Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I'm thinking aloud here rather than making a prediction, but does the following make sense?
If the US govt prints money to buy its own bonds then that makes more money, which weakens the value of everyone else's dollars, which makes dollar denominated bonds less attractive, which tends to push yields up. So maybe buying bonds wouldn't work to keep rates down. Although it would be an effective way of reducing the public debt.
Perhaps if they updated the scriptures (for whatever reason) then it would help expose religion in general as a man made thing instead of it being, according to my personal views, a tool of man made manipulation posing as God's will.
If the churches are going to openly admit that scriptures are man made then it will be hard to make the case that there is any justification for religion, as opposed to just having one man made sytem being the rule of law.
The way I see it is that greenspan isn't even pulling the bandaid off slowly, he is putting ever bigger bandaids all over the leg.
So what happens if the broker decides to do what they do with collateral when a margin call arrives?
They would try to sell it. But the client is restricted from selling it so the client would be breaking the law by handing it over to the broker.
The broker would have to be willing to accept an IOU backed by the promise of payment when the restriction ends. But what broker is going to accept an IOU due in five years that depends on the future value of a stock?
Would a broker accept the restricted stock as collateral for margin on the short position?
I suspect not. If so, the employee could get a margin call on his short within the five years, then lose on the long position after five years.
Hi, I agree with your comments that BPNDX and BPSPX are not too useful. My reasoning is that they are large caps and tend to move together, thus a high figure can exist close to the beginning of an upmove.
BPCOMPQ however contains many small fry and is more likely to reach a higher value towards the end of a run. I only partially agree that you need to wait for a turndown, history shows that most times just a high level of BPCOMPQ means that a top is nearby. But as Zeev says, dont rely on one indicator, an use stops. Then when you get an excpetion to "most times" you are OK.
I would like to learn how BPCOMPQ and BPOTC differ? Do they have different components? If BPOTC has a larger number of small fry then I think it might be a better on e to use.
Re BPCOMPQ errors prior to 2000.
My memory of this is that BPCOMPQ before 2000 or thereabouts was calculated in hindsight.
The implication is that using this hindsight approach, they looked back at which of the COMPQ components had bullish charts for each day in history. However, the list of COMPQ components was not adjusted to take account of additions and deletions form the index prior to the date of calculation.
That's not a very eloquent explanation so here's an example:
BPCOMPQ for first trading day of year 1998 was calculated using the list of stocks in 2000. So company XYZ was included for calculation. But copany XYZ was on the NYSE in 1998 so shouldn't really have been included.
The errors are worse for BPNDX because that index has significant chages in composition each year.
OT and happy July 4!
Something to do while market is closed...
go to http://www.google.com and type the following words in the search box:
weapons of mass destruction
but don't press "search". Press "I'm feeling lucky" and read the error message.
re "it is not as if there are fundamental reasons for the Euro to be much stronger than the dollar here at these prices and right now"
Hi Zeev, it's just a theory but here it is anyway...
While I agree that fundamentally the Euro economy is as "bad" or worse than US economy, I think the European outlook is better, or at least perceived that way.
The reason is that although factors such as unemployment and generall business climate are pretty bad both sides of the Atlantic, the excesses in Europe are not as bad as in the US. By excesses I mean the amount of debt held by consumers and companies, the deficits run by govts and the (IMO) over inflated levels of stock markets and real estate.
So I think the conclusion is that the euro economies are more balanced and that low interest rates have a better chance of providing real relief, rather than the pushing on a string effect it might have in the US. As an example after the last US rate cut, the actual cost of mortgages went up in the US, but a similarly timed cut in euro rates was accompanied by a corresponding reduction in mortgage rates.
In short, europe will get some gain from its pain, US might have to wait a little longer.
I think that article was a hook for bullishly inclined traders
At the moment the smaller EU members are busy raking in the money. There isn't enough financial transarency for the taxpayers in the larger countries to get too worried about this but with those larger countries now facing their own economic and budget deficit problems, the bottom of the pot is going to be seen.
