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#1 wndysrf

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Posted 10 October 2003 - 03:16 PM

Note: No commentary on Monday. Surfs up for Columbus Day.

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

First, we'll add a few more to the Glossary:

HedgeHog – Hedge Fund Managers. Fumble Managers on steroids, able to game stocks, options, and other exotica without the usual restrictions. Biggest users of proprietary Black Box trading computers, which spit out buy and sell orders, which in turn are e-mailed to 22-year old X-Box gamers, fastest ones to pull off lightening executions.

Hysteria – Typical mood of stock market speculators once they see the pre-programmed Repo Robot Buy Orders hit the OEX futures pits, excecuting the Steve McQueen “Bullitt” U-Turn on the tape.

Jamming – Short squeeze technique used by market makers. Giant block bids are fed to the Level II, 50 cents higher than the last bid, only to be withdrawn quickly. Similar to holding a fresh meatball on a stick, 3 inches from the greyhound’s nose on a racetrack. Favorite technique used by Fumble Managers to drive prices higher at the end of month for the statement print.

Joe Sixpack – Primary engine of global growth. Your regular middle class working class guy refinancing his house and maxxing out his credit cards, using all proceeds to spend on durable goods. Also the prime feeder mechanism for the mutual fund complex, as his 401 (k) contributions are blindly thrown into the market at the end of each month, eventually falling into the hands of a Fumble Manager who uses his cash to HeatMap the top percentage gainer on the Nasdaq 100.

JPM – JP Morgan Chase, the largest creator and holder of Derivative Exotica. Also rumored to be the largest short seller of gold. One of the top three Matrix Institutions. Balance sheet is leveraged 700 to 1, thereby its nickname: the 700-Story JPM Derivatives Pyramid. Most important stock on the NYSE. Protected from failure at all costs. Too big to fail, therefore always rescued when its stock plummets.

Large Breasted Wonders – The three largest and most actively traded Semiconductor Equipment stocks: AMAT, KLAC, NVLS. Most heavily Riverboated stocks on the Nasdaq. Fumble Managers continue to have wet dreams of the parabolic rise in these three during 1999- 2000, assuming the same will happen as these stocks “lead an economic recovery”. Typically trade at outlandish multiples, since they have had Hockey Stick 2nd half earnings estimates for 3 years in a row.

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

From today’s Wall Struck Journal:

“OTC Trading Surges as Speculation Makes a Comeback”

At a time when technology stocks are climbing and day trading is back, now comes a sign that froth is returning to the stock market” A record surge in trading of OTC Bulletin Board shares.

After bottoming at 10 billion shares last October, trading volume gradually doubled to 20 billion this summer. Volume went parabolic in September, with volume surging to 41 billion in Setember, surpassing for the first time the number of stocks traded on the Nasdaq, where 40 billion traded last month, and the NYSE, where 29 billion shares traded.

The furious trading in what is the market’s wild frontier has turned heads on Wall Street. “Speculation is alive and well again”, says Kevin Dann, managing partner of Kevin Dann & Partners LLC, a New York brokerage firm.

The last time trading of Bulletin Board shares cam close to matching those of the Nasdaq was in March 2000.

Wednesday’s most heavily traded Bulletin Board stock was iVoice, Inc. (IVOC), a maker of voice computer systems. The company has 11 employees, makes no money, and its stock trades at less than a penny a share. Yet 178 million shares traded on Thursday.


Editor's note: One day in September, over 1 billion shares traded on this stock in a single session.

Advanced Optics Electronics, Inc. (ADOT) saw 550 million shares traded on Tuesday and 176 million shares traded on Wednesday, as the electro-optic company barely cleared a high of 1 cent per share.

Jerome Mahoney, chief executive officer of IVOC, says he has no idea why investors were trading his compay so furiously. “Why there is so much trading, I couldn’t tell you,” he said. “We don’t know when we will turn a profit. We never tell anyone” that a profit is around the corner.

Leslie Robbins, EVP at ADOT said he believes that his company’s stock has been trading on the news that Biomoda, an early lung cancer detection company may soon begin trading on the Bulletin Board. ADOT has a 30% stake in Biomoda.


Editor's Note: HeapMappers picked up on the stock today, which was up 90% on over 500 million shares traded intraday. The stock has now risen 266% in 3 days, to an intraday high of 2.4 cents a share.

…………………………………..

I’m waiting for the report showing the volume of trading in various Financial Exotica:

- Stock market options
- Index futures
- Economic data futures
- Bets made on foreign currency, bond, and indexes in obscure markets.

