bull ready for slaughter...

[scalf]

/images/graemlins/smile.gifnote...this post is just thoughts of scalf, the immortal ghostchaser (hedge fund manager), and uses astrology. key numbers (pythagorus; key greek ratios), and cycles ; at least in part, along with technical analysis to predict major market moves....this is worth what you paid for it...lol

drop from second 1015 spx high looks like four year cycle change (major turn); due 9-15-2003 +- 6 weeks; may be in place.....unless futures lead to 955 and cash to 980.

as expected a/d line action has been "equal and opposite" off march rally of interest-rate sensitive stocks.


we should see nice increase in 52 day lows and decrease in new highs...

we are still in 960-1015 trading range, but bands pinching tighter. bkx clobbered recently; bonds meltdown may slow as profits are taken....

crude oil firming at and above 32....??inflation??

i am betting down...jmho..gl /images/graemlins/shocked.gif /images/graemlins/diamond.gif

[Wildbill]

I would make a large bet oil goes down. Its getting a lot of "noise" right now, things such as Nigeria and bombing in Indonesia, but there isn't really a fundamental reason for it to trade this high. Venezuela is pumping hard, Russia is as well, OPEC is probably cheating again at these prices. Might be my best bet.

Stocks going down isn't much news, they had a big run and now head into really dead season. With no news and only tepid economic news likely until end of September maybe I see a very modest pullback likely, something between 5-10%. Think of it as a way for the market to catch up to actual news. Also a lot of big traders have been making the point that volatility is very low right now, as evidenced by very tight trading band. It will change at some point, just not sure this is the time of year to see it happen. I am out of most positions right now, playing some currencies and shorting oil, I will get back into market more fully in October/November.

One last thing, bonds are starting to get a lot more tempting. I will let the shorts get their profits and then buy in maybe in a month. While the government is buying it up, looks like corporates are slowing down and banks are probably going to sqeeze down on quality when faced with the possibility of a big run up in rates. In short everything will overreact and bonds will settle into a trading range soon enough.

[adios]

I'm betting that tech i.e. NASDAQ is going to go through a very hard correction. Think a lot of stocks in that area are overpriced.

[Mark Heide]

scalf,

I think the market has been bullish due to two factors. First, the unexpected quick war victory in Iraq, and secondly the market usually picks up some steam a year before the presidential election.

Generally, I still think this is a pick and choose market and you better be pretty picky. I consider the market to generally be overpriced and do not see it as a time to get back in yet unless you are looking for value or a combination of value and growth, but you need to be selective.

The unemployment situation is worse than last year, and this also affects consumer confidence. Here's a link to the conference board so you can compare it from last year:

http://www.conference-board.org/economics/helpwanted.cfm

Wall street analyst are predicting growth in retail sales and manufacturing. The retail sales report should be out August 13th and we should maybe have a better grip on manufacturing by September 2nd.

If the market gets disapointed with news during the rest of this month or September, their could possibly be a good time to buy when a sell off occurs and some of these stocks become a good value to buy.

Good Luck

Mark

[AceHigh]

[ QUOTE ]
I think the market has been bullish due to two factors. First, the unexpected quick war

[/ QUOTE ]

I think the summer bull was caused by the end of the war, but not the way you think. Because of the uncertainty of the war the market didn't rise early in the year. Then once the war was over, certainty returned and the money that stayed on the sidelines came into the market. Thus the run up in May and June.

So I think the bull will be in a lull until later this year.

[ QUOTE ]
The unemployment situation is worse than last year, and this also affects consumer confidence.

[/ QUOTE ]

Good point. I think unemployment is killing consumer confidence and that is keeping the economy down. If the job market improves I expect the economy to improve a lot.

[Wildbill]

The worst thing is I think people are taking unemployment numbers to be the gospel but that there are lots of holes in them. A lot of pundits are saying the rate is lower than it should be because a lot of people are discouraged and not in the job market. Well sounds possible, but there are no real numbers on it. Also the rate isn't bad at all in historical terms, but people are highly worried about it more so than the rate should imply. Could it once again be the media and its usual gloom? I don't know, I mean yes the job market is soft and weak, but its not quite this worst in decades situation I have heard bandied about by a select few. Lets face it we all got spoiled by that late 90s job market where people didn't even think much of quitting with nothing lined up and if you didn't get a couple of offers it was a sign you weren't looking hard enough. In the end though there is the important concept of paying attention to what people are actually doing, not what they are saying and I think most indicators are that consumer spending isn't that weak so even if confidence perks up, they are already spending so it won't mean a big difference to the economy when it all shakes out.

[adios]

Just thought I'd mention it as it's on the front page. Yes unemployment rate is low by historical standards and one of the reasons fed started tighening in 2000 was they thought unemployment rate was too low.

[Wildbill]

Oh yes, the good ol full capacity argument. Turns out Greenspan was right, sort of. Productivity continues to be sky high so inflation isn't going to be an issue for awhile it seems. What he was wrong about it was he wasn't careful about what he wished for as the saying goes. He got his low inflation, he got his reduced growth, but now umemployment is all wacky. Businesses are cutting people instead of growing their business. When managers think its better to make the bottom line strong by cutting everything instead of being innovative and growing that top line that isn't good at all and each day it becomes more and more apparent that is the move of the day.

[PraetorianAZ]

I like to keep it simple:

1. There is more bad about the economy and the world than good.
2. Over the past month, we keep breaking short term support lows followed by a rush of bargain hunting. Everyone keeps thinking: "They're just gunning for the stops". No... we're going down because the only buyers are bargain hunters and they're getting tired.
3. Look at the last 3 day upswing. Volume is increasingly weak running right into resistance. This is a screaming signal that we're heading down
4. I'm still waiting for the inverse H&S on the 10 year S&P to continue down. (We're right at the neckline now)
5. We're in a bear market.

I'd compare it to holding AKs (maybe KK) that we're heading south.

[adios]

To complete this thought, upper management seems to me to be stating that product demand is lackluster at best in general thus no need to make a lot of investment. Now one school of thought would be to make the investments anyway in new products etc. and demand will follow. I realize I'm making statements at an abstract, general level.

[Wildbill]

Well Tom, actually what I believe upper management is literally saying is "here you go investors, you wanted earnings so I gave them to you, by cutting out costs". It will kill this economy in the long run though, this isn't deflation by ordinary reasons, ie lack of demand, this is deflation driven by the zest of management to drive stock prices. Really strange stuff and I for one have thought about it over and over and have no clue how you could get out of it. While Henry Ford's concept doesn't always work, at times like this its really true you have to pay enough to your employees so they can spend money and create demand for your products. While it won't necessarily be your products, the point is still there. I guess in the end it could just be a sign of imported deflation, thanks to the Chinese and Japanese, but I am sure the answer isn't that simple.

[scalf]

/images/graemlins/smile.gifmonday 8-18...

scalf and buddy ghostchaser remain bearish....

purely technical price action, low volatility, high complacency, and lack of bullish enthusiasm highlight this market's bearishness....

last spring's war rally is about dead after 26% increase...

6-17 s + p did reach 1015 intraday...then closed at 1012....three weeks later; early july s+p closed near 1008, but mid june highs held...

august , index hit neckline of 965...

fundamentally, s+p at 25 x earnings; 1.7 % div...both very low historically...

valuations very high even 3 years into bear mkt...

vix shows no fear in mkt....

s+p 800 before any concern...

short opportunity of lifetime..gl /images/graemlins/smirk.gif /images/graemlins/diamond.gif