Nice, bitter rant from Mark-to-Market today. Dude is really piling on the $horts here....(from CapitalStool.com):
capitalstool.com
Mark’s Market Commentary – September 25, 2002
Here in Los Angeles, ALL women with above average figures get the double take.
Without Exception.
It doesn’t matter if they are weirdos, psychos, cross-dressers, transvestites, transsexuals, or mannequins. Whether the woman is 15 or 50, if she’s a looker, all men will stare.
Twice.
On the other hand, some of the “nice girls” handed to the men on a silver platter by way of some type of introduction remain invisible, if she fails to meet the appearance “cut”.
During this bear market, the arena participants are still fixated on “tech” and “financials” to lead their portfolios out of oblivion. It doesn’t matter how bad the fundamentals get, or how high the junk bond spreads reach, or how bad the derivatives meltdowns accelerate. If there is a bounce, the players all jump on the fastest moving stocks in these two groups.
Without Exception.
Same with downside gaps. ALL downside gaps are filled on a retracement. Without exception. It doesn’t matter how low we go, if there is an unfilled gap somewhere on the QQQ chart, you can guarantee that it will be filled.
After 29 months into this bear market, we have yet to experience the large, unfilled gap to the downside. But its coming. Because that is really the only thing which will stop the dip buying madness, and wipe out the “hope” of “tech stocks” and “financials” recovering to their bull market glory days, especially when Maria is constantly bleeting about these two groups whenever there is a gap up on the open.
Today on Proctovision, Bob “Mr. Clean” Froelich was smiling ear to ear when the futures were looking strong. He was so excited at the prospect of the “New Bull Market”. Absolutely no fear there.
Ever notice how the permabulls on TheStreet.com all have the top half of their heads cut off in their pictures? Could it be because most of them are bald, like Jimmy Jones Cramer?
Anyway, I really don’t think we have much pessimism in the market. Instead, we have excitement. Excitement from “Experts” calling for a “Bottom”, like Gary B. Smith:
“A few weeks ago, I proposed a scenario that looked like this:”
“Test July lows. Form double-bottom. Bounce off July lows, ramp, and have big final quarter. Well, so far, we're on track, and now we have to await the exciting conclusion. Before we get there, though, let's see if this double-bottom has "the right stuff." What we're looking for is high volume on one of the lows and six to eight weeks between bottoms. It's perfectly acceptable for one bottom to be lower than the other.”
So there you have it. New Bull Market Hysteria in full force, only one day after a new multi-year closing low on the Dow and the Nasdaq.
Today, we are going to introduce a new special feature to the daily commentary, thanks to Buddhadropping, the Color Commentator on the NYSE trading floor. I think if the Color Commentator was reporting from the pits instead of Art Crashin, the public would quickly learn about the thievery going on each day. Each day, I will attempt to post a summary of some of his observations from the pit so readers can get a flavor for what is going on in the intraday action. Today’s is especially detailed, given the Hockey Stick Hysteria ramp job that took place:
From the Color Commentator:
Ever notice how most of the profitable moves are always made afterhours? Why there is not mass protest and strike on the markets because of this is beyond me. Most of manipulation, jamming, pumping and setups occur afterhours on bogus news 'releases', the coordinated manipulation of analyst and trading desks in the 'houses' and government jamming of futures. There should simply be mass strikes staged to refuse to trade until all company reports are out. In any other industry there would be mass strikes and walkouts until this constant tilting of the keno table by 70 odd degrees is ended.
Note the huge gaming spike already in the Dow. Heat mapping low TRIN melt up, no doubt concentrated buying a few Dow 30 Coke stocks. As predicted yesterday, the Lizard of Oz is daytrading again. Greenspan is jamming the tape the day following the FOMC as he always does. Now it’s him against the hedge funds this morning. I thought he actually might wait till mid morning but not this time, he hasn't daytraded in two days which is a very long layoff for him. Good luck, isn't it fun to know one must trade against their own government constantly in this cesspool?
The outstanding thing I note from that experience is that speculative excess is very rampant in the Markets even after all this damage to the indexes. Gaming is high because margins are high, losses are great, people are doubling down in RiverBoat gambling style thanks to the Lizard of Oz opening the money spigots. So what do they do? They all crowd around the water cooler the day of the FOMC bowel movement as if these old queens had any relevance anymore. They all tune in to watch these octegenarians stage another exciting circle jerk like it was the good ole days. Until people just turn away when the Lizard comes on, until there is nothing but scorn and contempt for this criminal we will not even approach a bottom. When the public is finally told how he handled the credit markets and how he gamed the stock market it will of course be far too late for them. They are the ultimate bagholders in this constant attempt to bail out who the Fed really represents. The large overextended money interests now wading into deep bull manure with little place to navigate, nothing but the stench of past karma that is waiting to be paid.
