Market Talk / March 18th - 24th

Sort by newest Sort by date
Housing sales were up, but so was oil. Iran nabbed some British sailors.
Gee!!!!........:notrust:
 
SANTA MONICA, Calif. (MarketWatch) -- Jim Cramer, the boisterous host of CNBC's "Mad Money," recently bragged in an interview about manipulating stock prices when he was a Wall Street trader, proving all too directly -- and stupidly, I might add -- that investment professionals profit off the backs of the naïve investing public.

Is it any wonder that Cramer showboats?
If you've ever listened to or seen one of Cramer's broadcasts you've heard the proverbial wingnut from Wisconsin yammering on about how his operation "charted" this stock or that by volume, futures activity, price level or some other technical analysis. These are people willingly stepping into the zone with highly trained and highly skilled investment professionals who live and breathe the market; and they play hardball.

Yet many dilettante investors see the show and think that they can play too. Only they play sans equipment and they get hurt.

Cramer was smart enough to realize that the capital markets are played just like a professional sports game. He decided some time ago to become a commentator. So it should be no surprise that he would spill some dirty little secrets from days gone by, such as manipulating futures to get quick gains in the options market, false-feeding the media and taking advantage of the "moron longs" -- all in an attempt to enhance profits and get a bigger bonus at year-end.
"What's important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it's important to create a new truth, to develop a fiction," Cramer says.

http://www.marketwatch.com/news/sto...x?guid={EFABFEB9-4FC7-45A8-A14A-6318372C33E2}

IMHO, he's still doing it. Remember the "calendar tech trade"?
 
Spaf,

Did you make enough money DCAing into our last bottom to buy a new car. So much for being conservative - that was an excellent aggressive approach.

Dennis - permabull #1
 
BEING STREET SMART

by Sy Harding

THE FED'S AMAZING POWER WITH WORDS! March 23, 2007.

As is usual, markets around the world waited in nervous anticipation for the outcome of the Federal Reserve’s FOMC meeting this week. As it has at each of its five previous meetings since last summer, it was a sure thing the Fed would also leave interest rates alone at this meeting. The nervousness was about the wording it might use in announcing that decision. Would it still be more worried about inflation than about the slowing economy, which would lessen the chances for interest rate cuts at future meetings? Or would it show more concern about the slowing economy, which would raise the odds for rate cuts?

Sure enough the decision was to leave interest rates alone. So with no change in interest rates to provide a clear signal of Fed policy, analysts around the world have been trying to glean what they can from the announcement that accompanied the decision. How many, and which words were changed from those used in its announcement after its last meeting in January? Did those changes of a few words indicate what the Fed is going to do with interest rates at its next meeting in May, or the one thereafter, in June?

The Fed’s announcement was not a complex 100-page scholarly treatise. The entire text of the announcement was this:

“The Federal Reserve Open Market Committee decided today to keep its target for the Federal Funds rate at 5.25%. Recent indicators have been mixed and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters. Recent readings in core inflation have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures. In these circumstances, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.”

Within two minutes of the announcement being released, the stock market, which had been dead flat all day, began to soar. In less than an hour the Dow was up almost 200 points. What had the Fed said that made the nation’s publicly traded companies worth hundreds of billions more in aggregate than they had been worth two minutes before the announcement?

Well, the Fed had removed the phrase “additional firming may be needed”, which had been in its January announcement. That is interpreted as meaning that at least it is not leaning as much toward possibly raising interest rates. It also gave a nod of recognition that the housing sector is still having problems. In its January announcement it said “some tentative signs of stabilization have appeared in the housing market.” This time it changed that phrase to say, “the adjustment in the housing sector is ongoing”. That was interpreted as increased recognition of the slowing economy. However, on that subject the Fed’s own wording stayed exactly the same as in its January announcement, when it said “the economy seems likely to expand at a moderate pace over coming quarters”.

