one persons opinion on a TECHNICAL read
+Brookelise (1148 )
From: +Osci
Tuesday, Oct 20 1998 11:37PM ET
Reply # of 1150
Brooke,
Dell gapped up, couldn't go higher, broke below yesterday's low, and is near 51
support. If Dell had gapped down, it would have likely gone up today beyond Fri's high.
But it didn't, and probably there's meaning in this. Perhaps 51 won't hold and instead of
trending, Dell will congest between 41 and 60.
This is the second inside bar on the weekly chart, breaking below the first inside bar will
cause suspicion we go lower. It doesn't mean a downtrend is taking shape yet because
we're within the range of that expansion bar from 3 weeks ago. It will likely be which
side of that bar we break that determines direction. Dell is an excellent buy in the low
40's so it's not likely to break down easily. The uptrend is very much intact at this point.
Osci
-----------
New hedge fund woes crop up, worry stock market
By Jennifer Westhoven
NEW YORK, Oct 20 (Reuters) - Talk that another hedge fund, this time Paloma Partners
Management Co., had hit hard times contributed to a late sell-off in stocks on Tuesday, traders said.
The fund declined to comment on losses, but hedge fund sources said rumors that Paloma is in trouble have been circulating
recently. One fund manager said word around the hedge fund industry was that Paloma had lost 20 percent in August and
September.
The Dow Jones industrial average, which reached as high as 8652 earlier in the day, up 186 points, sheared its gains late in the
session to close a paltry 39 points up at 8505. Some traders said that, in addition to a late slide in technology stocks, the hedge
fund talk might have worried Wall Street.
A source familiar with Paloma said any rumored losses would be nowhere near as large as headliner Long-Term Capital
Management, which shocked markets when a group of 14 firms shelled out $3.6 billion to prevent the fund from going under.
Paloma, for its part, would not confirm any statistics about its performance, or any details about its size.
''I can confirm that Paloma was an original investor in D.E. Shaw Investments, which is different from D.E. Shaw Securities,''
said executive vice president Leon Metzger from Paloma's headquarters in Greenwich, Conn.
He said that, although the two Shaw entities had some overlapping strategies, he believed D.E. Shaw Investments took less
risky positions and was less leveraged than D.E. Shaw Securities. D.E. Shaw Securities Trading became a source of high
anxiety last week after BankAmerica Co. (NYSE:BAC - news) had to write off part of a loan to the firm.
The rumors of trouble at Paloma could just mean an unusually big loss, or worse, that its banks and brokers are forcing it to
liquidate some positions, another industry insider said. The fund could have as much as $4 billion under management, he said,
although that figure could include some leverage, or borrowed money.
Banks have started to ask hedge funds for additional capital, or margin, in the wake of the loss posted by Long-Term Capital
Management. Like Long-Term Capital, Paloma, uses a variety of bond arbitrage strategies, keeps a low-profile, and has
billions of dollars under management.
''It's possible that Paloma, with an excess of hubris, used too much leverage,'' the industry insider said.
On the other hand, the source doubted Paloma's long-time chief executive, Donald Sussman, would over extend himself.
''He is a very conservative...individual,'' the source said. ''It would be very surprising if he took a lot of risk.''
Paloma has its own traders, but also places money with traders outside the firm, the industry source said. |
