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ick, this is bullish?
ISSUE DECLINERS EXCH CLOSE PRICE MONEY FLOW RATIO
(in millions)
SPDR (A) 111.10 -331.1 65/100
Nasdaq 100 (A) 34.55 -206.1 70/100
IBM (N) 85.07 -62.1 56/100
BankAm (N) 88.68 -39.3 67/100
ConocoPhil (N) 72.06 -35.9 58/100
Biomet (Nq) 46.28 -35.8 30/100
Target (N) 44.78 -29.0 51/100
Intel (Nq) 21.95 -28.0 77/100
Merck (N) 46.02 -27.9 75/100
Macerich (N) 52.24 -25.9 24/100
iShrDJUSRE (A) 107.60 -23.8 22/100
DRS Tch (N) 35.85 -23.4 18/100
CoxComm A (N) 33.00 -22.6 27/100
AltriaGp (N) 48.80 -20.8 74/100
Qualcomm (Nq) 38.32 -17.8 76/100
DtscheTel ADS (N) 17.81 -17.5 17/100
iShrMSJpn (A) 9.97 -17.3 31/100
Nextel (Nq) 23.30 -16.2 59/100
iShrLeh20+ (A) 86.39 -15.9 41/100
Gap Inc (N) 19.52 -14.5 76/100
still, there's no counting on the short interest in INTC to get it moving very far ...
i'll be on the "yea" size of that thesis.
greenspan comes clean re RE:
In response to a question about soaring house prices, Greenspan conceded that in some areas prices have outstripped growth in incomes and rents. "This observation raises thew possibility that real estate prices, at least in some markets, could be out of alignment with the fundamentals."
Concern has been expressed in Congress and elsewhere that home prices in some metropolitan areas have shot up at such a pace that they constitute a "bubble," which could burst to the detriment of owners and the broader economy.
Greenspan cautioned that, after a period of very low mortgage rates, it was hard to get a clear measure of home-price rises, but policy-makers were watching the issue.
"As is the case with other asset prices, we monitor real estate prices closely in developing our economic outlook," he said.
http://www.reuters.com/newsArticle.jhtml;jsessionid=W4MJWHHN021WUCRBAEZSFEY?type=businessNews&st...
so i thought there were no triple tops? wasn't that someone's motto? looks like a triple top @ 40 on jcp.
possible, but lately the trin has been a good confirmation/non-confirmation of the jams on the tick. better 2 weeks ago, though, when rising tick would lead to rising trin, though.
unlike yesterday, they haven't been able to get the trin/trinq low today, even with those rally attempts.
Stocks set for crash like 1987, Roach says
Warns of 'Black Monday'
by Ian Karleff Financial Post - August 24, 2004
Global stock markets may have something far more ominous to worry about than the recent spike in oil prices, with one economist seeing a 'Black Monday' scenario in the making.
The United States has been running significant budget and trade deficits for the past number of years -- spending more than it makes, and importing more than it exports -- largely funded by private Asian investors through the purchase of U.S. securities.
The rationale for Asian investors' support outside of making a profit is simple: the purchase of U.S.-dollar denominated securities keeps the U.S. dollar strong, which weakens Asian currencies and keeps products and services from these countries competitively priced.
If the buying stops, the consequences would be dire, and Morgan Stanley's chief economist Stephen Roach has spotted a worrisome trend in who's doing the buying, and it's the same trend that occurred prior to the 1987 stock market crash.
"The funding of America is an accident waiting to happen," said Mr. Roach in his weekly note.
"The day will inevitably come when foreign investors -- already heavily exposed to dollars -- will reassess risk-adjusted return expectations of U.S. securities. That's what happened in the fall of 1987, and there are increasingly worrisome signs of a replay of that same ominous chain of events."
At the crux of his argument is the fact that official buying (by foreign central banks and monetary authorities) of U.S. securities has picked up dramatically, rising to 35% of total net foreign purchases during the September, 2003, to June, 2004, period. This is double the long-term average, and four and a half times the 2000 to 2002 average of 7.6%.
This compares to the January to September, 1987, period when official purchases topped 47% or almost four times the 13% share of 1986, and according to Mr. Roach, history shows that official buying picks up in a "last-gasp" attempt to prevent sharp adjustments in asset prices and to "buy time."