More important in my judgment, is that the Fed repeated yet again that “the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected.” And it implied it still does not have a clear picture of what lies ahead for either the economy or inflation, so its policy will depend on future economic and inflation reports as they come out.

So once the usual analysis of the FOMC announcement runs its course, which it probably already has, the market will have to go back to watching each week’s economic reports, which is what the Fed said is all that it can do.

This FOMC meeting, like each of those over the last six months, confirmed that the Fed is in a bind, between the proverbial rock and a hard place. It admits inflation remains its main worry. Its previous 17 rate hikes in a row, which it halted last summer, obviously did not cool inflation off. It would no doubt like to be able to raise rates further. But it doesn’t dare because it has to also be worried about what higher rates would do to the already slowing economy. Yet it doesn’t dare cut rates for fear of what that would do to inflation. Meanwhile, a stock market correction would put more pressure on the economy.

So with a few magic words, it was at least able to stall, and perhaps even abort the market correction, obtaining the same result it would have had by providing an actual rate cut.

However, it looked like it was only traders, not investors that reacted to the Fed’s announcement. Trading volume was even lighter than normal Wednesday and Thursday. That indicated money did not rush into the market from the sidelines at all, that the reaction was only by those already in the market every day - traders. There had been a high level of short-selling in anticipation that the market correction would continue, and the quick reaction to the Fed’s announcement had all the earmarks of a panic short-covering rally. That is, short-sellers rushed to the buy side to close out short-sale positions, to achieve a neutral position, not that anyone rushed in to add to holdings.

Nothing was really resolved in either direction by the Fed’s statement, so volatility will likely continue. That is especially so if short-term traders decide at some point that the Fed’s statement isn’t going to create a sustained rally after all, and move back to the sell side to put their short-sale positions on again.

http://www.streetsmartreport.com/comm3.html
 
Weekly Wrap

Last Update: 23-Mar-07 16:35 ET

It was an amazing week. The broader indices were all up more than 3%. The Dow Jones Industrial average was up every day. The S&P 500 index was up every day except Thursday, when it fell 0.50 points
The tone has dramatically improved as bearish factors such as the Shanghai market plunge, the unwinding of yen-carry trades, and even subprime mortgage problems had little impact this week.
The focus remained on the macro issues. There was very little corporate news of broad impact. The underlying concern about the strength of the economy and whether factors such as housing weakness would lead to a recession remained the main concern. This week, the news was good.
The most important event was the Fed policy statement on Wednesday. The market rallied in advance of the report in anticipation of a softer, gentler stance on the part of the Fed. The market rallied even more after it got exactly that.
The Fed dropped the bias towards tightening that had been in previous policy statements. The phrase that "the extent and timing of any additional firming..." was removed and replaced with "(F)uture policy adjustments will depend on the evolution of the outlook for both inflation and economic growth."
This change in attitude can certainly be considered good news, but it has to be noted that virtually no one expected any Fed rate hike. The removal of tightening bias that no one believed in the first place hardly seems a reason for a major rally. Nevertheless, there is now a stronger expectation that the Fed is likely to lower the fed funds target by 1/4% by the end of the summer.
The economic data this week helped dispel recession fears. On Tuesday it was reported that housing starts rose 9.0% in February after a 14.3% drop in January. February starts were about equal to the average in the fourth quarter of last year. More good housing news came on Friday in the form of a 3.9% increase in February existing home sales. This followed a 2.7% increase in January. At a 6.99 million annual rate, existing home sales are well above the levels of 6.25 to 6.27 posted October through December. The housing market seems to be at least stabilizing.
The only other economic release this week was a reported drop in new claims for unemployment for the week ended March 17. Claims dropped to 316,000 from 320,000 the week before, and levels above 330,000 for a number of weeks before that. The labor market remains strong.
The earnings news was mostly good. Oracle had an outstanding report. Morgan Stanley easily beat earnings expectations. FedEx and General Mills had good reports. Motorola warned of lower than expected profits and revenue. The earnings reports and corporate news overall were of modest impact, however.
Bond yields rose slightly to 4.60% from 4.55% last week due to the good economic news. Oil prices quietly rose to $62.28 a barrel from $57.11 last week.
The market rally was very surprising in both its degree and depth. The nervousness from recent weeks has not been completely eliminated, and could arise again quickly, but was virtually absent this week.
The focus now will shift to some degree to upcoming first quarter earnings reports. Those will start in mid-April. Earnings expectations for the S&P 500 in aggregated have fallen to about 4% from 7% two months ago. Second and third quarter forecasts are close to 5%. The earnings slowdown is here.

