wants to pop up.  :P

Actually I was looking at a divergence indicating a possible new high in the indices is on the way. :o

That's the fun of divergences, the trick is to figure out which is telling the truth.

#14 mjkst27

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Posted 19 September 2003 - 04:33 PM

H-P authorizes $1 billion for stock buybacks (HPQ) by Rex Crum

SAN FRANCISCO (CBS.MW) -- Hewlett-Packard (HPQ) said Friday it had authorized $1 billion to be used to buy back company stock at future dates. H-P said it intends to used the authorization to continue with normally planned share repurchases and other buybacks as needed. H-P shares rose 18 cents to close at $21.15

this is really bad news for bears

#15

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Posted 19 September 2003 - 04:33 PM

"Due to government office closings in Washington as a result of hurricane
Isabel the CFTC has decided to release the COT report scheduled for
9/19/03 on either 9/22 or 9/23."





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