WARNING!!! Useless, speculative drivel, with assorted ranting & raving to follow :-|
IMO, a pullback in the NAZ was not unexpected in here..... the NAZ had gone up dramatically since 1/3/01..... even though it was ridiculously oversold back then...... The magnitude of todays drop (on top of the 62 point drop on Wed) was a bit overdone when considering current economic data & the direction of the FED..... The unemployment news out today & other economic data seem to show that the economy is not as bad as feared by many..... We have the FED dramatically lowering interest rates & openly telling us that they are prepared to continue doing so if need be.... The FED has been dramatically pumping liquidity into the system for a couple of months now too.....
Earnings & forward guidance from many of our favorite Tech companies seem to indicate that most of these companies stocks had more than priced in the current economic slowdown. FWIW, I'm talking about what these companies actually reported & their forward guidance, NOT how it was spun by the HOUSES & their ANALysts. Sure, a few Tech's warned going forward..... but many Tech's actually guided estimates upward while being cautious about the current qtr & maybe the one to follow.
So why the dramatic sell off? The market had the current slowdown priced into most Tech's. It seems that the economy might not be that bad after all, Tech earnings for the most part are not going to crash, we already got 100 basis point drop in interest rates & the FED is supplying lots of liquidity...... money is flowing into the market big time too.
Why did the NAZ drop 122.28 points today then (& down about 175 points since Wed)? Why will the NAZ go down even further next week with all of this seemingly positive news out there?
Heaven forbid anyone mention manipulation by MM's & the HOUSES..... but I will.....
There was a gap up in the NAZ on 1/17/01..... the previous close on 1/16 was NAZ 2618.55..... the open on 1/17 was NAZ 2710.52..... the closest we came to filling that gap was on 1/18 with an intra-day low of NAZ 2661.26...... IMVHO this gap is a target for the HOUSES to shoot for without having to have any nods or winks between the HOUSES. Their TA guys just point to the gap & the ANALysts have their target. No collusion or behind the scenes conspiracies necessary between the HOUSES. All that is needed is to prime the pump to the down side by shorting, selling naked calls & having their ANALysts change their tune from BULLISH to BEARISH until the objective is achieved.
The HOUSES & talking heads on TV & in the news will spin their views of gloom & doom as to why the market will tank & the economy will go to hell in a hand basket taking the NAZ down with it....... These folks, who were quite BULLISH until a few days ago, suddenly have a BEARISH outlook in the face of mostly positive data going forward.
Funny how almost everything we have heard from these 'experts' since 1/3/01, was sooooo positive looking forward..... don't get me wrong..... we were currently at a point where consolidation of the recent gains was in order..... but the sudden change of attitude from these 'experts' to me is too obvious...... IMO, they have a vested interest in seeing the market pull back dramatically, so we watch them go from, 'The future is bright', hype to predictions of, 'gloom & doom'.
IMO, all it takes is for one or more of the HOUSES to prime the pump & other HOUSES join right in for a very profitable ride...... This of course emboldens the (retail) bears who will help the situation with their shorts & puts & their negative spin..... weak hands panic & sell while others sell to lock in quickly evaporating profits...... IMO, the advantage to the HOUSES is that they know when many of these turns will happen & they are out at (or near) the tops & in at the bottoms.
Hell, unemployment is at 4.2% & it has been spun as a negative now that it is going up..... Funny how it was so negative (overheating economy & wage inflation) as unemployment worked it's way down to 4%. Now it is a negative for the economy as it heads back to more economically sound levels. Anyone wanna bet that when the HOUSES go positive, we hear about how 4.2% unemployment is a good sign?
Coincidence? I think not.
IMO, this sell off will continue until the NAZ gap is filled (NAZ 2618.55).... FWIW, I expect the NAZ to overshoot to the downside.... perhaps to the 2580 - 2590 range..... I doubt it will suddenly turn around...... perhaps grind around in the 2590 - 2700 range for a while..... to shake out the weak hands..... & margin folks :-( This will likely last through Feb options expiration so the MM's & HOUSES can pocket the cash from selling naked calls & previously sold stocks (from their own inventories) to John Q Public while they were spreading their Bullish view of the world to John & Jane Q.
Then like magic..... the market will rebound suddenly (And most likely without warning)..... while ANALysts & talking heads suddenly & miraculously begin to sing a bullish tune..... of course, this won't happen until the HOUSES have already made their purchases, etc.
To those of you who think that there isn't ANY manipulation by the MM's or the HOUSES...... flame away...... I'm not saying that MM's & the HOUSES are totally behind every uptick & downtick in the market..... however, I believe they are often there to start it..... & to fan the flames as best they can..... in both directions.
Perhaps it is just an anomaly that we see this same thing happen over & over & over...... perhaps not.
I could be quite wrong. However, this is about money. For those who are familiar with the movie, "Treasure of the Sierra Madre", it is a classic about what greed can do to people. Even if you didn't see the movie, I'm sure most folks know how greed can induce less than altruistic actions by people.
BWDIK? At least I feel better after my rant.
OOF :-|
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