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Mark?s Market Commentary ? January 6, 2002

 

Due to a business emergency, this one will be brief, and there will be no commentary posted tomorrow.

 

To summarize, there were many legitimate breakouts on JPM, FBF, VZ, SBC, and other high dividend payers.

 

EBAY exploded to new highs. YHOO will probably follow.

 

The China Internuts like SINA and NTSE are going up like bottle rockets. Those charts look like Al Green?s Money Supply Parabola.

 

The DJIA exceeded its Bullinger Bands, went past the left shoulder, and is off to the races.

 

Every main line strategist hit the tape today and issued bullish forecasts for 2003. Too many to list.

 

I played a couple of longs on NVLS and QLGC today, but closed them when I had to leave the office?.

 

A pullback will be coming, due to the extreme TICK and low TRIN, but that will probably be a buying opportunity. Maybe the last high was a left shoulder, and the next high will be the real high. Who knows. Volume wasn?t too impressive today.

 

Had to leave before the close, so I?ll let Buddha finish off today:

 

?If you want the world indexes higher and you want speculative capital to move onto the Keno tables from Mars, Neptune and Pluto than there is no better way than to give a couple of the most manic greyhounds a headstart in the morning by unleashing their collars preMarket. AMAT trading desk over at Deutshce Whatever on Thursday and Friday was clearly insidered with their anal cyst upgrade. Its so obvious even Bob Dole could spot this constant numbers running activity. I thought the AMAT train had already left the station a couple of times back in summer of 2001 and then early last year. How many gears does this train have? Who is on it? Reminds me of the great 80s classic "Runaway Train". Escaped Cons hijack a huge Diesel on a track out in the middle of a Yukon blizzard and then ride it backwards into oblivion. Really that has to be the theme for any trading on the Comp circa 2000 and on. All of these are death trains jacked around by convict players manipulating sectors from one day to next. No one cares where the train is going, only that it is screaming down the tracks.?

 

?Everyday is a 'critical juncture' in the dog food world of TA. Market is buying up into the little facists speech on Tuesday, may just be doing a discounting move and sell it off once the idiot starts yammering. But this market will fool most people looking for easy shorts in mid January. I think it will buy the news of War because it bought the bombing run of poor Afghanistan. It remembers this well. It remembers how much all the overpriced screamers kept going up as the daisy cutters were dropping. Could be alot of short covering then since it will be assumed that the war will be target practice for the U.S. Airforce. Of course Wall Street doesn't really care about the long term consequences of such a disastrous policy but thats another subject. The idea for these Hoods is to play short term trends, game your positions, jockey constantly for best odds out one week and forget the rest. I can't imagine that any large money HedgeHog is trying to game out longer than a couple of week time frame. That kind of nonsense is left to the Lou RuKaiser crowd. It?s the dogbone thrown to the psychics who are predicting end of 03 outcomes. Its esssentially meaningless drivel that keeps the media machine greased and rated.?

 

?No time wave turn until Wednesday at noontime or so. I expect buying therefore to continue and the bush nonsense not to be actually sold until then but any entrance long at this juncture is poor risk/reward. better to sit out or buy Gold on retrace, who knows? Hopefully Any pullback after idiot speaks will be bought by greater fools and hopers leaving better short entries for later in January. Caveat is that Wall Street will attempt to front run the opening Bombing festivities which are more or less set for January 27th or thereabouts. They will frontrun with greed since greed won the last time they ran with the bombs in Sept of 2001. Anyone living in Iraq who sees a Cheat Street run begin in late January would best just high tail it over the border. Money insiders will know within minutes when the Go button has been pushed. They will know as soon as Field Marshall Rumesfeld knows.?

 

 

Position Summary:

 

We are 34% short, 22% long, 44% cash.

 

Half Short:

 

INTU at $53

C at $38 Covered at $37

TGT at $34

MBI at $50

JPM at $25 Covered at $27

AMGN at $52

IBM at $80 Covered at $82

ROST at $44

 

Quarter Short:

 

FRE at $68

CFC at $49 Covered at $53

KBH at $49

LEN at $56

TOL at $27

COCO at $40

KSS at $66

NCEN at $28

LOW at $42

 

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

GSS at $1.72

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Hey Guys,

Thank you to the fearsome foursome (Mark, Brian, Piles, End) and the rest of the folks for helping this stoolie go long via RYVYX on Friday. GREAT CALL GUYS.

Now the bigh question, of course, is do I dump the POS at the close tomorrow or hold on for a bit??!!

The real market gurus are here at Cap Stool. Would appreciate your feedback since.....I DON'T KNOW SHIT.

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Folks, I am in an economically sensitive business in a key sector of our economy, namely, semiconductors... Don't be short this market and hold, you are playing with fire...

 

I connected the dots for myself the other day, sitting in New Zealand listening to fund mgr after fund mgr and corp execs in Asia who were almost all bearish and negative on 2003... I came to the conclusion that we are near or at an inflection point.

 

Then, I returned to my business today, and a flurry of new orders came in over the last week. More business than we've seen in months...

 

I warned my bullish friends in December of 99 that things were going to take a dive... in December 2002, I've unzipped the bear costume and stand naked in this environment, neither bear, nor bull... I'm neutral, but more bullish than bearish at the moment...

