Futures are way down, although the CPI came in as expected. Here's a good post from Lee on Stock Attack this morning:
To: L3_aka_L3 who wrote (35696)
From: L3_aka_L3
Wednesday, Nov 15, 2000 11:21 PM ET
Respond to Post # 35699 of 35706
I was bullish since late last week but today doesn't look good. I was worried that so many here were looking for
the Fed to go neutral as it was obvious to me at least that with the labor market still the tightest in 30 years, oil
prices up around 35 a barrel, Natural gas up over $6 and consumer spending not slowing that there was no way
the Fed would back off. Other than that, we were very over sold ( Technically NOT FA wise) and our indicator
was calling for a move up.
That same indicator is now at a resistance level, the High/low and advance decline line is also at resistance. Today
we formed a lot of Dojis and some gravestone dojis, hanging man and other bearish candles. I would be extremely
cautious for the next few days.
If it were not for the election mess likeliness to get to some sort of potential resolution this weekend and the
shortened week next week due to Thanksgiving possibly causing shorts to cover, I would turn bearish tonight.
Unfortunately all those things are in play so who knows.
Today's Business inventories were better than expected and Industrial Production came in OK also. Yesterday's
retail report was hotter than the talking heads made it sound though since the only thing to drop was mainly car
sales with J6P still maxing out their credit cards on smaller items. Tomorrow we have the CPI report which is
supposed to come in at a gain of .2 for both regular and core rate. Now that the FOMC is out of the way, the
release should be a bit muted unless it is really really bad.
I am still a bit concerned about some stocks stalling at resistance which I mentioned yesterday but index wise, we
still have the potential to gain another 2-300 points before topping out in the fib retrace zone.
Tricky times for the next week or so. I was very raw long the last few days but trimmed some back today and will
trim even more tomorrow and switch to some more complex hedges to try and capture more movement back and
forth with straddles and synthetic straddles.
The recent strength in Bonds is also worrisome and I expect a drop in rates to below the 5.7 level before the bond
weakens again barring a market selloff that induces flight to safety in which case new highs in the bond or new lows
in the rate would be the norm.
There is still considerable flight to safety type stocks going on. No one seems to be talking about consumer staples
which are eaking out new highs daily on a huge inverted H&S formation starting last August and ending this
October. Utilities and Insurance are also the most recent attracters of new money while no one is looking. Not as
glamorous as the newest tech gadget I admit but that is where the money is going right now and I don't think it
should be ignored. Healthcare and Drugs are also doing well but with Gore threatening to steal the election one
pocketful of votes at a time and his known dislike for Drug companies and desire for Healthcare reform which
never turns out well when the government tries to run a program, I can see looking away from there.
Don and I have talked repeatedly about large market drops usually resulting in new market leadership yet I see
most people still trying to chase the pipe dream stocks that are still grossly over valued. When NTAP reported last
quarter it was very clear that there was trouble brewing yet it was ignored. The same is happening with QCOM
and many of the other glamour stocks. Smart money is running to new areas and handing the bag off to those that
can't read a financial statement. I am not saying all tech is bad as I can't find much wrong with ADI and some
others that recently posted clean sheets and good growth but most others are nasty when you dig into them.PS -
Though Gold still sux, the XAU is showing signs of a short term bottom. Good chance of a pop either to play long
or to wait to short again since Gold will not be allowed to go up by those in the black helicopters. -gggggg-
Good Luck,
Lee |
