This is making it even harder this week - the washed out sectors, which I indicated last week seem exhausted of sellers are actually hanging in there. So a paired trade strategy of being short the worst and long the best (very effective over most of the past half year) would actually work against you on BOTH ends in weeks like this. Not only are the good companies imploding but then your short exposure to the bad sectors would hurt you as well. Double jeopardy.
Sort of like investing in a parallel universe where the worst lead and the best suffer...
| Symbol | Company Name | % Price 1 Wk |
| NWA | Northwest Airlines Ord Shs | 45.10 |
| UAUA | UAL Ord Shs | 33.10 |
| CAL | Continental Airlines Inc | 29.00 |
| BEAS | BEA Systems Inc | 24.60 |
| DAL | Delta Air Lines Inc | 18.30 |
| WCG | WellCare Health Plans Inc | 17.50 |
| FAF | First American Corp | 15.60 |
| FRE | Freddie Mac Ord Shs | 15.50 |
| AMR | AMR Corp | 15.00 |
| FHN | First Horizon National Corp | 14.70 |
| ILMN | Illumina Inc | 14.40 |
| FNM | Fannie Mae Ord Shs | 14.00 |
| R | Ryder System Inc | 12.80 |
| LEAP | Leap Wireless International Inc | 12.30 |
| ROST | Ross Stores Inc | 12.00 |
| OCR | Omnicare Ord Shs | 11.50 |
| IAR | Idearc Inc | 10.80 |
| LBTYA | Liberty Global Class A Ord Shs | 10.80 |
| SRCL | Stericycle Inc | 10.10 |
| MCO | Moody's Corp | 10.00 |
| BSX | Boston Scientific Corp | 9.70 |
| IMCL | ImClone Systems Inc | 9.50 |
| DHI | D.R. Horton Inc | 9.30 |
| WEN | Wendys International Inc | 9.30 |
| SIG | Signet Group ADR | 9.20 |
| VRTX | Vertex Pharmaceuticals Inc | 9.20 |
| MER | Merrill Lynch Ord Shs | 9.10 |
| JCP | JC Penney Co Inc | 9.00 |
3 comments:
Very similar to when we had big writeoffs in Dec. and nobody seemed to care. The market is full of very *smart* people who anticipate to a certain point - I would say a few weeks. The problem is that they anticipate wrong most of the time and either with greed or fear. I would not be surprised to see a couple of very dissapointing earning reports leaving some stock misteriously unnaffected in the coming weeks - although some *pofessionnals* might feel obliged to sell because it's the right thing to do...
Once the lethargy sets in, I expect the fed's BS to be heard again, say, by mid-next week.
Expect CNBC to declare that we're saved soon.
Ben B. said today, quote:"We're not forecasting recession but, rather, at this point, slow growth. We believe we'll see below-trend growth certainly in 2008 and probably early into 2009, as well."
When asked about a stimulus package totaling around $100 billion, he said the impact could be "significant," not "window dressing."
Ha! Ha! Ha!
Actually it is quite striking action. I remember writing every week during Sept and Oct "why are we going up?" - why are people not asking WHY the Fed (which was focused on inflation only 2 months earlier) now reversed course. Instead everyone said "don't find the Fed" and stocks ramped up week after week off that August correction. It made no sense to me. It is as if, everything that was being ignored between August lows and Dec 31, 2007 suddenly has mattered since Jan 1, 2008. I find it fascinating but as I was writing the entire time - the equity markets are acting completely in opposite to the bond market in last half of 2007. Bond market was signaling recession but the bulls seemed to just ignore it. I can't recall how many times I started an entry with "I am going to ignore my economic views since the Kool Aid is running high and if the market is going to go up, we have to play along with it". I don't find it strange that the market is finally seeing the light, I am just shocked at how abrupt the change in attitude has been. But this is herd mentality and just like you don't want to be short ahead of rampaging bulls in September and October when they say "we don't care about all the bad news, we just want to go up! The Fed has our back!" you don't want to be long ahead of rampaging bears. Herd mentality both on the way up or down. Trying to time when the herd mentality changes 180 degrees is the difficult part. But the change in attitude in such a short amount of time is absolutely striking.
Ben has lost all credibility to me. Donald Trump seems to have a better understanding of the economy - he said we are in a recession and have been - every housing market outside of Manhattan is basically in the dumps. These guys are SO data dependent - data that is both corrupt (labor reports, inflation reports), and BACKWARDS looking. They do no forecasting and they do not have their eyes open. If people like me without 10% of the data they have access to can see what is happening by just walking around, talking to people, reading how things are in CA, FL, OH, PA, NV, can figure it out - and they cannot.... well it truly is frightening. Like Cramer says, these people are accountable to no one. So they can be wrong as much as they want to, with no repercussions. Ben was saying we were going to be slow through Q1 a while back, then he said through first half of 2008, now he says through early 2009. This is the same guy who said 10 months ago SUBPRIME IS CONTAINED. And then we have politicians questioning him on a subcomittee that they are supposed to be EXPERTS and they don't even know his background. Pathetic system, all across the board. And these are "our leaders". Thank god the country itself is so much better than the leadership or we'd be sunk decades ago.
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