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Börsipäev 12. märts

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  • USA läks nädalavahetusel üle suveajale, Euroopa teeb sama liigutuse paar nädalat hiljem. Senikaua toimub kauplemine USA turul Eesti aja järgi kella 15.30-st kuni 22.00ni. Nii et tuleb nüüd pisut varem ekraanide taha koguneda.

    Will Stocks Play by the TA Rule Book?

    By Rev Shark
    RealMoney.com Contributor
    3/12/2007 8:30 AM EDT
    Click here for more stories by Rev Shark

    "A retentive memory may be a good thing, but the ability to forget is the true token of greatness."

    --Elbert Hubbard

    As we contemplate a strong Monday morning open, the question we face is whether market players are going to forget the nasty bout of selling we suffered a little over a week ago. The selling that occurred was not minor -- there was very heavy volume and we had a level of negative breadth not seen since the market crashed in 1987.

    To simply shrug off such dramatic action as if nothing of importance occurred would be a bit surprising from a psychological standpoint. Market players tend to remember acute pain. When they suffer a shock like we had there is a tendency to cut exposure and reduce risk, which often leads to more selling pressure after a brief rebound.

    The bullish argument is straight-forward: There really wasn't any good reason for us to sell off the way we did. Nothing has changed. The issues with excess speculation in China, the Japanese carry trade, and shaky subprime lending in the U.S. are just minor hiccups that can be overcome by steady economic growth, low inflation and a huge amount of liquid capital looking for an opportunity to snap up bargains. Golidlocks is alive and well so there is no reason we shouldn't just jump straight back up as if nothing occurred.

    The bearish argument is that the sharp dip that we experienced was a warning shot and we'd be foolish to ignore it. The issues that caused the selling are not inconsequential and have not gone away. What we have is just a bunch of hopeful dip buyers who are so used to a market that immediately bounces back from any selling that they are playing that game once again despite a change in circumstances. The bears are convinced the other shoe will drop but the bulls have heard that story many times in the past few months and it has been a consistent loser.

    The technical picture is making things particularly difficult for prudent investors. What we have is a classic low-volume dead-cat bounce after a massive technical breach. The TA "rule book" is clear on this type of action -- it should not be trusted to last. Trapped longs and aggressive shorts should drive the market back to test recent lows and only then will we have a potential buy point.

    Of course, the TA rule book here is painfully obvious to many and as traders position for a further pullback they set up conditions for us to climb the "wall of worry." As we continue to ignore the TA rule book, overanxious shorts are forced to cover and underinvested longs add exposure as they worry about missing out on a run. The irony is that the longer we hold up and the quicker investors forget the recent dip, the less obvious the TA rule book becomes, and the more likely we will eventually see another pullback.

    We are at a tricky juncture right now as finding good entry points is extremely difficult following a low-volume bounce over the past four days. On the other hand, the market is holding in a very stubborn way and if you have rushed to build short positions you are probably feeling some anxiety.

    The key here is to stick to your discipline. Don't chase bad entry points because of concerns the market will go straight up and don't be overanxious about putting on short positions while this bounce remains so stubbornly sticky. Cash and very short-term trades aren't a bad choice at this juncture.

    We have a strong open following strength overseas as the yen weakens and China stabilizes. Good economic data in the UK and Japan also seem to be helping matters. Futures are already off their early highs and we'll see if we are getting the standard Monday morning gap up and failure. A lot of bulls are feeling more optimistic now and that may set up the conditions for the TA playbook to finally work as it's suppose to.
  • Euroopa turud lõpetasid enamasti nullis, Aasiast Nikkei +0.8% ja Hang Seng +1.6%. USA futuurid olid veel poolteist tundi tagasi ilusas plussis, kuid näitavad nüüdseks avanemist ca -0.3% tasemelt.

    Ülespoole avanevad:

    M&A: TOMO +31.2% (confirms US$200 mln buyout offer - FT), DG +27.6% (to be acquired by KKR for $22/share... up in sympathy: FRED +2.8% and DLTR +1.2%), SIE +17.0% (to be acquired by UNH), AKZOY +15.6% (sells its Organon unit to Schering-Plough for $14.4 bln), TRB +3.8% (Sam Zell wants to take TRB private in transaction valued at ~$13 bln, according to Barron's - Reuters), EPL +2.8% (announces self-tender offer for 22% of shares)... Other news: LMRA +32.6% (receives order from Lockheed), TSTC +8.1% (announces contract with China Mobile), RMTR +7.9% (TXN and RMTR announce they advance FRAM technology to 130-nanometer process), IMAX +4.8% (announces deals with Regal Cinemas & Dickinson Theatres; also pos comments from Merriman), KRY +3.6% (Street.com mentions co in article on stock-picking contest).

    Allapoole avanevad:

    Gapping down on weak earnings/guidance: STP -3.0%, TTWO -1.4%... Mortgage lenders down after banks discontinue financing to NEW, as well as other negative headlines: NEW -56.7%, IMH -11.5%, FMT -9.2%, LEND -8.4%, NFI -8.0%, CFC -3.1%, AHM -3.0%, FED -1.3% (see archive for individual news stories/broker calls)... Other News: SCUR -5.4% (downgraded at Goldman to Sell), AMGN -1.3% (downgraded to Reduce at UBS).
  • Päris huvitav kommentaar:

    The Chief Economist of the National Association of Home builders, is interviewed on Bloomberg T.V and says most big companies still have inventory problems, and will not start new production until those are fixed. He said demand, at least temporarily, has stabilized, but inventories are still high. In regards to the subprime market he says the main problems come from the A.R.M's, and he says the percentage of A.R.Ms have been falling, but he not believe the A.R.M problems will spread up in the market.

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