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#1 wndysrf


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Posted 24 December 2002 - 02:39 PM

Mark’s Market Commentary – December 24, 2002

Thanks to all Stool Pigeons, RiverBoaters, Gamblers, and Supermodel Addicts for supporting Mark To Market this year.

Happy Holidays to all.

Next year will be a better year for all of us, since Mark To Market will attempt to identify bounce opportunities rather than suffer through the relentless short squeezing. My apologies to all who suffered round trips on their short positions by watching their leader suffer through squeezes on the likes of PNRA and EXPE.

Now to the action.

It appears that the ride may be over for the banks.

Yet another sector which has repeatedly failed to break down during the “recession”, based on the belief that a “recovery” was imminent. Of course, we have all seen the troubled loan rollovers, as the big banks refuse to let anyone go into bankruptcy. Instead, matured loan agreements with material covenant breaches are miraculously “restructured” or “renewed” into some other facility, pushing out the inevitable.

Yet another bad decision made on faith.

Faith in Al Green.

Faith in the 700-story JPM Derivatives Pyramid.

Faith in MBI and ABK.

Faith in the Hillbilly Credit Club, hoping that one member doesn’t suddenly decide to “turn” on his buddies.

In the old days, the banks used to push stressed borrowers against the wall and force them to sell assets or move the loans over to Michael Milken’s shop. But now the leveraged borrowers have no place to go, and too many loans are “too big” to force into default or liquidation. So the banks simply roll over the loans, scrape in new loan fees and restructuring fees, and add them to the income statement to provide the outside world with the illusion of “continued profitability” and “proper risk management”, and “growth in consumer lending”.

Yesterday’s announcements by B of A and Citigroup of some unexpected “loan problems” might be a sign of another top on this group.

Today’s The Wall Street Journal reported “souring loans in the energy, retailing, cable and media, telecommunications, and airline industries” supported by “old-fashioned consumer banking activities like mortgages and credit cards.”

“Bank of America declined to identify the clients unable to pay their loans. Still in question is whether and when Bank of America will have to record a charge for loans made to Conseco executives, used to buy shares which are now worthless.”

Bank of America’s CFO “declined to comment”.

Now we will see if these restructured loans to the power companies, energy traders, telecoms, etc. will survive. And we will see if the consumer survives. If they don’t then its more pain for the banks.

Since the rest of the year is likely to be slow, and the thin volume will make trading futile, I will be celebrating an end of Bear Market Year No. 3 by introducing the “Best of the Color Commentator”. These are some of Buddha’s market observations prior to his postings here at Mark To Market.

Remember the May Madness Bounce? Here’ Buddha’s account of the days immediately preceding it:

“CSCO ultimately must continue to suffer the same fate as the spectacular collapses of so many of the other former leaders. It is the Way of the Bear. Nothing escapes It. Several mentioned over a year ago that anal cysts and media would tout the pop Queens after every ledge down and them turn on them in a fury near the very bottom. We are seeing this now, the event catalyst being accounting scandal, the aftermath of WorldCom and GX and the investigation of Broker Crookery. I suspect some of these companies will just be hoovered up at the end by a few of the larger survivors but none of them will return to even approached the old glory days, way too much overhead supply, massive distrust for that, and contracting slower growth economic conditions.”

“Anyone who wants to 'play' Telecom because its so beaten down had best do so with very tight stops. I have steadily likened the Great Bear to a bouncing rubber ball thrown down hard onto a cement pavement. The first half a dozen snap back bounces are violent and profitable for the quick, but eventually the ball loses all potential energy and just dribbles its momentum away pitifully at the very bottom like a 90-yr. old guy with a prostate the size of a basketball. The days of dramatic bounces in these savaged sectors I believe are now over, its too late, those arriving to the bounce party hoping for shades of 2000 and 2001 have completely missed the point, the last leg down of the Bear once again morphs into something entirely different. At this point we are talking about 'going out of Business' shingles, buyouts, company implosions, scandal, CEO resignations, suicides and indictments.”

“This is no time to 'pick a bottom', it is certainly a time to short any big sector bounce in Telecom aggressively if it were to happen. JDSU may just go out of business. WCOM with its level of $30 billion in debt and making nothing in the doomed long distance market may do the same. All the Kings Must Die, to paraphrase Mary Renault. It is the way of all powerful Bears, it is nothing new under the Sun.”

