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[Metastockusers] What can we look forward to now????



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Thursday morning the futures were pretty weak. Oil was just shy of 
$45 and some of the early news wasn't so hot. Wal-Mart had beaten the 
estimates but missed the street's sales number. Hewlett/Compaq (HPQ) 
came out of the blue to say they'd miss estimates, lowered forecasts 
and announced management changes. Tiffany missed the estimates and 
warned. Then Deutsche Bank came out to downgrade their view of the 
chip sector saying they could fall 20% more. 

As if that wasn't bad enough, retail sales hit at 8:30 and they were 
less than expected. Coming in at 0.7%, if you took out the rebound in 
auto sales, they were up just 0.2%. We did get some good news however 
since the horrid number from June was revised higher by half. 

The futures weren't in a good mood, but it was our guess we wouldn't 
open terribly and we didn't. Unfortunately I was under the impression 
that maybe they'd defend the flat day we had yesterday and that just 
wasn't to be. Oil had another run and broke over 45. Then in Spain 
there were two small bomb blasts that supposedly were placed by the 
political activists ETA. Between the bombs, oil, HPQ, and several 
other warnings, the market just couldn't do anything right. We ended 
down 123 on the DOW, 29 more on the techs. 

What a mess this has been. Every attempt at a bounce has been 
squashed. We are terribly oversold according to several technical 
indicators, yet we just get more oversold. This is winding the 
spring, stretching the rubber band. When it snaps back, it could be 
violent. But when?? 

After the bell DELL released earnings and they were really good. They 
beat all the numbers on tremendous growth. Yet the initial reaction 
was a quick sell as it always is lately. Thankfully it turned around 
quickly and went positive. 

We expected Thursday to be slightly green and the "start" of a decent 
bounce higher. Instead the above factors kept a big lid on us. Very 
frustrating. 

You all know that in the long run we expect the market to be lower. 
But frankly we are at a loss to understand why we haven't been able 
to put in a decent bounce lately. Yes the numbers stink lately, yes 
there is terror, yes oil is soaring. But guess what? It's during the 
silly periods like that where we usually see the market climb that 
mythical wall of worry. It's when one side of the boat gets so 
crammed the boat rolls all the way over to the other side. 

Well, the market is crammed full of shorts. Short interest is at 
enormous levels. The news has all been bad and getting worse. We've 
not witnessed a better market environment for one of those "fly in 
your face, short crushing, short squeezing, breathtaking runs." Yet 
it has not come. This is both overdue and very odd. 

If you've been smart enough to be short during all this we tip my hat 
to you because the fear of a massive snap back rally has kept us from 
going short and sitting on it. Obviously short has been the way to be 
lately and I congratulate those of you who've done it. So, are we 
going to do it now? Jump wildly short? Not on your life. 

Maybe Friday, maybe Monday we are to see a massive capitulation dump. 
That would be much more welcome than this penny ante grinding lower. 
But without a great signal to go long, or a great signal to go short, 
we are trapped just hunting and pecking trades. Frankly we are tired 
of this chop. 

What about Friday? If oil stops rising and no one blows up in the am, 
we think we might downdraft after the open and reverse back to flat 
or even slightly green. But in this silly market nothing would 
surprise us.. If we were to get a 150 point sell off, we'd say buy it 
up. If we got a 150 point up day we'd say give it a day to cool off 
and buy it up. But a lackluster day where we close up or down 40 
points? It tells us nothing. Just continue to hunt and peck. 

http://clix.to/wallmann



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