The main question, I think that we should be asking
is when is the general market storm going to end
(if you believe that the economy and tech sector
is fundamentally sound for the long-term, and possibly
not the short-term (1+ months) ).
Here's an article by *can you recognize who it is?*
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There are no zebras in this game.
Where were the refs when that seller of Chase (CMB:NYSE)
kept pummeling it mercilessly with less than 25,000 shares
in the last five minutes of trading? Why didn't someone
call time out in IBM (IBM:NYSE) when the sellers ganged up
after the company's buy order ran out at 3:30 p.m.? Where
is the commissioner when the sellers in the drugs and
soaps get out of hand on a sleepy summer Tuesday when the
buyers go on vacation?
The answer: They are at the same place you will find them
when the market goes up 100 points on no volume with no
real reason other than one major institutional house was
determined to put billions to work regardless of the
short-term consequences.
Tuesday's action was a travesty as surely a pile-on is a
travesty in pro football. But we must accept that on thin
days, when some major institution is moving out of stocks
and into bonds (no, I don't know who was doing it, but it
was being done), that the dislocations will be monstrous.
Rather than call for an instant replay or demand fines and
investigations, might I suggest that the bullish among you
use days like Tuesday to pick up stocks that you have
waited patiently for but had not been allowed into because
aggressive buyers moved stocks up too quickly?
For instance, last week Becton Dickinson (BDX:NYSE)
announced a major restructuring. It seemed exactly what
the marketplace wanted and the stock took off as it should
have. Now it is back to below where the restructuring took
place. That, to me, says opportunity. I am making my calls
today.
Or Chase. This is a stock that at times feels like it is
going to the moon and can't get out of its own way.
Yesterday's sloppy seller at the close knocked a couple of
points off the stock with no more than 25,000 shares for
sale. I stood there and bought stock. It might go down
again today, but I know I got better prices than if I
always waited until Chase was up five points. I did the
same with Disney (DIS:NYSE). The stock had a vicious
overreaction to the downside off the ABC stuff, which I
think, while consequential, is not disastrous. So I
started buying it. Then the stock rallied to 116 on no
volume last week. Anybody who tried to buy it on Thursday
and Friday was stymied by other buyers who would not let
you in at decent prices. But at 111, down 5 from where the
buyers would not let you in, you could have bought all you
wanted yesterday.
Now, my reflections on yesterday do not mean that we can
expect a turn right back up. Whatever sloppy institutional
seller that was in the marketplace yesterday might come
back in today. Plus, everybody who trades for a living is
getting sick and tired of the morning fakeout as we try
but fail to follow through on strong European buying that,
in retrospect, must come from buyers excited about EMU.
Because there is certainly no carry-over enthusiasm for
stocks denominated in U.S. dollars!
My point: Be glad there are no zebras. If your inclination
is to buy, how much better it is to buy unobstructed by
other buyers than to compete for stock and end up paying
dear prices. If you think, as I do, that the market is
basically okay, then why not dip your toe in, even if you
felt that the overnight rally should have followed through
and failed? As I think we are range-bound, with the
mid-8000s being the bottom of the range, I can't think of
a better time to get started than when some futures
sellers and a large institution coalesce to give stocks
away in the closing moments of a sleepy session. |
