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The Roundtable Discussion


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#1 wndysrf

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Posted 13 January 2003 - 05:03 PM

Mark’s Market Commentary – January 13, 2003

The Barron’s Roundtable was published this weekend. A fairly balanced discussion, with both bulls and bears. For the record, we are documenting some of the key quotes uttered by the players. We’ll check back on June 30 to see which way the market is going, and see who is right and who is wrong.

Scott Black:

“The war is going to be fiscally stimulative. I don’t think it will spread into a regional conflict. Oil will come down to $22 a barrel. Overall, it’s going to be bullish for the U.S. stock market.”

Mario Gabelli:

“We are going to have an extraordinarily good economy in the fourth quarter of 2003 and the first half of 2004, and the market will follow suit.”

AJC:

“The Fed has done a fabulous job in terms of supervision and regulation.”

“Book value ratios have become less helpful in service and finance industries. The stock market indices increasingly include more companies in which book value is irrelevant.”

John Neff:

“The economy is going to be OK, for the same reason it was OK last year – the consumer.”

Barton Biggs:

“Gold is a speculative asset, not an investment asset. There is no criteria for measuring value or yield with gold. We are going to have another big rally in tech.”

Marc Faber:

“The central bankers of the world had the opportunity to sell their gold positions in 1980 for over $800 an ounce. They could have put that money into the DJIA at 800 or bonds yielding 15%. Those idiots waited 20 years to sell gold below $300 and buy bonds below 5% and the Dow around 12,000. This is the mentality of central bankers.”

“I agree, some of the tech stocks can double. For a trade, I would buy all these garbage tech stocks because they can all double – before they go to zero.”

Felix Zulauf:

“There is a structural problem in the U.S. economy, because economic policy is always targeting consumption. All these earnings expectations are outrageously high. The market is trading at 4x book, a very high valuation.”

Today’s Action

Over the last few days, it was becoming increasingly easy to chase some of the beaten down Soap Opera Actresses for a one, two, or three day fling. Just when the game gets a little too easy, that’s when it changes.

The hopers were greeted this morning with yet another monster gap up on the open. But Da Boyz showed up and hit the sell button. Giant block sell trades were flying out the door on the Supermodels. I noticed on today’s Riverboater’s Business Daily that the Specialists Short Ratio was near an all time high.

The rest of the day was spent holding the usual “Distribution” closeout sales, where dippers who missed the earlier move were buying like mad. Unfortunately, Da Boyz were selling right into them, maintaining the typical upward drift to keep the shorts at bay.

Note that DELL was in a full blown collapse mode, trading down another 5%.

And after Da Boyz slipped out the back door this morning while the Supermodels were taking a shower, the poor girls could never really get things back together the rest of the day. Too much time fumbling around in the usual daze, wondering what happened.

How could he just walk out and leave like that?

Why did he take his business card out of my purse?

How could he give me a phony cell phone number?

For what its worth, I distinctly remember these type of large selloffs near market tops. Some happen in the beginning of the day, some happen at the end of the day after one of those long, drawn out intraday tops.

And they also happen when all the bears are convinced that an extended rally is most certainly in play, and many of them start closing shorts and playing the long side.

Finally, looks like a top was put in on that piece of Asian Exotica everybody has been chasing this week. There is no limit to how high guys will climb in order to get some of that Crushed Velvet Interior. A perfect doji top. (Chart won't update until later today.)

Posted Image

………………..

The Color Commentator was witnessing the action, noting the Supermodel Selloff. Will that mean billions of Global Market Cap will be erased tomorrow as the entire planet is jumper cabled to the SOX?:

“Note also the negative MACD on NoSmellUs (NVLS) and KlacWhore (KLAC). They both have gaps down below. They both were jammed higher gapping up at open this morning and then bitch slapped by MMs and insider traders at the 10 am time turn on big volume. Think they smell a bucket of shit in the woodpile somewhere? Or just typical jam up,jam down OE games?”