http://www.briefing.com/GeneralCont...or&ArticleId=NS20070323163542AfterHoursReport
 
The bull market will power higher as long as people don't start buying into it in droves and as long as the prevailing belief is that it's a cyclical bull within a secular bear.
 
THOMAS KOSTIGEN'S ETHICS MONITOR
Jim Cramer's big mouth
His revelations only confirm what dupes average investors are
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Thomas Kostigen, MarketWatch
Last Update: 12:03 AM ET Mar 23, 2007


SANTA MONICA, Calif. (MarketWatch) -- Jim Cramer, the boisterous host of CNBC's "Mad Money," recently bragged in an interview about manipulating stock prices when he was a Wall Street trader, proving all too directly -- and stupidly, I might add -- that investment professionals profit off the backs of the naïve investing public.
Cramer is just admitting to a game every one on Wall Street knows: professional money managers use retail investors as pawns in their pursuit of high returns -- ridiculously so.

The question is whether Cramer and every other professional Wall Street investor should be faulted for using all the ammunition with which they are equipped -- market knowledge, sophisticated trading schemes, high technology and public relations -- or whether it's the stupid investors who are duped who should be chastised.

It takes two to trade. And on the other side of every one of Jim Cramer's trades is (or was) someone willing to take the opposite bet from him. These aren't the buy-and-hold investors who have money in 401(k)s we're talking about here. These are active traders who step on to the Wall Street game field and think they can outperform the pros. Is it any wonder that Cramer showboats?

If you've ever listened to or seen one of Cramer's broadcasts you've heard the proverbial wingnut from Wisconsin yammering on about how his operation "charted" this stock or that by volume, futures activity, price level or some other technical analysis. These are people willingly stepping into the zone with highly trained and highly skilled investment professionals who live and breathe the market; and they play hardball.
Yet many dilettante investors see the show and think that they can play too. Only they play sans equipment and they get hurt.
Cramer was smart enough to realize that the capital markets are played just like a professional sports game. He decided some time ago to become a commentator. So it should be no surprise that he would spill some dirty little secrets from days gone by, such as manipulating futures to get quick gains in the options market, false-feeding the media and taking advantage of the "moron longs" -- all in an attempt to enhance profits and get a bigger bonus at year-end.

"What's important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it's important to create a new truth, to develop a fiction," Cramer says. Regulators abandon the public His role in manipulation, or whatever it was, should bring consequences. But that should be a minor concern compared to getting the true culprits in all this: regulators.

In the Web interview with TheStreet.com's executive editor Aaron Task, which is on YouTube and has been blasted all around the Internet, Cramer gave advice on how to keep a profit on a short-position by driving a stock price down. He gave a number of different examples of manipulation, which he admitted might be illegal, but said it didn't really matter because "the Securities and Exchange Commission never understands this."
And that is the sad point of Cramer's comments and this column: The people who are supposed to guard and protect the public's trust in the markets are letting the people down. They simply aren't doing their jobs effectively. For years the SEC tried to pin something, in a very public manner, on Cramer. But they could never really make anything stick; he ran circles around them.

