Börsipäev 23. september
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Wishing for More Negativism Before Rita
9/23/2005 9:18 AM EDT
"Hope is the most sensitive part of a poor wretch's soul; whoever raises it only to torment him is behaving like the executioners in Hell who, they say, incessantly renew old wounds and concentrate their attention on that area of it that is already lacerated."
-- Marquis De Sade
Downgrades aren't usually a reason for hope but the downgrade in Hurricane Rita yesterday to a Category 4 was enough to convince some buyers that maybe they should be optimistic about the impact. This morning crude oil is down about 60 cents as I write, even though the projected path of the hurricane has shifted right into the heart of the oil drilling and refinery area of the Gulf.
The question we have to contemplate today is whether the market is becoming too hopeful over the potential damage from Rita. Prior to Katrina, we also saw a sharp dip in oil prices, but that quickly reversed when the reality of the repercussions came rolling in the following Monday.
The market is always an interesting mix of emotions and more often than not it expects positive outcomes rather than negative. We see this quite often when a stock trades up prior to an earnings report or conference call.
It would probably be better for the market if it was overly negative in front of the hurricane rather than optimistic. The emotional fallout is usually much worse when high hopes are dashed rather than when bad news doesn't turn out to be as bad as imagined. The market has a better chance of a sustained positive reaction when it overcompensated to the downside but then learns that it has been too pessimistic.
If hope stays high today we have to seriously consider selling it. Despite what the academic literature tells us, the market is not good at accurately discounting future events. Market participants are too emotional of a group to be realistic about how things might unfold; they almost always are too extreme.
The market would be a lot easier if we had continued weakness in front of the storm. We could then anticipate a relief rally next week. Unfortunately, too many people are thinking the same thing and they are all trying to jump in front of the move well before it even sets up. That is why we are seeing the strength yesterday and this morning. That strength is further bolstered by the folks who don't understand it but are loath to be left on the sidelines if the market is going to rally.
We have a tricky day in front of yes, The market is opening close to flat, oil and gold down and overseas markets mixed. -
Olgu siis arhiivi mõttes need kah. :)
Gapping Up
OMNI +17% (continues recent momentum), DPH +15% (Merrill upgrade), BOOM +10% (declares 2-for-1 split), TVIN +8% (wins $1.2 FEMA contract), CD +3.3% (Mad Money mention), MRK +2.4%, GSK +2.1%, BIDU +1.7% (BWeek article quotes Mary Meeker as positive on China internet sector), PBIO +13%... Gapping up on strong earnings/guidance: COMS +6.4%, DRI +6.2%, TIBX +4%.... Under $3: CPTH +23%, DAL +10% (WSJ article: Delta Cuts Deep In Push to Become Low-Cost Airline), ISON +6%.
Gapping Down
Gapping down on disappointing earnings/guidance: PALM -16%, NEW -10%, ORCL -6.4% (down in sympathy: SAP -1.5%), AA -6% (also downgrades from Goldman and Prudential), GTK -1.5%... Other News: IPCR -15% (provides estimate of Katrina impact), FLDR -5.4% (extends yesterday's 15% slide), MATK -5% (Merrill reportedly starts coverage with a Sell rating), HOKU -3.7% (profit taking after recent run), GLD -0.24% (Gold stocks lower on Merrill downgrades of GLG, ABX, and AEM), ABLE -3% (profit taking after recent run), HIH -2.4% (stock offering), DNA -2% (Phase II study of Avastin has been discontinued).... Under $3: FUELW -20% (profit taking after 31% move yesterday), BIOM -7% (delays trial of cancer vaccine). -
Ja siis nüüd chatis mainitud Sharki seletus, mis turg ära ei vaju(nud), kuigi jube laga on mere poolt teel.
Early in the week it looked like the market was going to be very pessimistic and maybe even too negative. If that selling pressure had continued, we'd be set up perfectly for a bounce next week.
Obviously I'm not the only person to consider that possibility. Plenty of other traders are thinking the same way and they want to make sure they don't miss out on that bounce. How do they do that? They do their buying early, and that is what is helping to hold this market up right now. The relief bounce is occurring now because it was so anticipated. -
Huvitav kuidas siis esmaspäev kujuneb kui orkaan oodatust lahjemaks jääb? Päeva alguses kerge ülesminek ja siis massiivne müük?