“Bottom Pickers once again overwhelmed by sheer force of collapsing descending triangle, minimum target on this now that it has been observed and heeded by Pavlovian traders is 1500 area. Intraday support and resistance must bow to weight of daily chart methinks. Ferocious Crack bounce coming soon enough but not when buying volume is poor and TRIN is high, no chart can overcome that. Erudite and Wise and Adventurous Proctologists who entered Market on Friday 'go signal' may have checked into Proctology Convention a few days early, who can say. If we get a Pavlovian sell anywhere near 1500 we might get a turnaround Tuesday event after the grandmaster speaks his drivel, but to gamble and call the day before it arrives is fools play imamateur opinion.”

“QLGC is down nearly 4 points running into 'earnings'. Is that a first or what? Usually its up 4 points into earnings. Gee I wonder if that was the CEO I just saw out back behind the dumpster unloading truckloads of the issue into Lake Michigan before the report?”

“Pretty good volume selling of QLGC right at the open. Does someone know something that we don't about the up and coming report? Gee that would be unfair wouldn't it? Against the rules. A violation of the SEC. That sort of behavior is just unheard of in this day and age, after all we are not talking about cattle dealing in Chicago in the 1870s are we? QLGC CEO seen checking into JFK airport behind false beard and plastic Halloween hooked nose. Made reservations for the overnight to Katmandu and carrying several large leather suitcases with green paper sticking out thru cracks. Probably some serious laundry to do over the coming weekend once all the hullaballoo dies down. Good luck to all. Watch wallet at all times, Wall Street Hoods and Bosses in top form these days.”

Then of course, Chambers comes out with his “beat by two pennies” news, which sent the afterhours into a bottlerocket move. Literally, all “broken” stocks were “fixed” the next morning. Especially Buddha’s favorite stock, QLGC.

“Short sellers found unconscious behind dumpster in back alley last night. Rolled by Robert Downey Jr. after supplier pimp Chambers slid up in stretch limo to toss a dime bag out window. Such is the fate of gamblers. Rule no. 1 is never long or short a stock before its earnings announcement, odds are better in Vegas. Never call Chamber's bluff, he is the master spinmeister. I thank him for his call. Many now actually think the bottom is in. Shorts must be patient and simply reset for BRCD, BRCM, MERQ, QCOM, BBH etc. all the usual suspects. It’s all or nothing in this market. I will be doing most of my buying and selling after hours from now on. Why? The Market is constantly looking for ways to buy or sell ahead of the crowd. If you didn't get in last night off the Ecstasy Rally started by CSCO the risk/reward was just poor by the open. Only glad I covered most all shorts at close as I do daily now, anything else is just rank guessing.”

“Just never ceases to amaze how gullible people are and how they absolutely love to chase stocks, so do I, its a mistake that takes years to learn not to do. Chambers is the most obvious of the spin merchants but what the hay, he creates volatility and opportunity for traders, I really don't think any savvy professional people beleive a word that came out of his mouth but they know its money in the bank tradeable for a significant bounce. If one can merely accept the madness and not attach emotionally to the swings one can really do well in this thing, if one gets caught up in the justice of it or where these things belong,etc. one sets up for heavy loss and agony. Key is emotional detachment and to that end, a sense of humor is very helpful. I mean really, look at the swings and tell me these are adults buying and selling this junk. Really? Bunch of very funny children playing the greed game.”

“Patient in full blown acting out mode. Robert Downey Jr. loose on Culver City streets. Excellent and classic chasing the train bear rally to resistance. Give rally one to two more days off hype and media madness, then begin to average in to shorts again. Bios in manic mode after serious 2 month depression. Dosages of Prozac and Zoloft have been upped considerably with little effect. Patient due to crash once again after manic high. It is the way of things. Perhaps best trading strategy these days is to trade after hours off bull manure spin reports like Chamber of Horrors that continue all the way down to fool most hapless investors. Yes,I know, the bottom is finally in again for the 138th time. When will humans ever learn? Never. NasGap demonstrating that it is the biggest 6 year old manic depressive child in the business.”

