It has been a couple of weeks since I posted anything (Devil has loved my silence) so we will take a crack at analyzing some of the craziness that has occurred.
SIRI had a wild week of trading and everyone on the board is focusing on that wild 30 minutes where the stock went up 10% yesterday. Hellbent and I exchanged posts last night and he got it 98% right (congratulations to him) but even he missed the big picture.
Yesterday's little pop actually goes back to Wednesday. Remember the Goldman warning about SIRI from Anothony Noto which caused the stock to drop from 2.97 to 2.67. The purpose of that note was to wipe out all the stop loss orders that had been placed by people who bought SIRI in the run up between Oct. and early Dec. Most of these late comers did not want to lose more than 15% so in went the stop loss orders and the MM picked them off like ducks in a shooting gallery.
That brings us to yesterday's 30 minute runaway. The new shorts (after Wednesday) all shorted below $2.97 after the Noto note but they are concerned that a DOJ pronouncement could send SIRI skyrocketing so they put in stop loss orders to cover their shorts and the MM who picked up a bundle os shares at $2.70 sold them to the new shorts between $3.00 and $3.15. You have to admire the artistry of these MM, they screwed the LONGS and the SHORTS in the same stock within 48 hours. These guys are VERY GOOD.
Do you want some proof of my theory? Usually when SIRI moves two or three cents there are millions of shares waiting to block its path. The stock moved 30 cents and there was absolutely no resistence. The 2 million share buy cleared out overhead resistence but where were the MM seliing? They did not sell until after the stop loss orders up to $3.15 were filled. This is collusion on a massive scale.
I have alot of topics to cover so lets see what else is of note. 1. How did the MM pull off this trick? The merger is so delayed that everyone is on pins and needles. The DOJ announcement could come at any moment and will produce big gains or losses for someone. Short term investors want protection from big losses so in go the stop loss orders and the MM just pick them off. You should expect to see more head fakes like this until the announcement. Let me try this a FOURTH TIME. Do not use a stop loss order or you absolutely will lose money.
2. Let's analyze the Goldman note that caused last weeks upheaval. Noto makes the point that we are headed into a recession, car sales will fall and OEM's will install less SIRI hurting the company. Nice, simple and dead wrong. Last year we sold 16 million cars and trucks in the US and 40% of them had sat radio or 6.4 million installs. In 2008, the industry expects to sell 15 million vehicles and have 70 per cent penetration or 10.5 installs. Lets take a worst case senario and say sales are 14 million and a 60 per cent penetration. This would lead to 8.4 million installs. Therefore even in a recession SIRI sales increase this year. The Noto note was just used to pick off the stop loss orders.
3. The XM Starbucks deal. SIRI and XM are using the delay in the merger to clean up some of the crap on XM's side which Mel planned to do post merger--all those cost savings that people on the XM board say do not exist. Let's review. XM settled with RIAA, settled three lawsuits with record labels and dumped the bitter coffee. There is much more to come if the delays continue. XM's balance sheet is a disaster and will take six months to clear up.
4. Trading SIRI. If you want to daytrade you should be using XM and not SIRI. With XM, I can almost guarantee you a nice gain in an hour and a half. XM opens down, trades up to a point 10 cents below its previous close and the has a second very deep wave of selling which occurs by 9:50. By 11:00 the stock is above yesterday's high and you have made $.30 to .60 a share.
Can't comment. Don't know how Bond guys really think or what tools they use. Actually thought that Teddys were wearing apparel used by hired entertainers at Bond Sales promotional parties. Shows you how little I know.
Day --- If you made money doing the opposite, then keep doing it.
Duke: Did, but would not do it again. The only reason I did is because I feel you carry enough creditability that you can steer thinking for short term. I have respect for the posts you guys are making, but I would feel that you should not suggest any type of investment plan for anyone. (For every action there is an equal and opposite reaction)
Stick to posting the results of your research and consensus of opinion. Great input on this board.
----- If you want to daytrade you should be using XM and not SIRI. With XM, I can almost guarantee you a nice gain in an hour and a half. XM opens down, trades up to a point 10 cents below its previous close and the has a second very deep wave of selling which occurs by 9:50. By 11:00 the stock is above yesterday's high and you have made $.30 to .60 a share. ---
If anyone played this suggested scenario, enough played against it. I play the herd mentality, and love when anyone that is respected, suggests a way to make money. Many follow the advice and it sets them up for a fall because the people that play against it already have the plan the the fall guy is following. It�s like having tomorrows newspaper.
No offense intended. Love your posts, and as I said before, I agree with 90% of your information. The how to play the market for the almost guarantee, is sticking your neck out. I do respect the fact that you used the word -- ALMOST! Got some law students in the group also? Keep up the good work.
it has always been about not following popular belief. Stay clear of the sheep or be eaten.
As I posted in response to Duke's long winded, fluf......Friday action was just a technical followed by a drift to the downside. Siri always, following massive sell-offs, rallys off oversold condition and pulls back to multi day trendlines.
There is no phantom and no more manipulation than anywhere else. Siri is a trading stock and trades on technicals.
I have to give credit to duke, for @ the v. least, being a good sheppard.