“Is it insider news on INTC report that’s creating the fear? At any rate, these two are the 'men on point' for the entire Comp, meaning that they signal momentum reversals for most of World Indexes as well including the all important Nigerian Futures market. Greenlanders trading their polar bear currency should take heart as well. Plutonians power trading off light waving signals on their super atomic platforms had best take heed, their executions are slow to begin with. Markets are down on Jupiter as well, they are waiting until 'notell' INTC reports.”

And of course, everyone is now aware of some type of “accident” at a Miami hospital over the weekend. Who is going to pay for this colossal accident engineered by an overly aggressive FEED? Buddha comments:

“Who the do they have working the night shift at Miami General? A bunch of economists? Maybe some Fed members on paid leave trying to pad their accounts? Maurice Gibbs goes in after some intestinal cramps and ends up losing 80% of his stomach and suffering a massive coronary under the knife. Sounds like Dr. A.Greenspan was on shift that evening. How would you like to be rolled in under the lights and see his ugly grill looming over you as you started the countdown into sleepy time? Imagine if Fed charlatans and Al Green were liable for the malpractice? The billions of tons of blood drained from the system, the millions of carcasses tossed out back behind the hospital dumpster. You'd think someone would be liable. Instead what they are doing is opening a new account at Black and Decker for these leeches. Buzz saws, jimmies, titanium tipped sledge hammers, trowels and nuclear powered chain saws are all on special for these quacks. More carnage to come. At least the Gibb family can afford a good lawyer. Who's going to represent the hapless, decapitated Joe Retail?”

Yet another bull market icon bit the dust: Steve Case at (AOL). I can see it now, starting up his computer, getting that “You’ve Got Mail” message, and seeing a message from the Board of Directors:

“You’re Fired”

Who will be next? Michael Dell? Both look like those ultraconfident frat boys who always find a way to seduce the most desireable sorority girl across the street. The one who was always “unobtainable” by other mortals.

Then years later, they find out she got pregnant. And they are greeted by a process server one day, with documents prepared by a $700/hour lawyer, demanding alimony and child support. With retroactive provisions.

Say goodbye to half of your net worth.

Back to today’s action:

Bernie Schaeffer noted that the call volume and open interest on QQQ and INTC were sky high. I was hoping for a “reaffirmation of a $40 price target” by Dan “Greaseman” Niles today to officially mark in a top. Maybe it will come out tomorrow.

The VXN and VIX fear gauges continue to plummet faster than Tommy Mattola’s reputation. Note that every time the market manages a reasonable “bounce”, these meters fall into the basement. Maybe if the market sells off in a orderly manner, with the usual intraday hysteria bounces, these will go down and test last year’s lows as Hope Hysteria accelerates as we go lower.

Now, more than ever, every dip is a buying opportunity. If wave 3 is really upon us, then the psychology is probably “As Good As It Gets”.

Still expecting some more spiking this week, possibly to even higher highs.

Gold shares continue to act fairly well. A pullback is to be expected, but they are still grossly underperforming the metal. Nobody believes the rally in gold. A breakaway gap is coming. I suspect that the shorts are piling in now for the setup.

The Barron’s Roundtable Portfolios will be posted later in the week.

Position Summary:

A random number of shorts were covered in a panic on the open.

The following half short positions were opened later in the day:

KLAC at $41
CYMI at $39
NVLS at $35
INTC at $18

The long position on MDG was closed at $16. It will be replaced with HMY later this week when the gold stocks retrace.

For PileDriver, a long position was opened on COF at $39. Went nowhere, so it was closed. Schaeffer also said the call position on this one is sky high.

We are 36% short, 28% long, 36% cash.