“QLGC is trading beyond 50 times earnings. A nice little stock but please. Have any lessons been learned from the Great Bear? Not really. Not until the end. Either that or this is just hedge funds playing around with the stock like a cat with a mouse. Who knows? Unfortunately best way to trade the Comp is to prey upon the sheer ignorance and greed of the majority of its participants. Fading all of these hysterical bear rallies is money in the bank if one is very patient and keeps a cool head. Patience is all and buying Crack stocks after hours off bogus spin to satisfy addiction levels.”

“I can already see the headlines in Investor's Daily. The Master of all Bottom Picking Whipsawyers Himself, Bill O'Neill will pull out his slide rule tonight and have everyone climbing in at the top again in a couple of days after this 'accumulation' day. If you can call the massive short covering of garbage stocks 'accumulation' I suppose he’s right, but he has so lagged the action for so long he’s like an Octegenarian running the 100 meters in the 2000 Summer Olympics with his shorts slowly sliding down to his knees. The herd loves his journal. I used to read it regularly until I realized he was trying to fly an F-18 without radar using only a rear view mirror over the throttle. I remember well how he called the End of the Bear in April of 2001 off 3 accumulation days. A true Prozac moment.”

“Coming to a theatre near you, all the shorts played successfully today, BRCM, BRCD, QLGC, CCMP usual suspects will bounce 'suddenly', 'surprisingly' sometime early this week I think if this trend continues to play. Sometime Monday I think we start to see members of the 5 Families, mobsters, hoods and bosses started jacking prices up again on big spikes. This will be prefaced by preMarket 'news', anal cyst criminal participation and other predictable skullduggery, defense of certain battered stocks like BRCD is expected soon, even a train leaving station Semi call is not out of question even though most idiots know that the Semi Train never leaves its station successfully for any length of time in May. I mean please. Lot of people will be working the hot phones over the weekend in the criminal palaces. Goldman Sucks, MerryLynching, DEanLoser, RobberStephens, CSFirstBullShit, and on and on and on. Manipulation with accompanying volatility to follow. Up spikes here we come. Then fade the buying strength towards end of week. All this of course from an amateur observer of the criminal mind of the Street. I think Cramer would look so funny in stripes, from C.N.B.C. to Attica inside of a year, now that would be something.”

After the initial bounce, there was a pullback to suck in the shorts. And then a second large gap to the upside. Of course, it was Options Expiration week, and some AMAT earnings announcements which added to the drama.

“This week we will see yet another 'AMAT Train Leaving Station' call. They are due to report and already flooding over the AT&T news wires today is the setup 'expectation' that they should give a good earnings report, whatever the #### that means. Since semi equipment stocks basically lead the Comp as they have been holding up better than most other tech Jap zeros and since they lead the semi sector, I think this is all sign language for a coming buying spike this OE Racketeering Week. We could easily see continuation of the one day hysterical Bear Market rally off poor CSCO numbers, the kind O'Neill loves to look for and technicians grow euphoric over, its called 'follow through'. Don't be fooled by this, short everything that moves come Thursday if we do get the spike because it should be just the dying Pig's gasp that yet again has retail confusing buying for short covering, rally for dead cat. Cramer, Ralph BlockHead, even Joey 'the SquirrelHead' Battataglia may be dragged before the cameras to get the troops marching North, the heat on the Brokerage Crooks should be back burnered as well providing them a short covering bounce.”

“OE racketeering Spike proceeding apace as criminal trend by Hoods and Bosses after opening shake down of minor numbers runners, bootleggers and petty thieves. Capone wants all action for himself. May be gang war in streets next week though, look out below starting Thursday after all bets this week are cashiered and chips swept off table “

“AMAT hype is at decibel levels comparable to SuperBowl Sunday. This ploy has been used so many times before its ridiculous. The tip off is that the most crooked of all the Crooks, GoldmanSucks upgraded AMAT on increasing revenue expectations. This telegraphs their true intentions which are to unload the stock and the Comp into retail buying and be out sometime Wednesday, I doubt much later. Shorting everything that moves at that point may be simplest strategy as they have played their hand and are bluffing for the zillionth time. The AMAT Train is Once Again Leaving the Station folks. Same call different House, same result soon to a theater near you.”

