Market Discussion

[Stocky2000]

on my filter i got more sell confirms than buys (210 to 48!) (even market was up a lot yesterday) no stocks under 10 dollar running well with good volume...i found 10 stocks to buy with great chart and volume they all are between 16 and 62 dollar....especially food and pharma runs well....

[Stocky2000]

pre market it s the biggest red i have seen this year since the china crash in febr/march....the last days was  distribution probably on very high volume...i trade safe with my daytrades:) ....we hit some resistences like the MA50 of divers composite...

[tokyopua]

Looks like just another "average" 250 point swing in the dow again today.  Sheesh, you know its getting crazy when you get used to a 250 point swing day.

[Stocky2000]

i made my $ 238.- today for 1 hour trading.....i am happy...after that i enjoyed my day with athletic training...

[Houlahan]

hey ket1390
can u share any of your filter results with us sometime?

[tokyopua]

The Fire Portfolio was up today    I actually own mostly those, so I survived today OK compared to what it would have been otherwise... except that I bought NGA yesterday expecting a bounce, could still happen

Anyway, Tech is good here, I believe both for fundamentals and the fact that the money leaving the financials is going to need somewhere to go, so I see a sector rotation occuring now and in the future from Financials into Tech, though I dont hear anyone calling it that as such.  Ecommerce should work well too, thus the strenght we saw in PFSW today.

[Houlahan]

yes, everyone is talking about it's time to move to tech stocks. why? Because of school and Christmas? All the gadgets they make for Christmas/school? some require flash, etc?

[tokyopua]

yes, everyone is talking about it's time to move to tech stocks. why? Because of school and Christmas? All the gadgets they make for Christmas/school? some require flash, etc?

Well, tech starts getting seasonally strong around August and always runs strong till about end of December, almost never fail.  Probably this started due to things like Christmas, etc., but then because a self fulfilling prophecy, as everyone started to "know it was time to buy tech".  But now it seems that big tech companies like Cisco are also benefiting from global expansion, and that adds a new degree of strenght to tech that it doesnt always have.  Plus, if I am right, there will be this sector rotation aspect going on.  But its important to get tech with very strong cash positions, that way they are more immune to this credit crunch situation.

[kslifka]

O.K. Wondering if capitulation is done and time to move forward

[berloga]

The monetary problem happens on paper. Those guys porduce nothing, they only lend money. The companies that are hurt, as Toky points out, are the ones with no cash and poor balance sheet. In the end, the money that the poor bastard-banks lose go to the other banks, like the Citi Group, that actually make money.

I don't understand it, if bank "A" lost money, it means bank "B" made money (unless Joe, who sold his home 2 years ago owned it entirely, which is the case for a very small percentage of homes changing hands). Money does not burn, it changes hands. So, the natural selection theory says, that a poor bastard who lost money made bad choices, and let the smart guy win. This money pumping by the European Central Bank and overnight printing in the US (they have no money, common! ), should help the dust settle.

In my view, we should concentrate on the companies that have good international exposure. US exports are cheap, so it is easy to show good profit in US$. Cisco is a good example, as Toky mentioned.

[tokyopua]

Fed has pumped money into the market today 3 times, first time since Sept 2001 after the terrorist attacks at this volume.  Hmmm, its like a double edged sword.  Good they are doing it, but allows panic to let the market say "why are they doing this now, is there more that we dont know?"  Trump was also on CNBC today, he didnt paint a great picture, thinks a recession is coming regardless of what the Fed does.

Hopefully though, all this panic is just the contrarian indicator to mean we can start going up again.   

[Houlahan]

Feels like Christmas today. RED then GREEN, RED then GREEN. lol
Thanks tokyopua for explaining. I think your right..."It's that time of the year for techs".
Have a great weekend everyone!