There are now thousands of hedge fund managers playing tricks just like the old Cramer used to when he was running a hedge fund.
And regulators are looking on without making a call. And the public still continues to invest like they know better. And hedge fund managers continue to laugh all the way to the bank. Jim Cramer may have a big mouth, but he laughs a lot too.

http://www.marketwatch.com/News/Sto...-4FC7-45A8-A14A-6318372C33E2}&dist=TNMostRead




Tuesday, March 20, 2007
This bizarre interview of Jim Cramer, con man extraodinaire, is widely circulating over the net today: video.
In it, he casually admits to routine market manipulation and openly suggests hedge fund managers do the same if they want to survive, even though it's illegal. We all know it goes on, but it's still sickening to watch, no matter how cynical you are.
A reminder to never believe anything you read or hear from the financial press.

Thank you Jim. I always knew you were kind of sleazy, but at least you're honest about it.

http://aheadofthenews.com/archives/2007_03_01_archive.html


I saw the video, but it has now been removed from the site. ( This video has been removed by the user. ) I turn the audio OFF when watching CNBC. Some of the talking heads on CNBC or ok, but many are way out in left field!

robo
 
Last edited:
The predominant consensus thinking among technicians is that we entered a secular bear during 2000 and the concept is that this bear will last 15 years give or take a paw. There are always cyclical bull markets within secular bear markets just as there are cyclical bear markets within secular bull markets. My thinking has been all along that the secular bull market started in August 1982 and ended temporarily with a cyclical bear market that started in 2000. The cyclical bear market ended in March'03 whence we started a new bull market. This continuation bull market is part of the extended secular bull from 1982. The duration we may be looking at has me defining the move as a mega trend secular bull market. Where will it end is the question - read the link I'll leave from Harry.

http://www.hsdent.com
 
Friday, March 23, 2007
Post Close Comment

A mixed day for Wall Street with the bulls not able to overcome Wednesday's S&P 500 highs and not even able to get a head of steam going for the Nasdaq. As seen in the chart above, S&P 1438 was resistance for a third session. On my market data screen in the right hand column, intraday shows a number of attempts to breach 1438 but to no avail. On the otherhand, no major trouble developed from the failure to break above that level either.

But are their cracks on the horizon? The Philly Housing Index couldn't hold gains as the day wore on. The chart below shows the spurt at 10 when the existing homes sales data came out, but then fade to red. What happened with the Philly Housing Index? The answer is simple. My Realtor wife reminds me that the existing home sales data reflects actual closings in February so the February numbers are actually reflecting handshakes that were done the previous 30 to 60 days before! The headline number spiked the market, then reality set in that the numbers were pretty useless.



We won't see the actual dismal sales activity of February show up in the Existing Homes series until the May figures come out. Isn't that a happy thought.

It was interesting to see a NON-subprime lender go out of business this past week. California based LoanCity is out of business. It specialized in A and Alt-A loans, but couldn't meet tougher warehouse lending standards - and they say subprime is contained?

One group that gave some support - the Trannies. The Dow Transports rose more than 1.6% as railroads rallied again. Intermodal traffic decline last week be damned, there's the ongoing talk of consolidation in the industry, even talk of LBOs. Union Pacific (UNP) was Union Terrific today rising by nearly 4% with active call trading in the Aprils right up to the 115 strike. Volume exceeded open interest in both the April 110s and 115s. But you've got to ask, who would buy a 145 year old railroad company with a stock market value of $28-bln? They obviously didn't ask and just bought UP along with a smattering of other railroad stocks.

Nasdaq 100 (NDX) was simply stuck today, not even trying to make an assault on the highs of the week, same for QQQQ. The bulls completely shunned any try at filling the QQQQ gap between 44.5 and 44.75 following the Wednesday rally. Today names like Microsoft (MSFT), Cisco (CSCO), Apple (AAPL) and Google (GOOG) were out to lunch. Biotech led by Amgen's chemo trial failure was also a large drag and Jabil Circuit, a huge supplier of components to Nokia (NOK) and Cisco was down more than 10% after delivering weak guidance.



