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The "No Corporate Spending" Selloff


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Too bad the Bernanke Resubstantiation Rally did not materialize.

 

Now the market participants are "Fearing the Fed" with all the inflation fighting talk.

 

Unfortunately, this position failed to sell down the commodity complex, nor dampen the enthusiasm for the basic materials stocks.

 

Instead, it hit the tech sector the hardest, where the famous, fabled "second half recovery" is supposed to land.

 

Why is that?

 

Same reason of every year.

 

9000 HedgeFunds plunge into these supermodels on a "hope trade" to position themselves for the inevitable pre-election ramp rally or the "one and done" rally.

 

But Bernanke did not accomodate.

 

Therefore, billions of eyeballs gaming the NDX on a 1-minute chart saw the breakoff on the open and sold throughtout the day.

 

Nobody wants to stick around. Sell first, ask questions later.

 

But there is still plenty of money to be made.

 

The old lap dancer (DROOY) from Johannesburg caught a bid today, up 11% on all-time record volume.

 

So it is still "game on" for the gold trade.

 

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hey girlebulls ?bearman

 

you shoulda woulda coulda sold yesturday

 

butt it snot too late

 

public panic 201K mutual fraud redemptions haven't even started yet

 

1-800-FIDELITY

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attention Speakeasy:

 

XSNX attempting to recover. Shoulda bought some yesterday. :(

Uh Huh. I got some this morning at 96 centavos and dumped that buy up 20 centavos to lower me cost. Forensics are helping my trading. Think like a criminal and leverage up. :lol: :lol:

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Nice work, Speak.

Well, that was about my only smart move today. :( I violated one of the first rules I made years back, don't dong when feeling like I'm missing out, or I lose dough. I bit pre-open on a bunch of miners and had to massage positions all day. :P

 

Gotta go, it's warm and the pups are demanding we go to the beach. :lol: carry on. B)

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hey girlebulls ?bearman ?bearman

 

you shoulda woulda coulda sold yesturday

 

butt it snot too late

 

public panic 201K mutual fraud redemptions haven't even started yet

 

1-800-FIDELITY

 

I often go long or short the IWM (Rusty etf), sometimes as a hedge, sometimes as a s/t directional play. I rarely do the options because the premiums are so huge.

 

Last Friday (5/5), as IWM was heading to tag 78, I put an order in for 2,000 shares short. I was planning to ride 1,000 shares down to fill the gap at 77.10 and hold the rest for a bigger move down (perhaps THE big move down.)

 

I was shocked when Ameritrade had no shares available to short. First time in 3 years. Of course, Rusty drops off a cliff soon thereafter.

 

Hmmmmm....

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Oh no! Gold down $5 after the close! Now, all we need is another $250 drop, and Jeeem, Teeem, and Frank Barbara will have proven themselves correct 5 months ago when they jumped off the bandwagon, saying how overbought gold was. (In fairness to Tim Wood, it'd probably have to go down another $300, as he was saying at the 'end of '04 how his "charts" were telling him that we were at the top of the 9 year cycle, whatever the heck that meant.)

 

Sorry, but it's hard not to gloat at a time like this. For more insight into the weakness of gold bear arguments, check out these two articles, written about a month apart on CNN's money site. Deja vu? Deja vu?

 

 

http://money.cnn.com/2006/05/09/pf/gold_investing/index.htm

"$700 gold: Want in? Think twice"

 

http://money.cnn.com/2006/04/06/pf/gold_investing/index.htm

"$700 gold: Want in? Think twice"

 

Note the two different dates here. That's because the ORIGINAL article was called, "$600 gold: Want in? Think twice" CNN JUST changed the contents of the April 6th article, surely because they didn't want people realizing they were copying the exact same article, but with updated numbers! That is LITERALLY what happened in Orwell's world. I saved the original on my home computer- I'll post both articles tomorrow, and you can see for yourselves. I can hardly wait for June's exclusive, "$800 gold: Want in? Think twice"

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A bit too early to say for sure, but looks like the Barron's curse may strike yet again.

 

They've really outdone themselves lately.

 

In early April, they did a cover story on MSFT ("It's Alive! Dramatically improved versions of Windows and Office should jolt Microsoft's stock back to life.").

 

It got jolted all right.

 

Then last weekend, they publish the Big Money Poll showing how everyone is megabullish and loaded to the gills with equities. And they pass along a secret tip on how to play the coming boom: try tech. ("Dow 12000").

 

It's said they don't ring a bell at the top. But sometimes they print pictures of one.

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4:20 pm: The major averages closed sharply lower Thursday as soaring commodity prices and higher interest rates -- the main reasons behind our Neutral market view -- exacerbated concerns about inflation and Fed policy as aggressive selling efforts weighed on stocks across the board.

 

On the commodity front, gold prices closed at a new 26-yr high and copper was up 9% at one point early on and finished at another historic high. Further underscoring our Overweight rating on the Materials sector was silver, which closed at its best levels since January 1981. Also, crude oil prices continued to regain some upward momentum, closing up 1.6% at $73.25 a barrel amid ongoing geopolitical concerns tied to Iran and Nigeria as well as refinery outages adding to supply concerns. Neither oil's surge nor gold's gain, however, were enough to provide sector support for Energy and Materials. As this year's top two performers, investors still viewed today's overall bearish sentiment as an incentive to lock in recent gains.

 

Technology, though, was the biggest drag on the market from a sector standpoint. As if Microsoft (MSFT 23.22 -0.55) missing Q3 (Mar) forecasts by a penny two weeks ago and then warning for the current quarter wasn't enough, nervousness this week was renewed following Dell's (DELL 24.51 -0.38) disappointing guidance Monday night, which continues to weigh on PC stocks. Less than 24 hours later, continued weakness independent of inflation fears was exacerbated after a disappointing sales forecast from Cisco Systems (CSCO 20.05 -0.70) fueled concerns of slowing growth in tech. Further consolidation in the semiconductor group, which continues to exhibit a negative bias going into the seasonally slower months, also contributed to Technology's 2.4

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