Half Short:

INTU at $53 Covered at $50
MBI at $50
KLAC at $41
CYMI at $39
NVLS at $35
INTC at $18

Quarter Short:

FRE at $68
KBH at $49
LEN at $56
TOL at $27 Covered at $22
COCO at $40
NCEN at $28
LOW at $42 Covered at $38

Full Long:

GG at $11
HL at $4.55

Half Long:

BGO at $1.31
PAAS at $5
DROOY at $3.35
GLG at $9
MDG at $16 Sold at $16
GSS at $1.72
SIL at $15.50
WHT at $1.05
PigMen Proprietary Trading Desk

The Weimar Run: Bullphoria!!!!

#2 Fartpolio Manager

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Posted 13 January 2003 - 05:08 PM

Man, that was 2 of the ugliest back-to-back trading days I've seen in awhile...
Call it a "Kiss-your-sister" rally for the bulls... they'll be calling it "bullish compression"... I'm more and more convinced that we'll see a blowoff, since the market is incapable of any sustained movement to the downside... we're still in a bull market mentality, they are buying the damn dips... we need to see a POWERFUL REVERSAL... for this market to get off the see-saw... Bear Spike, that's what it's all about.

#3 Hypertiger

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Posted 13 January 2003 - 05:43 PM

Good covers...
"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...

#4 Slothrop

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Posted 13 January 2003 - 05:47 PM

Agree with Fart. Two days of unchanged and practically unchanged. That means an explosion of volatility is dead ahead. My bet: way up, then way down. Maybe in one day.

#5 fxfox

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Posted 13 January 2003 - 05:50 PM

monster ramp in the a.m. and low p/c ratio that is all we need.

Can happen from tomorrow on. Just wait, no need to be frustrated, bulls sing their last song pretty soon. If there will be another upmove after we did go down quite hard i am not interested in, all i know is, the next downmove will give good money to the bear, once you see it doesnt want to go lower, you cover, it is easy.

But then in mid freb we will definitly go down, than we can go short and hold position and go on vacation, return 2 weeks later and see big big big fat profits on the screen.

(just to make that clear: for me a 100 point drop in S&P is a monster profit, for others this will only mark a "undecidied market" or so :lol: )
'patriot' is formed with 'patria' and 'idiot'

#6 Yaryman

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Posted 13 January 2003 - 05:59 PM

Abbey Joseph "blow hard" Cohen says no double dip recession.
Then we get news like this.

"Machine Tool Purchases Drop 9.7 Percent
By THE ASSOCIATED PRESS

Filed at 12:07 a.m. ET

NEW YORK (AP) -- U.S. purchases of machine tools fell 9.7 percent in November from
the previous month, and dropped 4.3 percent from the same time a year ago,
two industry groups reported."

http://www.nytimes.c...hine-Tools.html

Sounds like it will be a recovery that doesn't invlolve making anything.

But wait, Abbey is never wrong!

OK, she's never wrong as long as there is a bull market.

#7 fxfox

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Posted 13 January 2003 - 06:06 PM

dont forget:

tomorrow we have retail sales for december

then intel after the bell

and on friday michigan consumer confidence


if the market surivives all these numbers than it can go up a bit more. But it wont survive.

Aspike will be a short an hold entry opportunity, wheter it is due to intel or something other plays no role. Market cant hold up thru all these numbers this week.

Cant wait anymore, Mr. Grosso, pleasse ring the bell right now! :lol:

Good night stoolies!
'patriot' is formed with 'patria' and 'idiot'

#8 Ned38

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Posted 13 January 2003 - 06:46 PM

MOMO Mini AKLM has just missed badly and lost 20 odd % AH

#9 ShamPoo

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Posted 13 January 2003 - 07:02 PM

Thank You Mark,

Jump them girls before they head home to mama. Bunks spilling la load in a few days. Should add some interest. Thin ice out there. BAC 72.49, ONE 38.73.

#10 The End

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Posted 13 January 2003 - 07:05 PM

O.T.

My 14 month old is a wiz at computers. With a couple of slaps on the key board she changed the font size to extra large. can anyone help me restore my old settings?
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

#11 GregFokker

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Posted 13 January 2003 - 07:11 PM

O.T.

