Well, Jay, I read AG comments, twice, and the only positive spin I could see, is that he did not warn of "inflation dangers", it surely had no implications that rates are going to be lowered in two weeks, as the market expect. It did have mild implications that the Fed stance might change to neutral. Frankly, I do not think that this exogenous effect will be for more than a day or two. Au contraire, it reminds me of one of Woody Allen's movies, where he has that plane full of spermatozoae, and when he recognizes the fallacity of the "alarm", he shouts something to the effect that it is a false "alarm", but not in time to save his "brethern" that jumped into "oblivion".
Some of the semi equip are close to the 50% level from their recent bottom (CYMI, BRKS, VECO), but the leader (AMAT) is lagging, to me it is a sign that the next day or two should be used to bail out of these positions until a little later this month.
Admittedly, the market is reacting to the dual effect of Gore's failure to get any satisfaction in court, and AG's speech, but I fear both of these events are not going to change the trend as it is.
Note that today, there was extremely heavy buying of put (all day long) in the Dow, the SP 100 and SP 500, usually, the trading of these indices is done by professionals to hedge their portofolio. Particularly in the Dow (a 5 to 1 ratio in puts vs calls). Those guys have been buyers of puts on balance through all the declines this year, so I would heed to their "advice".
Zeev |
