<<All these ANALysts are 18 months late, the market will recover 6 months to a year ahead of their downgrades, and that means we should be buying now. >>
'Analyst's get it wrong too!Goldman's market guru Abby Joseph Cohen and 'the great Henry Blodget of Merrill Lynch'...on equity allocations and Yhoo!!....
The S&P 500 has climbed into the bottom range of the 1260-1280 area, and faces a tough test at the 20 day moving average, very near 1280. The Nasdaq resistance level remains near 2300; its falling 20-day moving average .The gap opening of NASDAQ on March 6 may need to be filled. After Yhoo earning announcement that is very possible. However, 2150 remains a support and 2250 an immediate resistance, finance.yahoo.com^IXIC&d=5d.
Investor sentiments like Put/Call ratio fell to 0.56, a neutral reading. The sudden decrease in the rate of people turning bullish. The creeping doubt is potentially bullish. The CBOE P/C ratio for indexes rose to 1.16, continuing to suggest that the pros are betting against the rally. The combination of rising pessimism with the pros, and a slowdown in bullishness from the public, could help develop this rally in the backdrop of Fed easing stance and tax cuts from the Republicans.
Ideally a break above 2300 will help NASDAQ but it will require all the help from IIX and SOX respectively, this whole ‘tech market sector’ needs a lot going from IIX, SOX if some repairs have to be made on NASDAQ. For that I watch the following two indices i.e. IIX (INTERNET (NEW) (AMEX:^IIX), SOX (SEMICONDUCTOR (XPH:^SOXX) to be above key levels for that big upside break of NASDAQ.
finance.yahoo.com^IIX&d=t 250 area
finance.yahoo.com^SOXX&d=5d 650 area
If one compares the NASDAQ with the Nikkei 225, Japan's market benchmark, presently trading at a multi year low, and interest rates in Japan are near zero. And yet, nothing is happening. In Japan, unemployment is rising. Gridlock has the government paralyzed. And there are signs of panic beginning to build. The only thing missing is the riots in the streets. Is Nasdaq going to see the same fate of Nikkei 225? Although, undoubtedly a great deal of work needs to be done by NASDAQ to get back to its former glory. The index is still some 58% off of its all time high, and about to face a tough test of a nearby resistance level.
Nasdaq and Nikkei a comparison of policies of nations that make or break markets!
The comparison stops on similarity of charts only, if you apply the time line, things are quite different, across the Pacific, Japan's stock market has been in a bear market since 1989, while its economy has been in a Depression and Japanese have been cutting rates to near zero and raising taxes all through these years. Their Financial Minister, who was Prime Minister at one time, Mr. Miyazawa, was quoted on the news wire, as suggesting that Japan could be near a financial catastrophe.
Why is Japan in such bad shape? They have raised taxes in a Depression. Their government is truly corrupt and inept. And their banking system is in shambles. No banking system, and no credibility in the government means nothing good can happen. The situation is hopeless. In contrast U.S. banking system is in good shape, they were not lending big to the internet bubble created in year 2000 and most important the FED has room to cut the rates down as real rates are the highest in OECD countries.
Further to all that the House of Representatives Thursday 8th of March, was poised to pass a major portion of President Bush's $1.6 trillion tax cut, with few Democrats prepared to back the Republican plan. The bill up for approval would lower the current five tax brackets of 39.6, 36, 31, 28 and 15 percent into four brackets of 33, 25, 15 and 10 over five years. It would immediately create a 12 percent tax bracket for the first $12,000 of income for married couples and $6,000 for single people and make it retroactive to Jan. 1, 2001. That rate bracket would be phased down to 11 percent in 2003 and 10 percent in 2006. The other tax rates would start to phase down next year and the new rates would take full effect in 2006. The rate cuts would reduce federal revenues by $958 billion over ten years.
Although, Democrats complain that the administration and Republicans who control Congress are acting too hastily on the tax cut, pushing through a plan they say is too large and would benefit mostly the rich as the tax cut was based on uncertain budget surplus projections of $5.6 trillion, including Social Security money, that may not materialize over the ten-year period. But, the House plans to take up later this year the rest of Bush's tax proposals, including eliminating estate taxes, doubling tax credits for children and providing breaks for married couples. All this rate cuts, with falling interest rates, robust banking sector and huge healthy correction in the stock market of the internet bubble economy, provides an ample background fro a resurgent stock market in U.S. for the year 2001,where Nikkei may continue to suffer.
'Analyst's get it wrong too!Goldman's market guru Abby Joseph Cohen and 'the great Henry Blodget of Merrill Lynch'...on equity allocations and Yhoo!!....
'Mother of all bulls' Goldman's market guru Abby Joseph Cohen told clients the coast is clear and that they should start grabbing stocks as fast as they can. Load 'em up folks! She boosted Goldman's model portfolio to 70% equities from 65%, while taking cash to zero from 5%. (Another 27% in bonds and 3% in commodities). Abby joins the other cheerleaders on Wall Street--Merrill Lynch and Morgan Stanley both told investors to start buying earlier this week.
Soon after Abby announcement Yahoo! said it would break even in the first quarter, excluding goodwill and amortization. Analysts had expected it to earn 5 cents a share. Its first-quarter revenue will be in the range of $170 million to $180 million, the company said, much less than the $232.6 million analysts expected.
Trading was halted on the Nasdaq at 9:37 A.M. EST and never resumed. It opened today at $17.06, down 19% from yesterday's close of $20.94. Its 52-week high is $205.62. Still, Yahoo! has a market value of $9.77 billion, 2000 revenue of $1.1 billion, and a price-to-earnings ratio of almost 700, based on the current earnings estimates.
Yahoo's stock is down about 90% from its 52-week high of $205 5/8. Online advertising, one of Yahoo's biggest revenue sources, is plunging. Company said Q1 revs look like they're going to come in around $170 million. That's way off the $233 million analysts were looking for. One analyst the great Henry Blodget of Merrill Lynch according to Forbes who used to hype Yahoo! and other Internet stocks, issued a report early in the morning suggesting the company might be about to offer an insight into its earnings, after it cancelled an appearance at Merrill's Internet conference.
Forbes highlights that Blodget predicted, 'Yahoo! might have been about to announce a restructuring, an acquisition or a decision to enter into a strategic investment. That pretty much covers the waterfront, so credit Blodget with hedging his bets.'
Forbes today says that it is Blodget's report that apparently led Nasdaq to stop Yahoo! trading. In the last line of his report, Blodget urged Merrill clients, "Let your imagination roam." He also told clients to buy--as he does congenitally.
As it turned out, the least momentous of all possible announcements was in the offing: Timothy Koogle resigned as chief executive, but stayed on as chairman, and the company warned that its sales in the first quarter would be less than predicted. |