“The herd of cattle prodded North by INTC upgrade, the AMAT rumor is being bought and I suspect this is one of the last buying spikes we see this week. This allows great opportunity for Hoods underwater option positions to close flat before expiration and allows great entries short for the bold ones who turn off the noise, its all hype, it comes on extra strong every OE week, the higher they go the better the short entries, the more they mark up the Market artificially the less real buying is done and the more short covering Bear Frantic rally we see. Fine. MorganDeanLoser is trying to prop the damn thing from falling to women's hat sizes. Incredible. Incredible all the upgrades. Must have been alot of back room meetings literally in all the Houses of Crookery over last two nights. Don't think this goes any higher after Wednesday just way too much air pumped into it already. Even I am surprised by the brazen momentum manipulation but I shouldn't be, the Trend has a 70% probability it seems, the completion of the Trend sees selling to resume earliest this week and then more in earnest post Expiration Racketeering.”

Of course, after the Options Racket was over, the market rolled over, and would not bounce again until June

“This is a classic OE day and everyone should record it and mark it down. Classic reversals by hoods and bosses, they spike market up on bogus Dell nonsense or any media stuff they can get their paws on, they exit losing option positions flat then sell the spike. Classic. Market should drift lower into flatline narrow range mode and simply close near its lows today. Best to all, this week was good example of necessity of shutting out all noise and trading the criminal forensic trend. I do not believe the large Houses place huge bets based on charts, those are secondary to trends they know and love and of course, insider information.”

Position Summary:

No changes.

We are 42% short, 22% long, 36% cash.

Half Short:

LOW at $42
INTU at $53
C at $38
TGT at $34
MBI at $50
JPM at $25
AMGN at $52

Quarter Short:

FRE at $68
CFC at $49
KBH at $49
LEN at $56
TOL at $27
BBBY at $35
COCO at $40
KSS at $66

Full Long:

GG at $11

Half Long:

BGO at $1.31
HL at $4.10
PAAS at $5
DROOY at $3.35
GLG at $9
MDG at $16
PigMen Proprietary Trading Desk

The Weimar Run: Bullphoria!!!!

#2 brian4


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Posted 24 December 2002 - 02:49 PM

Mark-All the best holiday wishes to you and the merry men and women of this Board-it is quite a clan of kindred souls that you've built and you can be very proud. We argue, we rant and we rage-but through it all we learn from each other and lean on each other-in an evermore insane world-this board is a refude of logic and wisdom-Merry Xmas to all and a special one to DOC! PEACE!

#3 DrStool


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Posted 24 December 2002 - 03:51 PM

Doc wishes Mark and all his fans the best of Christmasses! Especially many tanks to Mark for his extraordinary contibutions to the success of The Stool!

And don't worry about those bounces next year. 2003 will be like Sherman's March to the Sea.


We are about to begin the retreat from Gettysburg.

If your portfolio has you feeling irregular, for fast, long lasting relief, take a subscribatory. And support your local Stool!

#4 ShamPoo


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Posted 24 December 2002 - 06:23 PM

Gobs of thanks to you Mark. Looking forward to next year.

And thanks to buddy Buddha you wacky dude. “Snowy snow”

BAC at 70. Think we break 50 this time down. Go BAC. We love you.

And yes indeed a big thanks to Doc, the creator of this monster.

Doc, that must be a Sherman Tank

#5 bubbadropping


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Posted 24 December 2002 - 06:48 PM

Doc, thats an excellent and ominous analogy,"we are about to begin the retreat from Gettysburg". It really must devolve into a scorched earth campaign. There is no other alternative. The Market will not be allowed to Clear. WE all know this. The Lizard King has bet his legacy on that and has strapped himself to the Mast for the coming trip around the Horn. Therefore it must be a long,slow relentless day by day Verdunne style capitulation. Why is all this happening in such slow motion one asks? My theory is simple. Truckloads of carpetbagging hucksters climbed aboard the Bull back in the mid 90s. They were hired on at Banks, commissioned at brokerages, began work in financial news houses; a huge tidepool of green scum gathered over time. All these people are desparately selling the next bull in order to survive. They will fight like horned banshees all the way down because it is a fight for their very existence that they are waging. My old broker at Fidelity who recommended that I buy and hold techs and financials 2 years ago at what he beleived was the buying opportunity of a lifetime, now no longer works there. He was 100% long with a good chunk in the supercharged 2x Nasdaq fund. Last anyone knew he moved to Europe and is working in a dress shop in some nameless Belguim boutique. More should follow him down into the sewage over the next years.