"There can be little doubt as to why foreign policy makers -- especially those in Asia -- have intensified their campaign to support the dollar: lacking in domestic demand and fearful that their external demand support would be eroded by stronger home currencies, they simply can't afford to face the alternative," he said.
Official buying of U.S. securities failed to prevent the Oct. 19, 1987 global stock market crash that saw the Dow Jones industrial average plunge 22.6% in a single day, for the largest one-day drop in history and the erasing of US$500-billion in wealth.
The 1987 crash was blamed on numerous factors including irrational behaviour and program trading.
The Bank For International Settlements noted in its June, 2004, annual report that a contributing factor to the 1987 crash was the sharp build-up of U.S. dollar reserves and the interplay of this with the U.S. current account deficit.
Foreign investors are currently funding the United States' imbalances to the tune of roughly US$86-billion a month over the six months ended April, 2004. Meanwhile U.S. dollar-denominated assets have mushroomed to about 70% of the world's official holdings of foreign exchange reserve, or more than double the United States' share of the world gross domestic product.
This heavy reliance on U.S. dollar reserves makes for a greenback overhang, that Mr. Roach says "is increasingly ripe for a correction."
If the Dow Jones were to suffer a fall of the same magnitude as 1987, it would drop to roughly 7,700 from yesterday's close of 10,073.05, for what would mark a level not seen since the dismal days of October, 2002.
© National Post 2004
re csco: well also don't forget the big sale by chambers on friday and the periodic selling he put in place then for the next 4 years.
and the fact that merrill cut cisco %% in one of its indices to increase yhoo/ebay last week, when they were pricing goog.
lots of bad news for the stock.
wow, so cisco gives ~5000 options per employee.
Cisco grants staff, CEO options
By Chris Kraeuter, CBS.MarketWatch.com
Last Update: 6:05 PM ET Aug. 23, 2004
SAN FRANCISCO (CBS.MW) -- John Chambers, head of Cisco Systems, received 1.5 million stock options Monday as part of a company-wide grant totaling 162 million options, according to a regulatory filing.
All of the options were granted at the stock's closing price of $19.18 a share, Cisco (CSCO: news, chart, profile) said in its filing with the Securities and Exchange. Cisco has 6.93 billion shares outstanding.
Chambers will have the right to exercise his options after seven years as long as he remains president and CEO. A company spokeswoman said other employees wouldn't have to wait as long as Chambers to exercise their options.
Separately, Cisco also announced an agreement to acquire P-Cube, a privately held Internet protocol service provider, for $200 million. See full story.
Last week, Chambers sold $18.6 million worth of his company's stock and filed papers to sell as many as 17.6 million additional shares over the next four years under a fixed-trading plan.
Earlier this month, Chambers had his salary reinstated at $350,000 a year, the same level where it was suspended in April 2001. He reduced his salary to $1 a year until the company's performance improved. He received options during that period.
Chris Kraeuter is a reporter for CBS.MarketWatch.com in San Francisco.
hasn't ntap been at 20.02-04 all day??
"could even be goog management requesting the options so they can hedge against a sharp fall"
interesting point. that SSI report on google management noted that they reserve the right to reprice options, etc ...
so u agree that this smells like one huge scam? ...
(or does that go without saying for "business as usual on the street"?)
"Right, but GOOG will get a pile of shorts when shares can be borrowed."
but even without that, goog actually does have some guaranteed buyers at *any* price, if they can manage to hold it up long enuf.
i.e. its virtually assured to be put into the nazdog 100 and the s&p 500. so every index fund in the world will need a piece.
john hussman thinks about google
August 23, 2004
Google is Probably Worth About $24 a Share
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Personally, I liked the Dutch Auction idea. After a decade of seeing IPOs preferentially allocated to affluent customers, a more democratic auction had some appeal. And with the pop in Google's stock when it opened for trading, there was no apparent “winners curse” for investors who ended up receiving shares. There was also little doubt the stock would enjoy about 72 hours of fun.
But let's get down to business.