Then the smaller countries are going to wonder why the ludicrously expensive, unjustifiable and extremely corrupt EU funded infrastructure projects are half finished, and why their taxes have gone up. I don't know when this will happen but it won't be pretty.
I think BPCOMP is a better indicator than BPNDX due to the principle of "junk flies at the top"
I'm not syaing that NDX doesn't contain any junk <g> but the comp has hundreds if not thousands of tiny cap companies whereas NDX is almost all large cap
The flying junk brings BPCOMP to high levels but once the small cap rally has stalled, look out below - and BPCOMP is oftent he first to spot it
Investors Intelligence:
Bulls: 60.2%
Bears: 16.1%
Bears lowest since 1987
Bull - Bear gap sets another multi decade record.
II numbers out today:
Bulls 58.7%
Bears 16.3%
I don´t know how far you have to go back to find such an extreme on the II numbers, but it is more than 16 years.
Hi Zeev,
Any comments on the new memory announced by IBM/Infineon this morning?
Some great promises of DRAM like performance with flash-like ability to retain info without power.
Big news or have we heard this kind of thing before?
http://biz.yahoo.com/rc/030610/tech_infineon_stocks_1.html
Why didn't you tell me there was gonna be a bounce?
I didn't read her piece on new highs either, but have been thinking about this measure (and new lows).
If we stay at this level for another 3 trading days, then Nasdaq will be at a new 1 yr high. That being the case, it seems intuitive that a higher number of stocks will be making new highs and a lower number new lows, than say a previous local top for instance Mar 21 this year. But to my mind that doesn't make this local top any more bullish than the last local top. Am I making sense? I wouldn't be surprised if I am not <g>
Hope u r enjoying your bounce! What are you looking for to tell you bounce is over and time to lay the shorts out?
add today's II advisor bull/bear survey result to the list
56.0% bulls
20.9% bears (11 year low)
A 2 yr $VXN low is still significant. Yes $VIX has been lower and maybe you will get your bounce.
Investors Intelligence survey out today shows bulls have increased and bears decreased since last week. % bears is at an 11 yr low!
today:
bulls: 56.0%
bears: 20.9%
last week:
bulls: 54.4
bears: 23.9
OK, so it's only one of the best shorting opportunities in the last few years, rather than the best shorting opportunity ever. I'll still take it <g>
Anyway, Investor's Intelligence goes back 50+ years.
Augie, you are fussy!
You have record low $VXN
You have record high $BPCOMPQ
You have near record high bullish advisors on II
It's being given to you on a plate and you want a few points of a rebound before jumping in? You might get the rebound, but is it worth risking missing such a well defined opportunity?
I guess i could forgive you for waiting for tomorrow morning's II number, although that will have been taken some 40-50 Nas points higher than today's close.
QQQ is up 11 cents from the close. So if there is a gap and run tomorrow on the HP after hours news then it will be suspect and due to collusion/manipulation in my opinion.
Yes, I am short <g>
Options volume data shows that the majority of the action happens in near month expiries.
As far as such short term options are concerned, "history" is only a couple months long and has consisted almost entirely of a bull market.
What you say about a bear market bottom being accompanied by low $VIX/$VXN sounds like a reasonable argument and I will give it some thought. But we are higher than a few months back so not at a bottom right now leading me to believe it is the retail bulls that are complacent.
I am ready to be proved wrong by the market though, like I have been many times before <g>
Historically, selling puts on your long positions is the "retail" thing to do.
So all else being equal a low $VXN shows complacency - AGAINST THE RISK OF THEIR STOCK BEING PUT - amongst the "retail" put sellers.
As such, I think a low $VXN is far more unbullish than it is unbearish.
Of course, all else might not be equal, but a low $VXN over time like we are experiencing indicates to me a high chance we are at a intermediate term top.
You can watch whether the trades go thru at the bid or ask to see if it was a limit sell or a limit buy being soaked up by a new buy order or new sell order respectively.
If you can't watch in real time then a rising VXN/VIX is a clue that new options buyers are busy and falling VXN/VIX is a clue new sellers are busy. But you have to be careful because calls influence the VXN/VIX values.
