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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pcyhuang who wrote (53698)	9/13/2011 6:11:30 PM
From: Jacob Snyder	1 Recommendation Read Replies (2) \| Respond to of 95530

Your Market Carpet seems to consistently come up with good shorting candidates. DAL was up the most today. I have repeatedly and profitably shorted the airlines this year, and confidently expect to continue doing so. That industry has many of the characteristics of the memory chip industry: no profits, no visibility, high capital costs, serial "restructuring" and "recapitalizing" events. Some airlines have gone bankrupt more than once, and, amazingly, can still find investors to buy their stocks. Another pattern: you post what happened in the last 24 hours, and I respond with what's happened in the last 10 years: Delta, the nation's third-biggest airline, has been hurt by the recent spike in jet fuel prices and growing competition from lower-cost, low-fare carriers. Less than half an hour after Delta's filing, Northwest Airlines also filed for protection from creditors. Delta and Northwest followed United Airlines and US Airways into bankruptcy. money.cnn.com That's news from 2005. Ancient history, useful because all the reasons they failed, are still true today. Airlines are up today, because oil is down. Oil is down because the global economy is slowing, so demand is getting soft, for oil and all other commodities. Is this bullish? Since emerging from bankruptcy in 2007: On the day after its IPO, DAL gapped down, and has never regained its IPO price. More recently, the 50dma has been resistance since Dec. 2010. The 50dma crossed below the 200dma in February. The brief rally up to the 200dma in May, was an excellent shorting opportunity (I was shorting UAL at the time). The failure at the 200dma confirmed: the trend is down.

To: pcyhuang who wrote (53698)	9/14/2011 5:00:38 AM
From: pcyhuang	1 Recommendation Read Replies (2) \| Respond to of 95530

Has a Greek Default Already Been Priced in the Market? The press of popular opinion works everyone into a frenzy about Greece, the eurozone, a repeat of 2008, Lehman's Part II etc, etc. We all know what happened in 2008 when the world financial system completely froze. However, the fact that many investors are now prepared for something diabolical to happen probably ensures that 2008 will not repeat itself, at least not in the way that the doomsayers are expecting. Let's step back in time and look at how things existed before Lehman Brothers defaulted. This time 3 years ago, 47% of stocks on the NYSE were trading above their 50 day moving average on the NYSE 50 Day Moving Average Ratio. Now there are only 14%. So, markets were in a "neutral" condition in 2008 and now they’ve moved to ‘extreme’ by historical standards. (Click to enlarge) (Click to enlarge) There are other differences. For instance, this time around we’ve been through a "mini-crash" and perhaps entered a bottoming process. In 2008, however, things were slowly drifting down with no dramatic blow-off to indicate the possibility of an exhaustion of selling pressure. (Click to enlarge) (Click to enlarge) Also, some of the selling pressure observed over the last month or so has been more intense than that observed in the crash of 2008. How about U.S. Treasuries? Well we’ve already seen a rather dramatic move in the U.S. Treasury market, significantly more than what we saw in September/October 2008. It seems like the market is anticipating a default before there is a default, which is very different to what happened in 2008 when default by Lehmans and its consequences were not fully understood or anticipated. (Click to enlarge) But fast forward to now and it would seem that the consequences of a default by Greece are fully understood and anticipated by the market. (Click to enlarge) When you consider that yields on Treasuries of varying maturities are already below where they were in 2008 and that the yield of the U.S. 10yr is now almost half that of the rate of inflation, it is hard to believe there could be material upside treasuries from current levels. We must also consider the yield differential between the S&P 500 and U.S. Treasuries. It got to 7% in the height of the crisis in 2008, now it sits at about 6%. So 2008 has already repeated itself to a large extent. Earnings Yield Differential Between S&P 500 and the U.S. 10 yr (Click to enlarge) From an ultra-long term perspective, consumer sentiment is significantly more bearish now than what it was prior to the default by Lehmans. In fact consumer sentiment is just about as bad as it was in late 2008, post-Lehmans. Michigan Consumer Sentiment Index (Click to enlarge) The bottom line is this: the consequences of a default by Lehmans were not anticipated (priced into the market) prior to it happening in September 2008. However, the consequences of Greece defaulting appear to be anticipated by the market, before Greece has actually defaulted. Let’s remember: *it is the anticipation of an event that is critical rather than the event itself. Paradoxically, perhaps the big risk now is of Greece not defaulting, because it is not priced into the market! I will end with Templeton's famous quote: "bull markets are born in pessimism, grow in skepticism, mature in optimism, and die in euphoria"* Source: Seekingalpha.com