 

Not saying that there aren't shorting opportunities on the way up, but if you think 2003 is another down year, you'll be very surprised...

 

Happy New Year to all....

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I don't know shite either but, I sold most of my calls today and went short more near the close when we seemed to have trouble at 931. I expect a retracement to the 900ish area.

 

spx above it's boobinger band and vix below it's band tells me we are near or had a temp. top. (that took place at around 3 pm est today.)

 

Don't follow me.

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'America Prepares for War" is the headline in the local paper. I've got my popcorn, too bad I've still only got a 20" TV instead of one of those big Plasma jobs to enjoy the action.

 

I expect Best Buy to be running a war special on those babies. Too bad we can't actually see the dead babies. Even worse the damn PC crowd at the White House will probably downside that number, just like the unemployment one.

http://www.philly.com/mld/inquirer/2003/01...ion/4874382.htm

 

But what the heck, it's Saddams fault, and look at that market. Buy death I always say.

 

I pretty much won't dong this thing because of my sick principals. I'll be proud to lose money on my yet to be established shorts if this thing runs up when the bombs start dropping.

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Has the business activity caught you by surprise Fart?

 

My take is we are near a ST top. Beyond that - I don't participate. If we need to react to another ST bottom - so be it. Let's make some money.

 

I'm looking closely at my PM's. I suppose I'll put some limit orders on some and some stops on some others tomorrow.

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Was stopped out of a number of positions today.

 

For what it's worth, I think we are in a midst of a replay of August-October 02 (refer below link) only on a grander scale.

 

http://www.saavycharts.info/

 

On this basis I think we have just witnessed a massive bearish wedge and we are about to set up for a wave 3

down.

 

Short term there is only one thing that drives the market SENTIMENT. And things have turned decidedly positive.

 

A successful Iraq compaign is fully priced in.

Butt plenty of potential bad news on the horizon,

4Q02 reporting, unemployment figures, capacity utlization,

leading indicators etc.

 

I would like to know Vesselin's take.

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Fartportfolio: I don't know much about New Zealand

other than that it is a scenic country (Lord of The Rings) that has some scary looking rugby players (Mr Jonah Lomu should have come to the NFL).

 

But I have yet to meet a fund manager

that is BEARISH. Maybe they are different in NZ.

 

As for 2003 not being another down year, you may be right.

But remember in Japan the last 6 of 7 years have been down years. And I have yet to hear a plausible reason as to why we will avoid a similar fate.

 

Jorma: I just saw a book called the Faces of the Trade Center. And the final page is this picture of a surviving wife and her two children. I nearly started crying when I saw the picture. I had to close the book for fear of embarassing myself, in the bookstore.

I don't care what race or religion, kids are innocent.

At this point I don't know who scares

me more Bush or Saddam. If I lived in Bagdad and someone dropped a bomb on my kid, I'd be on the first plane to Washington.

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FM, I agree with Butt. They're foaming at the mouth over here no matter how you measure it.

 

Lets take a stroll down sentiment lane, shall we...

 

1) Mutual Funds 5% cash.

2) Wall St Strategist recommend 70-80% equity allocations.

3) Business Week survey shows 89% bullish for 03 with very high targets.

4) Investor Intelligence 51% bulls, 25% bears.

5) VIX in the twenties.

6) Equity PCR 0.4 today and 21-day MAs still floating on very low side.

7) S&P500 COT. Small traders very bullish, commercials heavy short.

8) Business newsmags showing pictures of bulls on cover and that recovery is a foregone conclusion.

 

There's more, but I can't recall and my fingers are getting tired of typing this same damning evidence over and over again.

 

2003 may NET up, but it certainly isn't starting up - the path of least resistance is still down :P

 

Anyone who missed the first top on Dec 2 is getting a second chance now. That I can say with 100% certainty.

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FM, I agree with Butt. They're foaming at the mouth over here no matter how you measure it.

 

Lets take a stroll down sentiment lane, shall we...

 

1) Mutual Funds 5% cash.

2) Wall St Strategist recommend 70-80% equity allocations.

3) Business Week survey shows 89% bullish for 03 with very high targets.

4) Investor Intelligence 51% bulls, 25% bears.

5) VIX in the twenties.

6) Equity PCR 0.4 today and 21-day MAs still floating on very low side.

7) S&P500 COT. Small traders very bullish, commercials heavy short.

8) Business newsmags showing pictures of bulls on cover and that recovery is a foregone conclusion.

 

There's more, but I can't recall and my fingers are getting tired of typing this same damning evidence over and over again.

 

2003 may NET up, but it certainly isn't starting up - the path of least resistance is still down :P

 

Anyone who missed the first top on Dec 2 is getting a second chance now. That I can say with 100% certainty.

Let's see, at the time, I seem to remember that Doc and I were the only ones who thought it was a top... I could pull up the thread, but you remember, I'm sure...

 

I'm in an "over-the-horizon-radar" type of business here... I have to give the weight to is happening there... I was early in December of 99 on my bearish stance, I'm probably a little early here, but I am pretty darn sure about the direction of things...

 

I'll be looking to add some longs on the next pullback.

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