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July 20, 2006

The picture 24 hours later, Thurs., July 20, 2006, 3:29 PM

What a difference a day makes. Twenty-four little hours. Brought me the clouds and the rain where there used to be sun. (Doing it my way: apologies to the original songwriter, in any event.)

Don't you love it when Bill Cara can stand on the railway track, with the Dow steaming along up +222 points, and say: "This rally will fail. Don't let these sales people put dreams into your head."

That was over 80 Dow points higher. But who's counting anyway?

Aren't you happy to have me along for the ride?


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Posted by Posted by Bill Cara on July 20, 2006 03:30:00 PM | Category: Cara Today in the Market

Discourse

Just puzzling over the OIH breaking down while everything is going right for oil. Are stock traders reading 'recession' in the numbers? Or did they read WFT comments today on 'essentially' flat outlook?


As I recall ALL sectors provide negative returns for the 6 months following a major energy peak. I think it was Birinyi that had a study on this. Looking at monthly charts on the service stocks they appear to be rolling over from the 'distribution ' zone.

Oh, wait. Not to worry:


Jim Cramer
OIH at $135
7/20/2006 2:02 PM EDT

Oil Service Holdrs (OIH) tick at $135 -- which should be the bottom -- buy Halliburton (HAL) and Nabors (NBR) and Schlumberger (SLB) right here, right now.

Position: Long HAL, NBR

Posted by: stockman [TypeKey Profile Page] at July 20, 2006 3:51 PM [link]

Good call, Bill. It's just amazing how volatile stocks are in this market.

Your take on today's gold action is also going according to script. Maybe we'll see that test of 620 early tomorrow?

Posted by: number2son [TypeKey Profile Page] at July 20, 2006 3:52 PM [link]

LOL. it WAS a gutsy headline. i thought we'd rally for a couple of days at least.

even now, i'd say that this is an acceptable pullback if it weren't the return of carnage in some important areas....like transports. the daily chart on transports is just plain scary.

Posted by: mtzion [TypeKey Profile Page] at July 20, 2006 3:56 PM [link]

stockman,

ive said it previously about the OIH...it lags the e&p stocks but what troubles people from stepping in is the earnings comps going forward...they're not as compelling. we had $70 oil last september...the numbers wont be as impressive as they were in 1q06 and 2q06.

id be hard pressed to feel comfortable going long in this market. i shorted the hell out of yesterday and did quite well today...still going short.

Posted by: jpp10780 [TypeKey Profile Page] at July 20, 2006 4:03 PM [link]

Looks like Bill's fully recovered from his stomach flu. We'll have to confirm by seeing if his treadmill is really as fast as it looks. Nice call too, btw, on the retest of $620 by gold, which we got twice overninght. :)

I'm a little surprised at the swiftness of yesterday's reversal. The market was, as has been said, very oversold, and this is all we got in terms of a bounce? It's also freaky how sentiment hangs on the breath of Bernanke. How some can be even thinking this is still a bull market escapes me.

Homebuilders were absolutely brutal yesterday. Much of tech was knocked back down, despite some good earnings numbers. Dell just warned of a massive next quarter earnings shortfall. Interesting times to be sure.

Excuse me, I think I'll go buy a T-bill.

Posted by: doug11 [TypeKey Profile Page] at July 21, 2006 9:17 AM [link]