Gold was spanked today, but still up for the week. The energy complex was strong with crude and RBOB rising for the week. IF gasoline prices are sustained at present levels, or go higher energy inflation jitters are going to be added to the list of items for Wall Street to worry about. In a place like California, ground zero for mortgage implosion, $3.25 gasoline could be the final straw that pushes more people off the edge.

The most tangible thing all of this meant for me today is that I took my profit on the SPY calls and decided to cash out. I can always jump back in if the bulls manage to mount an assault on 1438 S&P and succeed, but various indicators which I have discussed in various posts have popped up since the Fed rally that have made me decide to dump the SPY calls. Next week is the last week of this quarter so it's time to start looking at things with an eye towards pre-announcements and anticipating guidance and, of course, sniffing out more IEDs in housing.

http://www.buttonwood1792.blogspot.com/
 
Birch,
You posted this two days ago. It is interesting to note that the Dow reached an intraday high yesterday of 12,511.05 before pulling back and closing at 12,481.01. Clearly, the DOW has reached the fib retracement of .618 for the Dow. IMO the DOW is meeting significant resistance here and appears to be ready for a pullback of at least a couple of days, unless economic numbers and positive momentum appear early next week.

Birchtree said:
The fib retracement of .618 for the Dow is 12,508 - could be met today.
Click to expand...
of
 
The fib. .618 has not been met until we close above 12,508. How long do you think it will take the Dow to get to 14,500? With the idea that Primary 3 is still in its early stages of unwinding to the upside as it relates to the NYSE group of stocks, the next three months could be amazing. We will see many multiple 3 digit Dow days in a row in the future. In 2003 of the first leg to Dow ran 3,000 points in less than a year. 2,000 points should be a snap with the 9 month cycle and the 4 year cycle applying positive pressure. Be right and sit tight. Keeping in mind that the center point of three will have the most amount of participation by both breadth and volume related charts. It would be a shame to miss this opportunity. We are already back to new highs on the MCO over a multi year period - all rallies are preceded by declines - the bigger the decline the bigger the rally. The price patterns are going to new all-time highs...you can trust the bull on this one. Snort.
 
I don't want to miss this opportunity either, but I would like to buy some shares at a lower price. I suppose that if we get a pullback, we will be able to buy at lower prices and then wait for the DOW to close above 12,508 to meet the fib. .618 point!!

Birchtree said:
The fib. .618 has not been met until we close above 12,508. How long do you think it will take the Dow to get to 14,500? With the idea that Primary 3 is still in its early stages of unwinding to the upside as it relates to the NYSE group of stocks, the next three months could be amazing. We will see many multiple 3 digit Dow days in a row in the future. In 2003 of the first leg to Dow ran 3,000 points in less than a year. 2,000 points should be a snap with the 9 month cycle and the 4 year cycle applying positive pressure. Be right and sit tight. Keeping in mind that the center point of three will have the most amount of participation by both breadth and volume related charts. It would be a shame to miss this opportunity. We are already back to new highs on the MCO over a multi year period - all rallies are preceded by declines - the bigger the decline the bigger the rally. The price patterns are going to new all-time highs...you can trust the bull on this one. Snort.
Click to expand...
 
Sponsor,

You just missed your chance to buy at lower prices - look what Spaf did when he dollar cost averaged down into the quagmire of the recent lows - that's how you make jumbo dollars. But it takes the courage to fly at tree level because they don't hear you coming and it takes discipline of conviction to buy at the bottoms. Now there are a group of fractal gurus saying that we are in for another big drop this week, sayingsort of a panic is knocking on Wall Street for this week. As a renegade contrarian my thought is it'll be a buying panic of momentus proportions.

Dennis - permabull #1
 
Saturday, March 24, 2007
The Emotional Roller Coaster Of Trading
These past two weeks of trading have me feeling as if I was on an emotional roller coaster because of the swings I've experienced. I came into the week with large open short profits in SPY, DIA and QQQQ only to see them vanish and actually turn into losers. Then I bought some oil and gold and made it back.