Mortgage backed securities outstanding now exceeds the entire T-Bone market. How many interest rate swaps and hedges are on the books now? What did the volume of these contracts look like last July?

How about Structured Exotica? Now that all consumer credit risk has been traded off and eliminated, how many credit default swaps are sitting around? Who are the bagholders? What has been the volume of trades in this product during the last 5 years of this Securitization Bonanza? Imagine the volume of trading when default rates start accelerating. Or maybe there won’t be any trades at all because there will be a lack of buyers of credit risk when everyone decides to offload.


Enter Southhampton Special Situations Hedge Partners, LLC.

Ron Insana:

“So what bets are you making these days?”

HedgeHog:

“We have a myriad of trades going on simultaneously, guaranteed to make a profit regardless of where the markets go.

“We are long the Indonesian Rupee and short Pakistani Bonds. Straddled with some U.S. GDP longs and Unemployment Index shorts.”

“We are borrowing at LIBOR + .75 and SpreadTrading into high yield Breast Implant Master Trust IV, Series III, which yields 8.6%. We are using 5 to 1 leverage on the trade, so to protect ourselves, we bought some credit insurance for 18 b.p. a year, hedged off with some LEAPS on Household International.”

“We are also massively long the homebuilders and mortgage companies, hedged off by puts on the Fed Funds futures, collared by a long on lumber futures and a short on the ISM Index.”

“We have been making massive cash flows, although they tend to be irregular. So the short term spike cash proceeds are usually HeatMapped into the Nasdaq leaderboard, with a trade horizon of no longer than 3 days.”

Ron Insana:

“You have lots of positions open. Aren’t you worried about the complexity of unwinding these trades if there is a terrorist attack or if Alan Greenspan slumps at his desk from a stroke?”

HedgeHog:

“No. The brilliance of our trading plan is that none of these trades are actually conceived or executed by humans. We have a Program Robot that automatically determines the most profitable arbitrages, places the trades at the precise intervals, and maintains the tightest of stop losses on each trade. Its called The Millenium Robot Trading System. We paid Merrill Lynch $1,500,000 for the program this year, and they also get 5 cents a trade in commission. Actually, we never go into our office. This Program Robot thing is a money machine which works on autopilot. While we play golf during the day and chase Russian Escorts at night, it churns out profits. Merrill loves us, and they have given us box seat tickets to the World Series.”

Ron Insana:

“Are you guys hiring?”
PigMen Proprietary Trading Desk

The Weimar Run: Bullphoria!!!!

#2 DrStool

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Posted 10 October 2003 - 04:09 PM

Boooring

But Collapse Countdown Continues

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#3 DrStool

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Posted 10 October 2003 - 04:10 PM

Buck Comes Down

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#4 machinehead

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Posted 10 October 2003 - 04:12 PM

"Are you guys hiring?" :lol:

1. SPX closed below 1040 again. Seventh successful daily test.

2. Nov. crude made a new breakout high at $32.60; closed near $32 even.

3. VXO (old VIX) closed under 20 for the fourth time this week.

Mr. Marke is floating blissfully in a warm, dark sensory deprivation tank. But when he finally emerges blinking into the 'real world,' he's gonna learn that some bad shit has gone down while he was tuned out.
"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

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#5 Guest_bullseatshitndie_*

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Posted 10 October 2003 - 04:15 PM

that es close was insane. 1.75 off highs

#6 DrStool

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Posted 10 October 2003 - 04:17 PM

This weekend is the Jewish holiday of Sukkot, which has always been Doc's favorite holiday.

Because, of course, Sukkot spelled backwards is

Tokkus.

I know, I know, that's not how you spell it. But it sounds the same when you sit on it, or say it.

Like, "Wow did you see the tokkus on that?"

:lol: :lol: :lol:

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#7 BarBu

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Posted 10 October 2003 - 04:26 PM

Boooring

But Collapse Countdown Continues


Check Point:

(1) Check Brake
(2) No rest area next 99 miles
(3) One way, no U turn
(4) Many many Posted Image (moves from Alaska)

Attached Images

  • bull.jpg


#8 AgentSmith

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Posted 10 October 2003 - 04:31 PM

Lots of charts looking like bump & run?

Posted Image

#9 crooked_analyst

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Posted 10 October 2003 - 04:33 PM

Mark,

How about a challenge....instead of not writing on Monday, why not write Monday's trading outcome before it occurs....we'll compare your narrative to the actual outcome....

#10 Ags Nightmare

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Posted 10 October 2003 - 04:37 PM

Brilliant work wndy.