[...]
http://www.hussman.net/wmc/wmc040823.htm
hmm. so i guess the only difference right now is that msft is using someone else's search engine, since msn hasn't launched theirs yet. hmm, and comparing the results on the same search, it seems to be yahoo search.
anyway, i don't see what stops msft from using the netscape strategy to strangle google. and if i can think of that, i'm sure the microsoftians have something even more insidious in their minds
speaking of goog: does anyone know how long it would take for a recent ipo to be made part of the nazdog100 and or s&p500? it seems like that sort of thing would be necessary to sop up all those shares coming out of lockup, and the early lockup expiration would pretty much put it in line with entry into nazdog100 around december which - if i remember correctly - was when changes were made in previous years.
overall, though, i can't think of one positive thing about goog as a longterm investment. msft can kill this one so easily, by putting msn search directly into internet explorer and on the desktop. (do they actually have such a thing yet? phoenix/mozilla e.g. has a search bar at the top that goes to your search engine of choice?) anyway, this is the "kill netscape" model for msft. how can they not run it again against google, since its simple and seems like a sure thing ... (and were not enjoined from doing so by the settlement in the antitrust lawsuit.)
anway, looks like goog have a window here in which to become a bit more than a one-trick pony.
I should tell you that I am presently working on more solid and scientific techniques to use for my future prognostications that will effect our finances.
hey, but your experience validated the strategy of listening to your dreams. which isn't *necessarily* unscientific. i tend to rationalize things too much in too many cases, but actually i find i trade better (when i do trade) by "listening to my gut". which i take to mean that there's some part of my brain that's digesting the data and analyzing it and coming up with an answer. and even if i can't verbalize the whole process, it seems to be doing the right thing.
I am saying that when it's "picture perfect" it will be time to exit. It does allow you to walk slowly out the door, rather than run.
ah. can we get that bullish again? to me, that turning point was last jan. i had lunch with some folks at a place i hadn't been to since the last bubble and conversation immediately turned to "what stocks do you own" and "how about that nflx". and i rather sheepishly had to say i had only gold miners and had already sold everything.
are you saying larry and sergey are on the cover this week?
hmm. so price to sales is 20. maybe the market takes it down to a more reasonable (googlish) 16? :-P
Dell Founder Sells $350 Million Of Common Stock ]DELL
08/20/2004
Dow Jones News Services
(Copyright © 2004 Dow Jones & Company, Inc.)
re google. hey, that was fun. now i see the rush you guys get out of trading in these roach motels. could get addictive
so any guesses re ntap? is it being held up or down for opex?
trading on goog looks so odd. like a short squeeze with no shorts ...
Gambling on Google—The Thrilling Conclusion
I bet on the IPO and win.
By Henry Blodget
Posted Thursday, Aug. 19, 2004, at 2:41 PM PT
So I won the Google game. A couple of hours after the market closed on Wednesday, I got a polite e-mail informing me that my bid had been accepted and that I would soon be the proud owner of some Google stock at the IPO price of $85 per share. At 1:04 a.m., I got a second e-mail saying that I had been allocated exactly four shares, one fewer than I had bid for. At noon today, the stock opened at $100 on the Nasdaq. I immediately flipped all four shares. After brokerage commissions and taxes, I appear to have banked about 20 bucks.
What was my "winning secret"? Well, I spent days analyzing financial statements and industry projections and quarterly results and comparable companies and cash flows and valuation multiples and discount rates and customer feedback and … No. I made a few back-of-the-envelope calculations, determined that the stock could be worth just about anything, and concluded that, if I placed my bid at $98, just above the top of the recently reduced $85-$95 price range, the company would be hard-pressed to declare this "speculative" (the initial range was $108-$135, after all), and that, thanks to the dynamics of this type of auction, I would get stock at whatever the IPO price was. I also figured that, given the weeks of Bronx cheers culminating in the near-farcical revelation that the company's idiot-savant founders had thumbed their noses at securities laws by granting a quiet-period interview to, of all publications, Playboy—the company would want to stem the PR bleeding by pricing low enough to ensure the stock popped. Miraculously, my logic appears to have been right. Too bad I didn't bid for 5,000 shares.