My 14 month old is a wiz at computers. With a couple of slaps on the key board she changed the font size to extra large. can anyone help me restore my old settings?

In Internet Explorer, goto View:Text Size and resize it from there.

...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Well, good night everyone. I gotta go lube up for tomorrow's regular end-of-week Gold Slapdown and Stock Index Bear Punishment Rally Weekend Greenprint. ...Probably another Shock-and-Awe Gap-Up-Open and Wire-to-Wire Meltup Runaway Bull Charge Mo-Mo Spike to Fresh New All-Time Lifetime Highs, culminating in a 4:15 yelping scalded dog runoff with panic short-covering and legal not-held bad double fills due to fast market conditions, plus quote system freeze-ups and trading platform lock-outs along the way. *yawn* typical gov't Friday. - Shorty


#12 The End

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Posted 13 January 2003 - 07:14 PM

Tanks Greg

Are you feeling any better?
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

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Posted 13 January 2003 - 07:43 PM

The Daily Reckoning PRESENTS: The intoxication
of central bankers and the doom of paper money.

THE PERILS OF SUCCESS by Bill Bonner
:) In true “Hypertiger Style”

Last month, Alan Greenspan spoke to the N.Y. Economic
Club and sounded, for a while, like his old self.

"Although the gold standard could hardly be portrayed as
having produced a period of price tranquility," he
conceded, "it was the case that the price level in 1929 was
not much different, on net, from what it had been in 1800.
But, in the two decades following the abandonment of the
gold standard in 1933, the consumer price index in the
United States nearly doubled. And, in the four decades
after that, prices quintupled. Monetary policy, unleashed
from the constraint of domestic gold convertibility, had
allowed a persistent overissuance of money. As recently as
a decade ago, central bankers, having witnessed more than a
half-century of chronic inflation, appeared to confirm that
a fiat currency was inherently subject to excess."

CONCLUSIONS:

1) No central banker in all of history
had ever succeeded in proving the contrary.

2) Every fiat currency the world had ever seen had shown
itself 'subject to excess' and then subject to destruction.

* Since Alan Greenspan has been Fed chief, $6,250 new
* dollars have been created for every new ounce of gold.

#14 brian4

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Posted 13 January 2003 - 08:03 PM

Only on Wall Street-first the news that Steve Case has been gassed brings a heartbeat back to AOL-then it is announced that Case remains as a Director and is in charge of stratergy planning (as Shrub wud say!) Well I say AOL is DOOMED!..This morning on Intra day I pointed out that the E wave targets had been met on the Dow, Oex and NDX-the SPX target for a top has not been met nor does it have to be it can crap out anywhere in here. My take is Wave 3 down will begin probably tomorrow or no later than Wednesday morning. There could be an attempt to go back to todays highs but either way it doesn't matter. If you are not short you oughta be-this is the BIG ONE! Doc warned the other day about being long here he is right when it turns you won't get out intact. Scroll thru the Feb to June SPX and Diamond puts (in and at and slightly below the money) and you will see a ton of huge bets have already been made. I noted Simple Guy was basically singing out of the same hymn book as the END and I-so LOCK N LOAD! Trade Safe!

#15

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Posted 13 January 2003 - 08:05 PM

Gold shares continue to act fairly well. A pullback is to be expected, but they are still grossly underperforming the metal. Nobody believes the rally in gold. A breakaway gap is coming. I suspect that the shorts are piling in now for the setup.

A snippet from The Daily Reckoning (Monday, 13 January 2003)

- According to the latest Commitment of Traders report from
the Commodity Futures Trading Commission, the speculative
traders in the gold market have amassed one of their
largest long positions in many years. (I.e., they own a lot
of the stuff). Meanwhile, the commercial traders in gold -
considered the "smart money" - have amassed their largest
short position in many years. In other words, whatever gold's
long-term virtues may be - and we here at the Daily Reckoning
think gold's virtues are considerable - the short-term sentiment
indicators suggest the yellow metal is ripe for a sell-off.





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