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Posted 24 December 2002 - 07:43 PM

Yes, I think 2003 will be a good one for us bears. Agree with Doc & Buddha that there will be steady downside and possibly a humungous rally somewhere along the line. I wasn't expecting so many bounces in 2002 and I missed going long on those. Lots more bankruptcy news and a retrenching consumer should keep the bounces to a minimum for 2003. Buddha's bouncing ball analogy is appropriate. Mark I agree the banks are looking good for puts and shorts, way up there still on the charts. I'll be concentrating on them and on gold going the other way.

Many thanks Mark, Buddha & Doc for your articulate comments...

#7 torah man

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Posted 24 December 2002 - 09:51 PM

I know there was no volume.

I know that the second stringers are running the shop.

I know thatnothing matters this week.

But I did not expect to see a down day either.

#8 maximummark


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Posted 24 December 2002 - 10:01 PM

Interesting how most doomsday prophecies center on war in the Middle East, with the recent focus on Iraq, of course. Venezuela's reserves give the planners a safety valve if they can manage a coup without damage to the infrastructure, but North Korea's belligerance is a counterbalancing ante raise that seems to point to a war at the top (With the cover of a renewed program and blank monitors, they can simply buy a nuke from China or Russia, and play a hand they don't even hold). Belligerance from Bush will I think, be met with an economic war of attrition fought with gold and repatriation...this and other events forseen by so few they are pointless to mention here should flatten the markets worldwide...I give it till May 2003, so I will look to begin scaling out as early as February, since claiming the winnings is likely to get riskier as the avalanche gains momentum...The war was convenient because it was a cover for a rights grab amid fear of an enemy everywhere and nowhere, but a miscalculation because it simultaneously allows dissenting soverign states to avoid responsibility for expensive arms and projected power (They can back a "convenient madman" or a zealous proxy on the cheap)...All in all it looks like we will perhaps need to pledge our lives, our fortunes, and our sacred honor to preserve the republic...how ironic...

#9 MrHanky


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Posted 24 December 2002 - 10:18 PM

torah,if you noticed they closed the nascrap right on the 50 day.I think they took it down for a reason to that level..

I too,was suprised to see the drop today :blink: :grin:


#10 slinger


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Posted 24 December 2002 - 11:28 PM

A very good read

Interview with Dr. Kurt Richebacher

Merry Christmas to all you stoolies!

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#11 longOnUranus


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Posted 25 December 2002 - 12:27 AM

Merry Christmas, Stoolies!

As a gift that keeps on giving, in accordance with the Season and with the permission of Santa Greenspan, I have dug deep into the Stoolpile of 60's rock classics to bring you that timeless Christmas Proletariat Melody:

MC5-"Kick Out the Jams"

#12 Bird D Durr

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Posted 25 December 2002 - 08:02 AM

A very good read

Interview with Dr. Kurt Richebacher

Merry Christmas to all you stoolies!

Loved It................................Merry Christmas........................ :)

#13 torah man

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Posted 25 December 2002 - 09:24 AM

torah,if you noticed they closed the nascrap right on the 50 day.I think they took it down for a reason to that level..

I too,was suprised to see the drop today :blink: :grin:

What is the reason???

#14 brian4


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Posted 25 December 2002 - 11:06 AM

Torah re nazquack on the 50 day-it keeps both bulls and bears nervous-I think we go down this week and next and then a 2 to 3 week rally in the new year to blitz the bears-me I'm long spx january short march spx heavily-and looooong gold. Trade Safe!

#15 ShamPoo


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Posted 25 December 2002 - 04:01 PM

Buddha, your last post is a best WAG on the current wackiness. Much grass.

“All these people are desperately selling the next bull in order to survive.”

Larry K. is sitting at the top of the bull poop pile. Keeping a record of Larry sinking into the pile would be cool.

Slinger, that Kurt Richebacher piece is a very good read indeed. Would never have seen it if you hadn’t posted it here. More grass to you too.

B4, after all of last years stuff it would be odd if we didn’t get some kind of poop up for the new year. Tend to hang with Doc’s thinking that we see diminishing dramatic desperate squeezes in 03.

Go Sherman.

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