The similarities to March 2000 are surreal. Scanning the after hours trades and I strated thinking, who in their right mind would find a stock selling at 60 or 70 trading at 20 times sales so irresitable they just had to take home 100 shares for the weekend after a 2000 % run. Same pattern. Trash rules DOW lags.

Short seller flashbacks have to be occurring now. The kind of flashbacks you have when you take on a position and have literraly 10 seconds before you get stopped out or your trade or your out of the money poots go from 3 to zero in 10 minutes of breathless closing activity.

I have no clue how far they take this. Crapvision today declared this the one year "birthday" of the "new bull market" so expect some new metrics to be invented shortly to justify prices.

As for shorting I won't even consider it until I see a panic on the tape thats well underway. Trying to bite off the upper third of down moves in some of the stinkier screamers is now my plan. There are going to be some spectacular wipe outs when this pukes.

As for riverboating ? I like Mousey's strategy or Thors where you get familiar with a pattern and abuse the sheet out of it.
Far less complicating.

I will say this, if there ever was a set up for one massive dislocating waterfall, we have it in place.

Ag
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Posted 10 October 2003 - 04:40 PM

Another great epistle today Mark!

Deer In The Headlights

Today, the Matrix Players froze like deer in the headlights...with all eyes on the 1040 level for either a sign of confirmation that the break out was for real or a sign that the action yesterday was a blow-off top. While no one pushed the panic button (yet), the blowoff-top scenario seems to be winning the debate, and causing a buyer's strike - at least for now. With event risk over the weekend as a constant thorn in bullie's side, combined with the disappointment today from GE (the real economy), and no shorts left in the market to speak of...those with their profits left sitting on the table will sleep less comfortably tonight.

Today, the airlines and the furniture manufacturers were taken to the woodshed, while energies and commodities rose. As for the bonner move on CFC, the analcyst that came out with the upgrade on it today just happens to own 1% of the shares...or at least he did until he sold them with both hands at the high today. A reversal on that one could be breathtaking.

Watch the homebuilders, HD, HHH and AMAT next week to see what's real. The QQQ closed up today because, as Mark has pointed out - that's the parking lot for the chips when the boys get nervous. When you see the big sell orders hit the Qs, those exits are going to look mighty tight. It could have happened today, or any day, or never...but it sure feels like the calm before the perfect-storm.

Best wishes to you and your family, Doc...
Plunger

#12 purdymouth

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Posted 10 October 2003 - 04:45 PM

Gas prices set to triple this winter, say anal cysts

#13 Tonto

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Posted 10 October 2003 - 04:52 PM

Brilliant work wndy.

The similarities to March 2000 are surreal. Scanning the after hours trades and I strated thinking, who in their right mind would find a stock selling at 60 or 70 trading at 20 times sales so irresitable they just had to take home 100 shares for the weekend after a 2000 % run. Same pattern. Trash rules DOW lags.

Short seller flashbacks have to be occurring now. The kind of flashbacks you have when you take on a position and have literraly 10 seconds before you get stopped out or your trade or your out of the money poots go from 3 to zero in 10 minutes of breathless closing activity.

I have no clue how far they take this. Crapvision today declared this the one year "birthday" of the "new bull market" so expect some new metrics to be invented shortly to justify prices.

As for shorting I won't even consider it until I see a panic on the tape thats well underway. Trying to bite off the upper third of down moves in some of the stinkier screamers is now my plan. There are going to be some spectacular wipe outs when this pukes.

As for riverboating ? I like Mousey's strategy or Thors where you get familiar with a pattern and abuse the sheet out of it.
Far less complicating.

I will say this, if there ever was a set up for one massive dislocating waterfall, we have it in place.

Ag

We need a future bankruptcy thread....I think GE and CA were nominated today! Well.....CA maybe. I think the "symbol of freedom" stock will live on

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Posted 10 October 2003 - 04:54 PM

Anotherone,

Thought you astro guys would be interested in this.

Stars may align badly for stocks next week
'Market astrologer' sees possible repeat of 1987 crash

http://aolpf5.market...7D&siteid=aolpf

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Posted 10 October 2003 - 05:07 PM

Speaking of chips et. al., Intel, Motorola and Novellus report on Tuesday. Queerlogic, Siebel and Sand Dick on Wednesday (as well as Doc's favorite, American Standard :grin: ), "Mousey's favorite exotic lap dancer" XLNX, Advanced Micro and Broadscum on Turdsday and well. . . a cast of thousands throughout the week.

It' goin' to be Spin City.





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