I guess when the market gets volatile, the emotional charge (good and bad) increases as the market decides where it wants to go. Obviously the more money we have at risk, the more our emotions come into play.

This past week though really got to me, not so much because of the P/L swings, but because of the strong opinion I had about the stock market going down. Having a strong directional opinion I think is what puts stress on ourselves when reality takes the market in the opposite direction.

So, what can we do to help reduce some of the emotions of trading. First of all I don't think we can ever eliminate the emotions of trading. In fact, if we did eliminate them, some of us might actually not want to trade anymore! That's right, some people enjoy the emotional rush they get when money is on the line. I personally trade to make money. That's my main reason for trading. I also find great satisfaction in trying to figure it out. I view the market as a puzzle and what I'm trying to do is see the picture before anyone else.

So for me the best way to reduce the stress I feel when trading is to not become so emotionally attached to my opinions and to think in terms of probabilities. I don't care how good you are, most people on average are right on about 50% of their trades. I know dozens of large traders over the years, and most of them are correct in the market anywhere from 40% to 60% of the time. Famous trader Steve Cohen said that his best trader in his office is only correct on about 65% of his trades. So 50% in the long run is the average based on my observations.

When I put a trade on, I must remind myself that there is a 50% chance of me making or losing money depending on which way you want to look at it. If I accept that, then when the trade doesn't work out, I'm not going to be stressed out over it because I've prepared myself mentally ahead of time that I'm right on about half my trades. So being aware of this I think is important and can help reduce much of the stress that we all feel when things don't go our way.

Another way to avoid being on that emotional roller coaster, is to not risk more than you normally do. Trading is a marathon not a sprint. If you plan on trading for many years, it's important to stay in the game by adhering to sound money management strategies. If you are trading too large and risking way too much money, not only do you run the risk of blowing out your account, but the stress you will feel when things don't go your way will be enough to get you sick. This is no way to trade or live in my opinion.

So the two best ways to get off the emotional roller coaster is to not risk a ridiculously large amount of money and to prepare yourself mentally ahead of time to think in probabilities and to realize that there is about a 50% chance of being right on a particular trade.

If any of you have some other ideas as to how we can reduce some of the stress and emotions of trading, please feel free to leave comments. This blog is about helping each other so let's make use

http://kevinsmarketblog.blogspot.com/
 
I beg to disagree. Your longer term views simply denonstrate that there are more than one way to skin a cat. I did not miss my chance to buy at lower prices. I was able to test the Ebbtracker and have made great gains. However, since the market does not move up or down in a straight line, I expect to buy again at those small pullbacks and ride the wave back to close above 12,508 to meet the fib. .618 point!!



Birchtree said:
Sponsor,

You just missed your chance to buy at lower prices - look what Spaf did when he dollar cost averaged down into the quagmire of the recent lows - that's how you make jumbo dollars. But it takes the courage to fly at tree level because they don't hear you coming and it takes discipline of conviction to buy at the bottoms. Now there are a group of fractal gurus saying that we are in for another big drop this week, sayingsort of a panic is knocking on Wall Street for this week. As a renegade contrarian my thought is it'll be a buying panic of momentus proportions.

Dennis - permabull #1
Click to expand...
 
You must log in or register to reply here.

Similar threads

tsptalk
  • Article Article
TSP Talk - Where is the October volatility?
Replies
0
Views
252
tsptalk
tsptalk
tsptalk
  • Article Article
TSP Talk -End of the month shenanigans, or the start of another leg higher?
Replies
0
Views
3K
tsptalk
tsptalk
tsptalk
  • Article Article
TSP Talk - Five straight positive months
Replies
0
Views
950
tsptalk
tsptalk
tsptalk
  • Article Article
TSP Talk - The September tumble
Replies
0
Views
3K
tsptalk
tsptalk
tsptalk
  • Article Article
TSP Talk - Is there a shift taking place?
Replies
0
Views
980
tsptalk
tsptalk
Back
Top