Market pattern shows shades of 2000
If I'm right, we'll all have to deal with a phenomenon that is just getting started.
Is it a collar? Is it a basket? Back in 2000 -- the operative period I am now using for the new tech portion of the Nasdaq -- I used to see the pressure on the whole "complex" like I saw Thursday, and I had a sixth sense of what was going on. I knew someone was getting short or getting hedged against some Internet-dominated positions.
I knew it because of TheStreet (TST). You see, I had made a declaration that I wasn't going to sell any stock into the downturn. Didn't seem right to me. I said that after the lock-up had expired and the stock had come down horrendously from its high the year before. The numbers are so embarrassing but oh, what the heck, you could look them up. The stock was priced at $20, opened in the $60s because of the craziness at the time and then proceeded to go down to the low single digits, where other insiders were still selling.
The brokers, always clever, were telling me that if I didn't want to sell TheStreet stock, they could lock me into a short basket of similar stocks. They said that they could offset my downside. They had come up with other stocks that traded in similar fashion to TheStreet and it would be easy to bet against them to cut off my downside.
I think Thursday was basket day, either for some insider or for some hedge fund. Or for many insiders and many hedge funds that either saw their gains evaporating or wanted to play the downside of a group that had become hapless and weak after having been viciously powerful.
That's how you get remarkably horrible performances from stocks like Salesforce.com (CRM), Workday (WDAY), Veeva (VEEV), Concur (CNQR), ServiceNow (NOW), Facebook (FB), Yelp (YELP) and the like. They all trade together, so they were a natural basket for some entrepreneurial broker to put together.
That can also explain why they didn't and couldn't lift. You can't stop the process in between. The brokers putting on these baskets are indifferent to the declines they are generating, because their only job is to finish the job. That's why it simply didn't matter how low the stocks went. It didn't entice buyers, because has you stepped up and bought, you would have been overwhelmed and gotten a report that was much higher than where the stock was at the time.
This kind of activity went on all the way down in 2000. It never stopped. It was like a hidden cancer that operated on all of the stocks at once. I don't think I would have ever understood it was happening, however, if I hadn't been pitched it.
Sure, it's possible they'll bounce. There were natural sellers everywhere betting that a strong employment number would cause these stocks to get crushed again, because the money needs to go into leveraged old tech with earnings and not unleveraged new tech with insider selling.
But if 2000 is in play -- and I think it is -- someone is now short or hedged against a crash landing for the group. And we all have to deal with a phenomenon that -- if it is like 2000 -- is just getting started and was nowhere near complete at 4 p.m. EDT Thursday.
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Gee, I don't see the parallels... I cannot find 100's of NASDAQ issues with PE's over 50...
The only bubble in the market is the artificially high PE's (18-22 range) boosted by the FED creating money, and it having to go somewhere. Is the market overpriced? Yes, but only due to the FED. PE's and PROFITS remain strong, even if their increases are mostly due to real inflation.
The market will adjust for the FED's printing and rising interest rates.
Remember, in every disaster, their is opportunity. The Lifeboat salesman had a great day April 16, 1912...
Too bad............most of these posts are as nonsense-laden as the article.
So what's the recommendation from Angelo Mozilla's biggest but-kisser?
Whadya say Jim? Put all my cash in the vix?
My Goodness, stop back after a nap and snack, and Markets go kablooyee ...
What the hell happened??
Must have invited the scumbags over for lunch...They killed the NAS..
Lucky if the DOW holds up a 100 for the week.
The NASQ only loses 20..
And S&P about 10 to the plus side, no where near 1900 now..
But the RUT, small caps holding onto a gain of about 30 points for the week...
Have a nice weekend...
I'm thinking it's about time to go to a Casino, got some "free play" and a lunch or dinner...yahoo !
Yeah what is it with Retired Marine.?? Is he psychotic or have a "split personality"..??
Been seeing him/her post elsewhere, and in the replies he calls himself a name or says something degrading about himself....?
Then I believe he/she says that the other has "hi-jacked" his screen name...
I have trouble following all that gibberish..
Maybe they write all that bullshidt to just throw Barry or DLH off....?
Well we started out pretty decent this morning and all the forecasts were for an up day...
Economic indicators all looking okay and comparing to guidance.. U/E although not great still holding steady...
Guess the moneychangers decided to take some profits for the week about noontime.
And we go for a little ride South..
Although for the week the DOW, will rise about 150 points..
The NASDAQ losing maybe 10-15 points....
And the S&P hitting new record territory on a daily basis, should at least be up 10-15 per the week.
Reaching within about 5-7 points of 1900 on intraday highs.
Not a bad week..
pretty good analysis JC ... STRONGLY suggest that everyone watch the cnbc interview with Jim Chanos - just google "Jim Chanos Ultimate Bubble Indicator." imho this was one factor that actually moved the markets today.
and buckle your chin straps for the long train wreck ... it took 18 months last time around ...
Actually barry as I told you before I am a Scottish/Irish catholic ....I think if you look carefully at your son and daughter you will see they are the "sand nggrs" ...put them next to Abdul and Samir the pool boys your wife employs and you will see they look nothing like you !!! :)
Btw Barry don't you love the President now there is talk that one of your heroes - anti-American Zionist scumbag jonathan pollard may be released to appease the pails????
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