(I should add that my first bid, before the company slashed the initial price range, was $113. I should also add that, because I have now sold my shares, the stock is almost guaranteed to rocket straight to $200—at which point I will feel like shooting myself.)
Continue Article
So, what's the takeaway? Did the auction work? Was it a better method than the traditional IPO? Was it more fair, more democratic? Did it discourage speculation? Did it eliminate the first-day pop? Did it crack apart one of the last great price-fixing schemes—the Wall Street IPO cartel?
Sort of. The company's secrecy and arrogance did alienate most of Wall Street—Google management has now learned, presumably, that you don't whip up demand for your stock by making big investors feel that you are doing them a favor by allowing them to buy it. But this alienation probably would have happened regardless. The company cracked the Wall Street IPO pricing cartel, but that doesn't mean smaller and less influential companies can do the same. The company did discourage (some) speculation by shouting from the rooftops that speculators would lose money—before ensuring that speculators wouldn't by pricing the IPO low. The auction did allow little guys to bid and, in some cases, to win, and this—from an entertainment perspective, anyway—was undeniably fun.
This said, in the end, the auction was not, for all intents and purposes, much different from the traditional IPO. The company maintained control over pricing and probably priced shares below the auction "clearing price." Professional investors still got better information than amateurs. (There was lots of scuttlebutt, nuance, and management body language they got access to that you didn't.) Most important, far from eliminating the first-day pop, the company rewarded IPO investors with a gift of nearly $300 million.
And so the fun part ends. Now Google has to prove it's worth $30 billion.
Henry Blodget, a former securities analyst, lives in New York City
well, perhaps which goes where when depends on external factors. here's a data point, from marc faber's site, on historical observations on the presidential cycle and august rallies.
Still, we have to avoid being overly bearish and selling short stocks too aggressively right now for several reasons. Near term the market is somewhat over-sold and the presidential cycle, which tends to produce a rally starting this August, may come into play. According to Bob Hoye (www.institutionaladvisors.com), Ned Davis Research Inc. has done some excellent work on seasonal, presidential, and decennial stock market patterns that are valuable when assessing the upside potential. Based upon data from 1900 through 2000, the best results occurred when the incumbent Republican Party won the election. The worst results were when the incumbent party lost. The lesson is to be cautious if it looks like a Democratic victory.
According to Bob Hoye, ¨the end of August is the optimum point from which the two patterns begin to deviate. Generally there is an interim high mid-August as the markets go through a period of hesitation leading up to Labor Day. Once the Republican National Convention (Aug 30th to Sept 2nd) is concluded, the market will likely cast its vote as to the outcome of the election. History has shown that you want to go with whichever trend becomes dominant following Labor Day”. From the figure below (courtesy Bob Hoye), we can clearly see that in most election years, a rally got underway sometime in August and, therefore, given the current oversold position of the stock market the near term odds do not particularly favor to be heavily short the stock markets.
[Charts]
Moreover, considering the likelihood that the economy and corporate profits will likely disappoint further, I think that bonds may have begun a medium term bear market rally, which may carry long term bond prices up by another 5% or so.
http://www.gloomboomdoom.com/gbdreport/indexgbdreport.htm
schaeffers 2cents
2:09 PM Semis May Continue to Feel Pain
The Semiconductor HOLDRS Trust (SMH: sentiment, chart, options) has been the site of a large amount of call option activity recently, and the pain may not be over thanks to a high level of investor optimism. The trust's Schaeffer put/call open interest ratio (SOIR) has been trending lower to its current level of 0.45, below 99 percent of all readings taken over the past 12 months. Today's option activity on SMH has been no different. The volume put/call ratio is currently 0.59 on heavy activity at the August and September 30 strikes. This type of pessimism amid a strong down trend in the share price can be an indication of further weakness. -JDS
harumph! but they all look so expensive
hey dan, i've been back in gold for a while (via a fund) but now looking at individual miners (cuz of the look of the dollar chart). what do you think looks like a good value here?
"What effect would it have on Oil prices if the US stopped buying foreign oil for one month???"
easier: nobody drives their suv for a month. that sounds almost naderish ...
re brcm ... yet moneyflow on brcm was negative yesterday ...
