Do you really think a small cap stock like NCEN will explode during the next bull market?
NO WAY. By the time this market turns, the run in small caps will be over.
And when the Fed decides to prick the housing bubble, that stock will take a big fall. Make no mistake about it, housing is on a bubble.
Hey, just because I know this stuff doesn't mean I try to day trade it. As I've said, I quit the short term stuff a long time ago, but you still notice it. And sometimes it helps in choosing long-term opportunity A over opportunities B, C, and D. But usually it doesn't.
Wow. What an interesting morning. The pre-market trades are quite interesting, and the futures have bounced hard off their lows. INTC and AMGN are mostly holding their Friday moves, despite efforts to sell them down a bit in Europe. Maybe I was too pessimistic in my assessment of the market's chances today! Of course, anyone who doesn't think silly games are played in the light pre-market and after-hours trading is being naive, and nothing means anything until we get some volume and see where things settle after the open. But I would add one more thing. There is a general saying that, by the time that government gets around to actually solving a problem, the problem has usually just about fixed itself. Those fixated on issues of corporate honesty ought to think about that given the government's recent flurry of activity. This dog probably has seen its best hunting days.
Of course, for the INVESTORS on this board, none of this stuff matters to IDPH, except as it defines the prevailing winds. The good news for those not looking to buy more is that, even if Rituxan sales only meet expectations, IDPH probably gets a relief rally. When the stock was priced in the 70's, even beating estimates by a penny sometimes brought sellers into the market. But the long term prospects for this company just keep getting better. And that will be true for the company whatever the market thinks about the stock later in the week. This is what the traders who look at numbers just don't get.
In fact, the typical way a bear run ends is on a day like today when the futures are down large, bad news is all over the screen (MRK), and the market opens weak and closes strong. I'm guessing this does NOT happen today, but who knows? The market is a funny place. However, I am sure you are aware of the following:
1. The market likes to put in major lows or highs a few days after the end of quarter. This we may have done last week.
2. Market turnarounds in big corrections tend to come around 11:30 AM when the lunch orders go out. Sure enough, on Wednesday, we had a big buy program that took the Dow from -110 to -20 at 11:30, followed slowly and uncertainly by a reversal from red to green. Then you got the big relief rally on Friday, when the world did not end on July 4. (What a stupid reason to buy or sell stocks.)
3. Market tendencies tend to be revealed on light volume days, not heavy volume days, because there is less arbitrage activity fouling the direction.
4. If one looks back to Fall 1998, we have now put in a double bottom at NAZ 1340 or so. To get to NAZ 1200, you have to go back a few more years. Whether we get there has more to do with the earnings numbers from MSFT and a few other big caps than anything else. I'm more concerned now about weakness in the Russell 2000.
5. Asia is starting to look strong, and a significant component of Asia is technology. There are a few more murmurings in that sector.
As I write this, the morons on CNBC this morning are reminding me why serious investors don't rely on CNBC or IBD for their information. Unbelievable. It has been my hope that either one of the financial networks or IBD would shut down due to a lack of interest; that would be a clear sign of a bottom. However, I don't think we get anything that obvious. Better yet, Worth magazine could go away - what a rag that has become, after a promising start.
All this said, the key event for IDPH in the short term this week is the DNA earnings release on Wednesday. I personally am not doing any kind of short term play before this. However, historically this quarter has been stronger than last, except when you run into the occasional inventory stockpiling issue. Over the last year or so, analysts have lost visibility into month-to-month shipments, which has caused several of them to back off their estimates. After Wednesday, we either get an all clear for the next few months from the DNA release, or a pullback if the numbers look bad that would be a short term covering/long term buying opportunity. Warren Buffett says the only reason he looks at the markets every day is to see whether someone is offering to sell him something of value at a ridiculously low price. Hm.
It would be an odd Monday indeed after a big rally on light volume that did not give back some of the gains. The real test comes when the earnings numbers start to roll out. Until then, it's more of the expectations game.
previous post .... you wait for the
bull market to play the NCENs of the
world. We should all be shorting
now in this bear market or just sit
NCEN is just an example of what I
am talking about. I dont know if it
will be the one.
We will need a follow thru Oneil
confirmation before we start a bull
market ... Then we buy the NCENs of
the world. Not until then.
Make sense ?
You are right in waiting to read charts in the next bull market. However, the easy money has been made shorting this market. It's over, not that the market can't go lower, but shorting now is dangerous.
As much as the shorts and Hedge Funds would love to short the market to the ground, it will not happen. Why? the government will never let that happen. They will continue to print money and promote short covering until corp earnings return. When the bull market returns they will prick the housing bubble.