[AussieTrader]

Why are Central Banks pumping money into the markets? This Navellier market comment provides a very good overview on what is going on:

Here's the situation. The subprime problem centered a few months ago on lenders deciding to tighten standards on risky borrowers. No big deal. That was prudent risk management. However, many banks began to fear that the subprime losses at many institutions were bigger than they could assess. As a result, some banks stopped lending overnight to each other. Overnight lending amongst banks is necessary at times to maintain cash minimums mandated by their central banks.
When enough banks were reluctant to lend to each other, overnight lending rates skyrocketed, as the lenders were demanding more interest for the unknown subprime losses. The central banks in many parts of the world feared that the tightening of credit could escalate quite rapidly. After all, if banks are reluctant to lend to each other, chances are few businesses could get loans, too, which would force many businesses to liquidate assets.
For example, if a hedge fund can't get short-term cash, it will be forced to sell long positions and cover shorts to raise cash. This happened during the past few days, which is why a lot of fundamentally superior stocks led the sell-off yesterday, and a lot of junk stocks actually rallied. In other words, hedge funds were selling their good stocks and covering short positions in their junk stocks to raise cash.
These liquidations and the jump in overnight lending rates caused many central banks to step in and inject hundreds of billions of dollars into the system to bring the overnight lending rates back down to the central banks' target lending rates. In the U.S., this is the federal funds rate, which is at 5.25%. In Europe, the target rate is at 4.0%.
During the past two days, the European Central Bank (ECB) pumped €155.85 billion ($214.56B) into the system, the U.S. Federal Reserve injected $59 billion, and other central banks around the world added billions, too.
The sudden and massive injection of money into the system caused the overnight lending rates that the banks charge each other to come back down toward their central bank's target lending rates. Basically, these central banks are attempting to prevent credit fear from turning into a 'run on the banks', without having to lower short-term interest rates, as most central banks are still worried about inflation.
In fact, the ECB is in a bit of a quandary. It was expected to raise interest rates by 25 basis points to 4.25% in September. Such a move is looking less likely if the ECB is pumping liquidity in the system.
The Federal Reserve's Federal Open Market Committee, which adjusts short-term interest rates in the U.S., held rates steady this week, and stated that inflation is still its key concern. Nevertheless, it did acknowledge that the market turmoil at hand is threatening its economic outlook for moderate growth.
And when you consider the actions the Fed took yesterday and today, it is becoming more and more likely that a rate cut will happen before November. This morning, the fed funds futures contract was pricing in almost a 50% chance for a 25 basis point rate cut in September, and 100% chance for a total cut of 50 basis points by December.
One pundit is literally screaming for a rate cut right now (i.e., Jim "Scramer" on CNBC). Donald Trump wants the Fed to cut rates by a full point immediately.
Of course, if the markets calm down soon and become satisfied with the liquidity injections, the Fed will try to keep the federal funds rate at 5.25% longer.
Even if the Fed holds at 5.25% longer, we still think it will cut short-term rates sooner than most as energy costs and the core rate of inflation come down. By the way, the July Producer Price Index comes out next Tuesday, and the July Consumer Price Index gets released on Wednesday.
As oil prices continue to fall, despite tightening inventories, inflationary pressures are continuing to moderate and the Fed will soon have the opportunity to cut key interest rates on its terms. We expect that the Fed will cut key interest rates by 0.25% at its September Federal Open Market Committee (FOMC) meeting as the core rate of inflation falls further within its comfort zone.
CONCLUSION
We had a couple of retests of the lows this week, but we could very easily bounce along these levels for several more days. We could even see lower lows, but we think most of the damage is done. In fact, we think the damage has been excessive, and stock prices will snap back once the fear dissipates.
We're already seeing some serious institutional bottom fishing. That's why many of the fundamentally superior small and mid-cap stocks soared today. There were several stocks in this club that were up 10%-20%, and many more up 5%-10%. That's further confirmation that they were oversold from forced liquidations by hedge funds and portfolio managers.

[la-onda]

quotation from DK report ( one of my favorites sides beside shadowtrader Sundays summarization (check Member Corner):

Mega-Turnover

That rumble you hear is trading volume, which is currently tracking at record levels exceeding Wednesday and Thursday's epic totals.
It's very difficult to estimate so early in the day, but for the NASDAQ, EOD suggests the high 3.x billion shares. NYSE is above yesterday's all-time record of 2.8 billion.
Should volume back off from these quick-takes by the close, that would be interesting behavior as well. VIX almost tagged 30 before easing a bit.
A summer to remember for sure.
link:
http://dkreport.blogspot.com/

[babouk]

This is worth looking at 

http://blacklistednews.com/view.asp?ID=3942