"Market obviously expecting crude to drop sharply before long."
expiration tomorrow ... so who can tell? ... yet ...
here's something new and interesting. well, to me, anyway. gotten from lee's board.
http://www.dynamicbear.com/moneyflow.htm
interesting excerpts from today ... today vs yesterday is surprising. negative moneyflow on russell 2000 blocks is surprising. neg moneyflow on csco not surprising, given its cut in that MS index. and msft, of course, is under perpetual distribution ...
MONEY FLOW - UPTICK/DOWNTICK TRADING DOLLAR VOLUME
Aug 18, 2004, 4:00 p.m. Eastern Time
MARKET MONEY FLOW (in millions) RATIO
TODAY PREV DAY
DJIA +112.2 +32.7 109/100
Blocks +190.5 +296.7 132/100
DJ US Total Mkt +832.0 +837.6 109/100
Blocks +147.9 +1149.0 104/100
S & P 500 +540.0 +548.7 108/100
Blocks +218.5 +907.5 108/100
Russell 2000 +94.6 +150.6 106/100
Blocks -101.6 +28.6 76/100
....
ISSUE DECLINERS EXCH CLOSE PRICE MONEY FLOW RATIO
(in millions)
SPDR (A) 110.03 -167.7 83/100
Nasdaq 100 (A) 33.85 -46.7 93/100
CiscoSys (Nq) 18.99 -39.7 72/100
CardnlHlth (N) 44.10 -31.0 48/100
FstData (N) 41.19 -26.3 57/100
Microsoft (Nq) 27.46 -23.4 81/100
PrudentialFnl (N) 45.52 -22.9 42/100
ConocoPhil (N) 73.15 -21.9 72/100
Broadcom A (Nq) 30.44 -21.9 76/100
NtlCity (N) 37.13 -21.7 38/100
AltriaGp (N) 48.33 -20.8 71/100
Pfizer (N) 31.85 -20.7 85/100
MicronTch (N) 11.68 -19.5 62/100
ChevronTex (N) 94.17 -19.1 82/100
Saks (N) 12.04 -16.8 39/100
RetailHldrs (A) 89.62 -16.2 79/100
DevonEgy (A) 65.18 -15.9 58/100
WalMart (N) 54.46 -15.9 87/100
SyscoCp (N) 31.71 -15.8 68/100
laff. now what voter would have blamed ryan for wanting to have public sex with her in a french club, i ask you ...
"why do you say it was their intention to take away the pop? did you read it somewhere?"
yes, that was their stated reason for doing the auction. to make it more democratic, but also to get shares into the hands of long term investors who don't merely want to sell on the open.
"it is not in the big brokerages interest for this to go well so i look for them to pull in any favors they can to see taht it doesnt."
although i've been wondering what this new addition is, the allocation of a few million shares to the underwriters for "overallocation". maybe now, behind the scenes, the underwriters are doing what they normally would have done, just using the mechanism of the auction to place the bids?
the biggest mistake google made was to insist that the whole process was meant to make sure there was no pop when the shares opened. that made it entirely pointless for anyone to want to participate in the ipo: why buy when you have less information, just wait until it starts trading ...
"when is google slated to go public?"
they asked for permission today, but apparently the sec is still investigating the playboy interview. personally, i think these requests to the sec are pretty much just nods to the bidders saying "if you intend to bid, do it now." earlier stories were saying that they just didn't have the bids with the earlier price range.
so i guess it all depends on what the sec does and whether they actually get enough bids to sell all of those shares.
previously i was waiting for ~24.10. got stopped out of half of my position on the reversal back up. this time ... i dunno. i'm going to trail it broadly with a stop, but of course i'd hope for the 23-25 range. (there's a gap up down there.)
"YHOO, more down on the way?"
i was up last night when the google news broke (slash price range), and that's almost exactly the same time that morgan stanley came out with the reweighting of their ... whatever index ... to increase the representation of yahoo and ebay and decrease that of csco. yeah, i'm conspiratoriallly minded, but i don't think its a coincidence. there's been too much pump on yahoo lately, with all the comparative valuations going on between it and google.
of course, i'm short from 29+30, so ... grain of salt.