Commentary from the "Village Idiot" at Financialville...
* Brokerages Wake Up and Smell the Volume
"The NASDAQ closed with its 51st record high close this year alone. Today was also the 4th largest volume day on the NASDAQ, but that is nothing new. Since mid October, volumes have increased by tremendously. 1999 daily average volume on the NASDAQ has increased by 33% so far compared to all of 1998. Many of the on-line brokers, though, have not seen a reaction in their stock price due to these extraordinary volumes, that have now become anything but extraordinary, in fact they have become just ordinary. Which is great if you like the on-line brokers! Ameritrade (AMTD) got some press yesterday (see Thursday's Daily Commentary) and that helped move the sector up slightly. Today, though there was some mixed results in the sector. Ameritrade continued its momentum run upward, gaining about 13% today, E-Trade (EGRP) lagged a bit gaining only about 5%, while Schwab (SCH) actually gave up half a point to close down. This is just before Schwab is supposed to announce their effects from the large volume numbers in the 4th quarter. This is not an earnings statement from Schwab, just information. But this information, if it is strong, could continue this rally in the on-line broker sector and get all the brokers moving up together as a sector, especially if the bond continues to rally and push that yield below 6.15% on Monday as well. Plus CNBC has not really recognized the on-line brokerages strength, because the sector as a whole as not moved strongly yet and therefore other sectors are outperforming them. Monday could see, (if the previous statements come true) the on-line brokerage sector getting some sector watch coverage on CNBC. It is hard to ignore the effect of such sustained large volume activity, even though many would rather just wait till next month's earnings from the brokerage sector to see what the real bottom line is." |