I suspect the equity P/C is higher than might be expected at a major top because put sellers are complacent. This is a bearish sign.
What would be the advantages of doing so?
Now that borders have been drawn and lasted for longer than the average human life, wouldn't redrawing them cause more instability.
With a change of regime in Iraq coming up, there will be enough instability. Why add more confusion?
Anyhow, the Kurds are ethnically the same as gypsies found in many European countries. They are a migrant travelling people and as a whole still haven't settled. It is not intuitive to me that borders should follow the movements of people. If there are a lot of immigrants who are Chinese or blacks or Mexicans or Cubans or whatever in a certain part of the USA, would you support giving them their own state to reflect the ethnic make up of the region?
Not only do they not make it, it mainly comes from Switzerland. And the Swiss/French border region known as "Evian" was so called long before the Evian brand.
I don't buy French products myself, tho I have to admit this is the nicest tasting water I have ever tried. As to its chemical qualities, I have no idea. But I do object to the flouridation of tap water.
No longer planning to cover. I didn´t know the planned bin laden rumor was only concerning sons. Rumor alert off for at least a week now.
Media reports are gloomy this morning.
Equity P/C highish yesterday.
Latest II bull/bear showing nearly as many bears as bulls.
Possible bin laden capture rumor coming up in next couple of days.
Time for a bounce for a few days?
I am looking to cover partially today.
"not even a third of the way done"
I have shared your view of impending nas doom due to the excess bullishness that was around early this year. But now the Investor's Intelligence % bulls figure has come down sharply in the last week, on not much of a fall.
This and other less impoirtant sentiment indicators which are also showing increased fear point to more downside, but maybe not as much as you or I were previously expecting.
What evidence of bearishness are you looking for that might warn you that the nassacre is stopping early than original targets?
praps it is on its way to surrender?
Even if assuming no heat was emitted form the Earth (and as no significant part of the sea bed is below the freezing point of water this is not a valid assumption, even as an approximation), then the ice has to float its way to the bottom, sometimes several miles, without warming enough to melt. Considering that it would start to sink the instant it froze, then theoretically, it would instaneously meet water warmer than itself and instantaneously reliquify.
Another way to look at it is as follows: there is a certain amount of thermal energy in the entire ocean. It is receiving energy from its warmer surroundings and from radiation and it is losing heat to its cooler surroundings and by giving off a smaller amount of radiation. Whether ice or water is more dense makes little difference to the rate of loss or gain of the thermal energy.
And one other thing that springs to mind: Warm air rises and air at ground level is more dense than air 10 miles up. But the air at ground level doesn't get cooled to the temp. of the air ten miles up by freezing downdrafts. The same would apply for a significant volume and head of water.
"if ice froze and sunk, the next incremental bit of water on top of the ice would freeze and sink, so as you guessed the oceans and lakes would freeze over and no fish and no plankton"
If ice were denser than water then it would only sink a certain amount until it melted as pressure and temperature increased. So why would ice being denser than water make the layer of ice on the surface any thicker than it already is?
puts being closed is distinct poss. If it were demand for puts then I would expect to see VXN up sharply, but it is down on a flat day for the nas
If they wanted to fake sabotage they woulda blown it up on the launch pad. Would present more feasible cases for external attack such as a missile. Plus they coulda made sure it was empty of people first.
Not that home grown sabotage is feasible anyway. Imagine trying to keep it secret and what would happen if the secret got out.
Last month the shuttle replacement programme was given support by Bush. This could be the real reason for the stock deline.
I was thinking that it might be the proxy declaration of war
I'll take my hat off to you (a virtual hat, seeing as I don't wear a real one) if we get your 1391 or thereabouts.
P/C and VXN showing no fear whatsoever in the face of the decline of the last two days.
Like you said today, sentiment is all important and we seem to be at a bullish extreme even tho price action suggests oversold.
Looks like 5 down days in a row.
Could spiral out of control here if sentiment turns negative and as losses mount. Or is my "panic" a contrary sign?