The Fed has taken its gaming operations off the Indian Reservations again today and into the future pits. Pro traders anticipating the Lizard of Oz are merely frontrunning his predictable tendency to jam all markets the day after the FOMC in order to put on appearances and save face. The guy is so old and so slow, he is now being frontrun on a pretty consistent basis as the Markets breakdown into riverboating moves off of one minute candle patterns and massive short covering meltups in select issues. Again the forecast for close at high of day in trend day up holds.
Note the buying over Chowder hour as the market held its 'gains', this indicates to me panic buying by sharks afraid to be left out of melt up scenario and so willing to chase price up. Would not impart anymore significance to this bounce than all this and the fact that yesterdays lows on the 5 minute DIA candle once 'tested' was the starters pistol going off for the obligatory Greyhound Price Race to the top. Of course we all know that there is no real rabbit leading the hounds, it is just an electric bunny on a stick moved by a mechanical hand, not the real thing at all. Again and again the greyhounds who participate in this wild chase and climb in at the top are the first to realize that they are chasing down a lifeless, bloodless hunk of teaser metal with a couple of fake fur ears strapped onto the top that are flopping around now in the wind.
Credit Bubble and Derivative Watch
We will be taking a different view than the mainstream press with respect to “leading indicators” suggesting future price weakness. We will not be paying attention to Iraq or corporate scandals. The primary drivers we will be analyzing are sentiment and looking for evidence of a conclusive breakdown in the greatest bull market of all time: The Credit and Liquidity Bubble.
Two more supposed “diversified financial companies” were hit today because of subprime mortgage exposure. The ongoing credit market meltdown is gathering steam:
"While the level of prepayment activity of our servicing portfolio remains below the industry average, our existing valuation model and the risk management strategies used to hedge against reductions in interest rates under-estimated the velocity of refinancing due to the rate shocks experienced in the last 30 to 40 days."
Famous Last Words – September 25, 2002
And lastly, this is the “Mother of Famous Last Words”, found on CBS MarketWatch today:
Sharing the pain helped U.S. weather storms: Greenspan
The U.S. economy has been able to weather the storms of the last two years much better because risks have been shared, Fed Chairman Alan Greenspan told an audience in London Wednesday. "Our economy held firm," he said. "Despite significant losses, no major U.S. financial institution was driven to default." Greenspan credited the growth of credit market derivatives with giving the economy the flexibility it needed.
What to Expect Next
The guys over at Elliott Wave International suggested that an unusual chart formation is in the making which suggests that we may be beginning an acceleration down to new lows. As shown in the charts below, many “key” stocks, primarily the ones which are the primary objects of speculation, have tricked the hopers into believing that a “triple bottom” has occurred. However, triple bottoms are a lethal bull hook. After the initial breakdown, there is almost always some type of a retracement back to the breakdown area, and sometimes a “shakeout” by a brief pop back into the former trading range. I believe that we are currently in the shakeout process now. An example of an aging broken down Supermodel, getting “shaken” back into its old trading range:
For those of you who are wondering when I’m going to cover some of these short positions, here are some parameters:
- At least three 90% down days.
- At least two days with negative TICK readings in the –1500 area within a 4 day period.
- Widespread coverage of stock market weakness reported in all major publications.
- At least one major mutual fund failure or closing announcement.
- Climatic selling bottom successfully retested on lighter volume.
The last test was met. But none of the others even come close to providing a buy signal.
Position Summary:
New half short on IDPH at $42
New half short on AMAT at $13 (almost)
We are 76% short, 4% long, 20% cash.
Half Short:
XLNX at $22
CLS at $25
QCOM at $30
DELL at $28
TOL at $27
MMM at $128
COCO at $37.
T at $13
NCEN at $30
PG at $91
CDWC at $46
LEN at $56
COH at $28
IDPH at $42
AMAT at $13
Quarter Short:
FRE at $68
EXPE at $78
MCHP at $33
SBUX at $24
EBAY at $60
NYT at $51
WHR at $78
AMGN at $44
CCR at $49
NVLS at $52
SYMC at $42.
INTC at $31
MBI at $54
PNRA at $34
JPM at $35
YHOO at $19
BBBY at $37
MXIM at $39
THC at $47
KBH at $47
QLGC at $39
Half Long:
BGO at $1.31
HL at $4.10 |
