|
PureBytes Links
Trading Reference Links
|
RT's,
A little over a year ago Linda Raske and others published S&P seasonals
which showed impressive results for buying in October and selling, I
beleive, April 1.
Here we sit near the end of November at October lows. I read just the other
day, I think in West of Wall Street, that some of the best trades are
counter seasonal trades.
In the past the three years the investing public has seen Aug-Oct selloffs
rally into the new year. Mutual fund investors haven't seen the value of
their portfolios at October intra-month lows. How will they react this year
(not taking into consideration here any significant rally to month end) with
the S&P futures at cycle lows? Will they add selling pressure an already
weak market that sells off into any rally?
Here's the results of the S&P futures contract for the last 3 years compared
to this year:
1997
9-30-97 954.50
10-31-97 924.00 -3.2%
intra-month low 844.00 -11.6% from Sept close
1998
9-30-98 1026.00
10-31-98 1105.2 +7.7%
intra-month low 929.00 -9.5%
1999
9-30-99 1298.20
10-31-99 1376.2 +6.0%
intra-month low 1241.60 -4.4%
2000
9-30-00 1453.70
10-31-00 1440.20 -1.0
intra-month low 1324.80 -8.9%
Current price 1323.00 -8.1% from Sept close.
Wednesday price action was extremely negative in the face of the pre-holiday
expected strength. New lows to new highs were 10-1 !! Nasdaq Down vol/up
vol was 5 to 1 !! Put/Call ratio closed at .69 which is not an extreme.
Most amazing is the Investor's Intelligence Bullish reading INCREASED to a
bearish area at 55% while Bearish sentiment decreased to 28.5%.
The Nasdaq Composite was down 116 on Wednesday. That doesn't seem that
extreme after the volatility of the past year when we regularly had 100+
point up and down days. BUT Wednesday was a -4% chop in one day. The
Nasdaq isn't at 5000 anymore and at these price levels smaller point drops
are just as severe.
A broker friend of mine who has worked for MSDW less than two years can't
beleive how low stocks have gone and that there has to be a bottom here
soon. I pointed out to him that AOL is selling for over 80x this years
earnings. AOL gets 33% of revenue from online advertising which has proved
much less effective than earlier thought AND AOL is the highest priced ISP
around so how in the world can they increase margins???
Then my friend mentioned AMZN. AMZN now is currently bleeding cash and is
trading at 325 times Morgan Stanley's projected 2002 earnings of .08 cents a
share.
Can CSCO raise margins as competition heats up with a p/e of 86. Are
valuations still too high or will they return to their above average
valuations by historic standards?
Some things to ponder,
Happy Thanksgiving
Howard
_____________________________________________________________________________________
Get more from the Web. FREE MSN Explorer download : http://explorer.msn.com
-------------------------- eGroups Sponsor -------------------------~-~>
eLerts
It's Easy. It's Fun. Best of All, it's Free!
http://click.egroups.com/1/9699/0/_/152424/_/975020759/
---------------------------------------------------------------------_->
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxx
|