>>hoping for big flush out<<
I was too but there is still no fear and lots of hoping. If you read my comments tonight, I started off slightly bullish as a few of my indicators point to a bounce here.. High Low ratios, our new indicator ( possibly, it is close), advance decline ratios, etc.
Then I looked at weekly charts and I just don't see it yet. We need to close a week down where we were at today's lows or slightly lower. I started becoming un-bullish -ggg-
When I logged onto SI and was listening to the talking heads on TV, I just got more and more bearish. I have never heard so much panic control and attempts to hype etc. Talking heads on TV saying how the professional traders are the ones dumping and not the small guy. They say the small guy is doing the smart thing by holding. Aren't these the same guys that said the individual investor didn't know how to handle the market and we needed to pass our funds to the pros because they know best? I read this as, " We haven't sold all our stuff yet, so keep holding the bag until we are at a safe distance as we light the fuse. -ggg-
Around SI, I am reading about this being a double bottom, some say from a few days ago and others say from April. Double bottoms are usually about a month apart, not 3 days and not 9 months. I hear people saying we have had capitulation. If so, why is da Chief still posting pictures of rocket launches, why is Strauss still trying to pump his biotechs, why are so many posting about if I can just get back to even, I swear I will sell? There isn't any capitulation yet. Everyone is waiting for Greenspan to cut the rate and save the market. I guess they weren't around when the PPI came in hot and the CPI this morning showed huge inflation. I also guess they missed the USA today article about the biggest Social Security COLA increase since 1992. AG is NOT going to cut rates with inflation rampant and while people are still maxing out their credit cards! If he does anything, he should raise rates, not cut them. We have the lowest savings rate ever recorded in history. The funds are also being touted as sitting on cash. Where is all this cash? I am beginning to think that Janus doesn't hold anything that goes up and are a stealth Short fund. They were the biggest holder of NOK, INTC, APPL and every other big loser of the last few months. Tonight CNXT warned and Janus is the #2 holder of that stock. Any cash they have is going toward margin calls and fund withdrawals as they go down the tubes. J6P is used to getting 25-50% gains in their mutual funds, when they end the year down 25% or so, they are going to be ticked off they can't buy that new Lexus or Pokemon/Beanie Baby set for X-mas.
Take a look at a weekly chart of MU and then read the semi boards. They are still talking about bounces and how they are going to head back up. All year they said that the cyclical nature of Semis was over, today on the local news, MU stated that Semis are cyclical and they were on the downslope side. I guess they don't know anything either.
After 17 years of bull, the people are full of bull. -g- There is no fear, no capitulation and no sense of reality or fundamentals. Even the self proclaimed trading experts on SI are getting thin in their calls. If I read one more time --(phrase deleted to keep another war from starting)-- without a prior prediction, I am going to puke, especially when the market whipsaws 30 seconds after a call is finally made about going down and it proves to be the low of the day and they still claim to be on the right side. Some plan. -g-
Basically what I am saying is every drop has been met by immediate bounces but always to a lower high. Each time it is proclaimed to be THE bottom. Most of us here called the 98 and 99 bottoms and we didn't do too bad on the summer bottom this year so I am not directing this at this thread. My point is there is still waaaay too much optimism for a bottom, there is too much hope and there are too many perma bulls still spouting off. When they all go into hibernation for more than a couple days, when the press only talks about bears and what to do with all those worthless stock certificates and Time runs another cover like I have on my wall from 98 where the people at the party are falling off the cliff of the NASDAQ chart, that will be THE bottom. Until then, I am looking for "tradable bottoms" to scalp and to get short again.
This morning started off great, wide spread panic selling, HUGE spreads between bid and ask and a lot of NYSE stocks opening late even though there was no company specific news. Those are bottoming days, but as Don pointed out, bottoms usually aren't over in a half hour and they don't fade at the end of the day. I think we could bounce here but I expect us to revisit the lows within the next month and probably much much sooner. I also think that there was blatant manipulation today to prop things up. Not sure why. It could be options expiration, it could be the Gore election games since he is toast if we tank now but there were too many GS buys on volume in SP00s and Major index heavy weights. Someone wanted this up today and they wanted it up bad. Thankfully this isn't Friday and we will get two days to watch this play out before we have to decide if we should be short for Monday's open.
We have crashing foreign currencies, a stronger dollar now than when it was hurting the multi national companies, inflation is on a tear, no slowdown in Consumer spending habits, a boatload of questionable corporate bonds, the inability of telecom and internets to float more debt yet everyone is acting like this is the beginning of another bull market. I admit, there are more and more stocks showing up on my radar as being buyable based on FA but they aren't anything that most people are watching. The stocks that make the top 100 of postings on SI are still between 100 and 2000% over valued. I saw a post here today about how CSCO dropped to a PE equal to it's growth rate once. That is the textbook explanation of fair value, anything higher than that is over valued. Also keep in mind that most tech stock earnings are smoke, mirrors and accounting gimmicks which means you probably have to subtract the majority of their "earnings" which brings fair value much much lower than a face value PEG of one.
Most of this is not obviously directed at you but I got going and couldn't stop. Thanks for letting me vent here, I only scalped a few things early this morning for 3 decent wins and a small loss so doing OK except for one position trade I should have dumped long ago. Under big on it but "hoping" (-g-) for a bounce that I can sell calls on to hedge myself in with offsetting puts. It's only minor over valued but it's a long term hold!!!! -ggggggg-
Good Luck,
Lee |
