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October 18, 2006
Trolling for retail investors, Wed., Oct. 18, 2006, 9:59 AM
Prior to the open today, the anchors and so-called reporters at CNBC were cheering on "Focus Dow 12000" and making pleas like "Common people, let's drive this thing higher!" I give up.
CNBC has become a parody.
"The Dow has opened up 100 in eight minutes" shouted the anchor, followed by a breathless reporter running around the NYSE floor in sheer ecstasy as she screamed that this price was up and that one up, and so on.
I remember this happening before when Maria Bartiromo was trembling with excitement the day that AOL hit a peak.
Folks, these "personalities" are the take-out specialists for vested interests. I'll leave it at that.
All that's happening today is that Mom & Pop and money managers too are being shaken out of their shorts. That happens before markets fall because the "insiders" don't want to share the wealth they make on the short side.
The conversation between CNBC and various Talking Heads followed that the retail investors is missing huge wealth here, but that's the thing driving this market, yada, yada, ie, the pros and their string-pullers are counting on the public coming in later. That's the cover story to suck people in.
For the rest of the day, I expect CNBC to quote all the economic and market price data they can find to boost their sales pitch. That's what cheerleaders do.
It's funny actually. The same thing happens at every market top.
I even heard one "expert" say that "earnings don't count today!"
Like I say, I give up. Those of us who care about prudence when it comes to trading decisions simply don't have the marketing clout of GE-NBC-CNBC and their keiretsu network. All we have is capital. We have it and they want it.
That is the greatest story never told.
JPM had great earnings c/o Amaranth shareholders, but the stock opened down. CNBC's David Faber reported this situation re JPM-Amaranth. Faber, btw, and Dylan Ratigan, are reporters I do like. The rest are entertainers.
Posted by Posted by Bill Cara on October 18, 2006 09:59:08 AM | Category: Cara Today in the Market
Discourse
just as an observe, no offence:
Bill you sound like a pessimist throwing in the towel. That happens at market tops also, Bears getting out of it.
The current action "smells" not good on the stock market (eg: higher opening after generally good news, but then the buying impetus faded away, strong volume on downside moves in the QQQQ, and on)
We get at least a short term "correction", my cents.
Posted by: Jansing ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
October 18, 2006 11:04 AM [link]
In fairness, they did trot out someone post PPI report (don't remember his name) that was reticent...and stated "if this market turns, don't get in the way".
Posted by: Leisa at
October 18, 2006 11:06 AM [link]
I wanted to post on the "seasonality" comment, but comments aren't allowed. So i'll post here.
Those bullish seasonality figures showing huge gains from Oct 18-Dec 31 over the past 10-20 years are MASSIVELY skewed thanks to numerous large selloffs in Sept/Oct: 1986, 1987, 1990, 1994, 1997, 1998, 1999, 2000, 2001, 2002, 2004, 2005. Just to cite a few.
With the U.S. markets rallying INTO mid-Oct, as opposed to falling into mid-Oct, not to mention grotesquely overbought on the daily/weekly/monthly RSI, this changes everything.
I'm not saying that we can't go higher or that we might even end up with a decent 4Q return. But most of the great 4Q rallies of the past two decades were fashioned out of major oversold Sept/Oct conditions. Hardly the case today.
More likely is that the US markets make a near-term top not much higher than today (if at all) and a selloff into late Nov/early Dec. The election is likely a good fulcrum point.
If we do get a "seasonal" rally, it's likely we've already seen the best of it with perhaps one last leg commencing in Dec, not Nov or late Oct.
Posted by: leewhee at
October 18, 2006 1:37 PM [link]
It's no great feat of prognostication to predict that the market may fall when it has been going steadily up like a rocket for three months.
However, just because the US market is overbought, doesn't mean it has to fall right now. Indeed, reading this blog, I was waiting for Armageddon today. I guess Wall Street will live to see another day.
A smart man once said that the market can remain irrational longer than you can remain solvent. Betting against the trend is a dangerous thing.
Mark
Posted by: BsAs Mark at
October 18, 2006 4:54 PM [link]
i have been short since 11,500 ... this has hurt but i tend to think Sub 11K before 13K.
this is just pure insanity on the DOW.
Posted by: idotri at
October 18, 2006 5:24 PM [link]
i have been short since 11,500 ... this has hurt but i tend to think Sub 11K before 13K.
this is just pure insanity on the DOW.
Posted by: idotri at
October 18, 2006 5:24 PM [link]
Fortunately, I'm not comfortable shorting. I do, however, know how to hold cash.
I'm about half in cash...waiting, just waiting....
Posted by: GemmaStar at
October 18, 2006 11:59 PM [link]
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Dow 12k coincides with another radio ad this morning announcing the "Pulse Loan: If you have a pulse [and the required equity in your home], you will qualify! Bad credit history or in bankruptcy? No problem!"
Posted by: 2nd_ave![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
October 18, 2006 10:23 AM [link]