S&P Watch: A Possible Surprise to the Upside?
I’ve previously detailed my fixes, as well as the fact that we've only covered 2 out of 4 of them. We're still in this dreaded no-uptick world where differentiation is lacking (though signs of it are emerging). Stocks can gap massively lower on very shallow volume, and it just looks like we don’t currently have a Securities and Exchange Commission. I'm thinking particularly of the fact that we haven't seen any cases brought against the practice of naked shorting, despite all the egregious examples of it we saw last year.
Given all this -- and even if you're a bull -- you should have one foot out the door at all times. So I'm saying bye-bye, Broadcom (BRCM), Cisco (CSCO), Suntech Power (STP), Renesola (SOL), and a host of other positions. The one thing I won't do is let massive gains disappear. And everything I sold can be bought back at any price and at any time.
Bottom line, my view on yesterday’s action is that it had nothing to do with any economic concerns -- or with that ridiculous World Bank forecast. I’ve seen stories like that get buried on page 8 -- though, in the past, it would have been seen as a sign of the ultimate bottom-tick call (as I believe it is in fact likely to be). As such, it would have been taken as a reason for the market to rally. We’ve seen this action before, and it’s most disturbing.
By the way, I have no love for days in which we grind away only to see the market spike in 10 minutes or less. Again, the prevailing issues are that we have an improving but still unhealthy set of rules governing the system. This distorts so many things, and is just, well, criminal. Unfortunately, by the time we actually see any enforcement of the rules, we'll be in a wholly different market.
Looking forward, we still have a thin reed of hope, since the NASDAQ might find a solid foothold between 1730-1755. If not, then I think we'll visit the low 1600s. The Dow and SPX are also getting very oversold in the short term, and we have that “mythical” golden cross coming -- though I have no faith in that particular charting alchemy. I do, however, have faith in various moving averages and other indicators, which are all reading oversold. The lower we go, the better the support is.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2009 Minyanville Media, Inc. All Rights Reserved.
after the sub-prime 'well contained' fiasco, I really don't know how they can open their mouths without falling about laughing at the sheer idiocy of the sheeple still actually believing what they say
Naked short selling is a huge stain on American financial markets. It is nauseating that the SEC steadfastly refuses to enforce US securities laws!
Aaron Ashcraft
Barcelona, Spain and Los Angeles
