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Kulicke and Soffa Industries, Inc. Message Board

  • johnmg47 johnmg47 Sep 2, 2009 9:02 PM Flag

    Am I the only one that's confused?

    I rarely write something like this, but I am really in a quandry, and when I see the market trading like it has recently, I think "Maybe I am not alone?"

    I'm finding it almost impossible to go long for more than a trade of a few hours because I think whatever "fundamental" good lies up ahead for stocks is most-likely already baked into the current prices.

    Yet I see stocks like Bank of America (BAC) and Citibank (C) that seem to go up on any whim.

    At the same time I see retail stocks like GES (Guess Jeans) and TGT (Target) that look like space shots, up 30% since July. Why? How could they be at October 2008 levels when they have just gone through 12 consecutive months of declining sales? Doesn't make sense to me. I don't care how much they pound the drum.

    But you try to short anything and the bulls rush in and squeeze you to bits. I can't go long; I'm tired of having the stuffing knocked out of me going short; and I have no idea of what anything is really worth because there are so many counter-vailing macro issues at work, it's confusing. And this thing with the Chinese market is scary. They led us up. They gonna lead us down? Is it a warning-shot across the bow? Remember the last time we said there was a global disconnect, and it doesn't really matter?

    I have NEVER seen a market top out with so much fear of losing profits, so many bears paraded out on TV each day, and so much euphemistic talk about traders being too "Bullish". WHO is bullish out there? I don't hear much of that - at ALL. Everyone I know is running scared: scared of losing profits, scared of getting squeezed, scared of losing opportunities, scared of stepping in, and scared of being out.

    In the last 8 days of August the Dow went up every single day, and on the 1st of September we took out 20 days of advances in a single day's drop. Now No One's buying the dip (like they previously did for months) because they're afraid of getting clobbered; yet many are afraid of going short because of 5 months of getting slaughtered trying that. So the market - today - just sat there in a straight line for the whole day like a coiled spring. Up or down - what's it gonna be?

    And lastly, there's also the pre-ordained anointing of this particular September as being the month the bulls will finally get their comeuppance. That just seems too convenient for me, like ordering a "bear market to go" at a fast food restaurant. Just show up, short, and be profitable. It's September, 2009, and it's pre-determined the market's going to take a big drop. Is it really that easy?

    I will say this, I have never seen a single August in 20 years where you couldn't go away for a month, come back by Mid-September, and still missed nothing. I sometimes wonder if the game is rigged so the guys that go to the Hamptons simply come back after Labor Day and reset the market to July 31st by hook or crook.

    Those who bet against this market are betting that they can fight the Fed, 0% interest rates, fight the Wall street guys who want an up market, fight the Obama administration that wants things to stabilize, and win. Those who are long are betting that things will go up and up and up and discount every bit of future there is; betting that $10TL dollars in debt is no big deal, that 16% under-employment and unemployment is doable, and that the consumer who is worried about his job is going to spend us out a recession. How?

    Maybe these questions are too big - too ultimate - and it doesn't matter anyway. Just tomorrow matters, really, but the behavior at the August top really reminded me of the market's behavior at the March bottom, except the obverse. We had reached the point where stocks levitated, where all news (especially the bad stuff) was good stuff, and nothing could make them go down. The selling on the 1st was like a gun shot in a crowded room.

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    • Man, I couldn't have said it any better. I've been doing this for years and have never seen anything like it. The bulls, which are more prevelant than you stated are betting on the come, which can last forever, while if you short you get killed. Doing research, or homework to short a stock and be right, only to get squeezed by a ceo's bs future hope is brutal. Being long and hoping is even more nerving but with the gov behind the whole move, in my opinion only, to build confidence is probally the right move but I just can't do it. This feels like a suckers rally, but I'm sure we will see 11k on the dow sooner than later. Its tough out there, and confusing to say the least, but I have to say I appreciate all the info here as it is probally the best board out there. I know I'm a newcomer but the info is welcome. Shorting has been brutal but to many stocks have gone up for no reason and that is a bad sign. I still think klic is a buy on pullbacks as the next few qrts. the spin will be positive, but the Mesiah's plan is not warranted here, and I can't commit to the over-all market. Onward thru the fog !!!

    • Sorry about that, that was my wife's handle. Storage !!

    • If you look back at the savings rate after the last recession, it too spiked. Perhaps it will rise higher this time around, but there's no doubt that consumer spending will eventually return (just as it did in 2003) to a level that will start this ball rolling once again.

      I think the market, at this level, is undervalued considering this AND the 0% rates you referenced. The Fed. will be on the sidelines for a VERY LONG TIME. There is just way too much excess capacity in this economy. It will take alot of demand (and time) to fully utilize that capacity. These low rates are here for a good long while. We will not have traditional recession-end GDP-growth of 5-8% and the market will LOVE that fact. The Goldie-Locks economy will return, I believe, with unemployment rates in the 6-7% range ultimately.

