. . . . .A Few Unrelated Thoughts. . . . .
DSL
On the contrary to my DSL opinion. . . .consumer demand may FORCE the Regional Bells to deploy DSL BEFORE They can complete the Fibre Optics rollout. The demand is so great that some Bells have already responded to the whining of their customers. Others have ignored the cries. If consumer demand continues to grow at the current rate, the bells may hook up DSL as a pacifier until FO is ready.
August
On another topic. . . .Remember how we saw that "sidelined money" start to flow back into the markets in June? Turns out. . .the 2nd quarter April, May & June saw 73 Billion dollars flow into mutual funds. . . a new record amount. That is why the summer has had such good volume compared to other summers. But I doubt that August will continue this odd trend.
However, a case could be made that too many traders EXPECT August to decline on low volume into the FOMC meeting then pop AFTER the meeting. . . . giving manipulators from the large brokerage houses and hedge funds another golden opportunity like they had in December 99, when absolutely EVERYONE was convinced the markets would decline into Y2K, then get a big relief rally come January. Instead, we saw a massive rally right through the Christmas holidays and right into Y2K New Years. . . then a huge gap up the first trading day of the new millenium and then SLAM! a steep drop, complete with margin liquidation choke outs, then re-load and repeats throughout the month.
Ugh! That was a dreadful month. So it is worth keeping one eye trained on this potential scenario, though I don't believe we would see signs of such until the latter half of the month. And I am sticking with my original prediction, unless I see unexpected volume with positive buoyancy. But again, I don't expect it.
Cisco
Turns out they are still making acquisitions. . . today's about 400 million. Apologies to CEO that said so many of their acquisitions would occur before the end of July. I am sure that is a difficult thing to predict with any accuracy.
Futures
Futures were lower this morning, but are currently unchanged. European markets are flat. Certainly no sign of a follow-through rally, not that anyone expected such. . .
Keep in mind that the pre-market is very easy to manipulate. Often you'll hear me say, the SPOOS is being painted higher or lower. . .the Standard & Poors futures, called the SPOOS, can easily be run up or down to cause the markets to perform a headfake upon the market open.
After the Markets Close
Certain stocks can also easily be driven higher or lower in the pre-market or post-market trading. . . .so take those prices with a grain of salt [whatever that means].
Also, remember that there are professional traders out there watching the after hours market and the pre-market trading. . . looking for suckers. The second the bell rings, they place high asks on their favorite stocks. . . and very low bids. . . and just beg for an emotional sucker to come along that wants to dump his shares for whatever he can get, or is willing to pay whatever the market will bear to get into a stock. The problem is the same person has set the bid and ask and is essentially playing the spread, like a market maker.
But spreads in the extended hours are terrible. So the suckers trade into the pigeon bid/asks and the pro-traders grab those sales. . . profiting handsomely. I see this over and over and over. And often times the trades are at ridiculous prices. . . like 5 or 10 dollars higher than the closing ask or lower than the closing bid.
If you absolutely NEED to get in or out of a stock in the extended hours, you need to first examine yourself as to how you got yourself into such a predicament. If you must make a trade, it is best to pick a stock that is closest to the closing price, then place your limit order and wait. . . it is much like fishing, only not nearly as fun.
Never RUN into extended hours trading just because you can!! Extended hours are mostly a suckers play.
Certain pros ONLY play the extended hours. . . due to the wild volatility and emotions that can lead to big scores. . . in the same way that the "smart thug" hangs out in dark alley ways. Since the prices in the extended market still do not move gradually on news, but rather they gap up and down, only those that held before the news ever see the gap. Extended hours traders generally play the knee-jerk. And many play it like a fiddle. So don't fiddle around with something you don't truly understand.
Those of you that have been active in the extended hours. . . need only compare your regular hours trading to your extended hours to see the difficulty in getting a good price, when compared to closing, opening and regular hours trading prices.
In my opinion. . .
Extended hours are the worst arena since the trading of non-reporting OTC stocks. I dread the thought of 24 hour trading.
Rande Is |