      Just about everyone I know has refinanced and many are sitting on piles of cash (in MM funds, of course).
      There will come a time when that money makes its way back into the market. Most of my friends & associates haven't done so and I am certain they are representative of many others. It won't be too much longer (6-12 months, perhaps) until a neighbor, friend or relative relates a story about how well their small-cap or some other fund did in the last year. At that point the markets will really take-off (after which all of us on this board should sell everything, because those who don't are sure to get fleeced once again, no doubt).

      My basic point is that 90% of us ARE employed and most of that number have refinanced or made other moves to improve our balance sheets. What are they going to do with the leftover cash each month, keep it in a MM account earning .25%...I think not! Much of this market rise is taking all of this into consideration IMHO. Hopefully, I am correct....I pray so.


      • 1 Reply to richie90932000
      • It is very confusing right now. Things are very stretched to the upside, doesn't mean they won't keep moving up. Yesterday was a technically damaging day for the markets. Trendlines from the March lows have broken, just a piece to the puzzle. All indicators I follow are advising caution at minimum, profit taking would not be a terrible idea. I've made more money in the last 6 months than I've ever made in any one trading year, I don't feel like giving it back, my accounts are heavy in cash as of yesterday with a nice chunk of 3x bear ETF's. The leash on the 3xers is short, very short. All of my trading buds are scared to death right now, some because they are lagging the markets, some because they have made so much damn money. I think the best advice for traders at this time is flexibility. Have some skin in the game, but also have flexibility to move in or out.

        FWIW, my gut feel, the market is setting up for a moderate correction, maybe down to 900 spx or so, however, I won't let my gut run my portofolio's!

        Good luck to all!

    • Nobody's buying this market , but one thing is obvious, they sure don't want it to go down. Any sign it might sell-off and boom the prop artist show up

    • on htch

    • September 10, 2009 9:54 AM EDT

      Today, Moody's reiterated their negative outlook on U.S. banks, saying asset-quality troubles will force US banks to post substantial additional provisions in 2009 and 2010, making many US banks unprofitable for extended periods and putting stress on capital levels.

      Moody's Vice President an Senior Credit Officer Craig Emrick said, "We do not believe asset quality deterioration for the US banking industry has reached its peak, and we therefore anticipate multiple quarters of losses for a large number of rated banks."

      As first discussed in June 2009, the rating agency expects that US rated banks will incur approximately $470 billion of loan and security losses and write-downs during 2009 and 2010. The lending portion of this estimated loss is $415 billion -- or 7.5% of rated US banks' outstanding loans at the end of last year.

      Higlights from the Moody's report:

      * Through the first half of 2009, US rated banks recorded $70 billion of net charge-offs, or approximately 1.3% of loans outstanding at December 31, 2008. "We expect that US banks will incur $345 billion of charge-offs during the last half of 2009 and 2010, equal to 6.2% of year-end 2008 loan balances, to reach our full estimate," says Mr. Emrick. This compares with the total June 30, 2009 allowance for loan losses of 3.3%.
      * Aggregate non-performers rose to a sizable 4.3% of all loans at June 30, 2009, and 2Q09's total annualized net charge-offs came to 3% of total loans.
      * Provisioning needs resulted in 44% of Moody's US rated banks posting a net loss in 2Q09. However, those banks reporting losses only represented 19% of rated bank loans, illustrating that larger banks were generally more profitable in the second quarter -- mainly due to the capital market activities at these institutions.
      * Asset quality erosion was experienced across all asset classes in the second quarter. "However, commercial real estate has caught up with -- and has surpassed by some measures -- residential real estate deterioration," said Moody's Assistant Vice President Joseph Pucella. For example, commercial real estate non-performers at rated US banks now exceed residential real estate non-performers on a percentage basis (7.2% versus 5% as of June 30, 2009, on an aggregate basis). Charge-offs in these two asset classes were generally equal at 2.5% for 2Q09 (annualized).
      * Within the commercial real estate sector, construction loans -- especially residential construction loans -- have shown significant deterioration. Commercial and residential construction non-performers for rated US banks were 9.2% and 25.8%, respectively, at June 30, 2009, while aggregate annualized net charge-offs were 5.4% and 8.9% for the quarter.
      * Positive trends in the quarter included a slight decline in early-stage delinquencies, as well as stabilization of the ratio of allowance for loan losses to non-performing loans from the first quarter of 2009 -- although at the low level of 78%. Also, equity market access for US banks improved in 2Q09, thereby permitting significant common equity raises. Between 1Q09 and 2Q09, the aggregate tangible common equity to risk-weighted assets ratio for US rated banks increased to 6.0% from 4.8%.

15.61-0.25(-1.58%)Apr 17 4:00 PMEDT