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Late Day Sell Off Deja Vu
Just like yesterday, shortly before 3 pm the market started selling off,
amid substantially higher volume and notably larger block size,
indicating that while the melt up during the day was due to the now
traditional liquidity-rebate HFT crew (funded ironically in large part
by the same Chinese IPOs that pay NYSE bills then promptly spontaneously combust a few months later), the selling was primarily by real money. And while the catalyst for the selloff
most certainly was not the FOMC decision, many are wondering just what
is it about the close of trading that is forcing a market correction
(ignore the Dow: it was materially higher only due to IBM which is
majorly skewing the index) at about the time when the ETF rebal
trade traditionally pushed stocks higher. According to some, the recent
surge in SPY shorts may have something to do with it, due to the
distribution of rebalancing estimates ahead of time by brokers. If ETFs are indeed creating a feedback loop that now leads to selling instead of buying, very soon we may see a very unique battle between the two main market momentum vehciles: the HFTs which their upward bias, and ETFs,
which may now be a downward pressure vehicle. That particular duel may
end up being far more interesting than the endless polemic of whether or
not fighting the Fed is worth it. Today, the market closed green by a
whisper. Yesterday it was not as successful. Tomorrow may prove to be a
very informative tie-breaker.
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From SA news wire...
"Intel's (INTC) Q4 results will likely come in below the company's$11.4B guidance midpoint, given lower-than-predicted demand for PCs, says JPMorgan. Without a surprise December uptick, Intel will probably track "towards the low end" of guidance, reporting a sequentially flat $11.1B. Intel closed at -0.1%"
hmmm first Best Buy now Intel?
http://blogs.forbes.com/ericsavitz/2010/12/14/intel-will-it-miss-q4-guid...
Intel = smartphone/tablet = big trouble.
I think you mean Intel /= smartphone/tablet. iPads and smartphones are an ARM/Qualcomm story.
Intel getting blowtorched over future pc sales/growth forcast.
Nvidia will be a big player in tablet/gamer/smartphone market.
No it won't.
We will see .....
......"It was inevitiable ... the tablet market is the new battle ground for CPU and GPU makers. Nvidia has capitalised on its success with their Geforce and ION graphic products ... so it's only natural for them to take the next step into the mobile/tablet market. The Tegra 2 is designed specifically for mobile/tablet products and it seems that it's gaining momentum."Nvidia's Tegra 2 platform has recently become a new spotlight in the tablet PC market as most of the tablet PC vendors including Acer, Asustek Computer, Toshiba and Samsung Electronics as well as several regional brand vendors in China, Germany and the UK, are all set to launch Tegra 2-based models, according to sources from notebook players.".....
......."Like many PC stalwarts, NVIDIA wants to branch into the fast-growing mobile devices market. The California-based maker of high-end graphics processors may be on the verge of a breakthrough. Ambrish Srivastava, a semiconductors analyst with BMO Capital Markets, says he expects Nvidia chips to show up in a number of tablet PCs next year.
Srivastava’s remarks came from a Dec. 13 call with investors that summarized findings from a recent BMO trip to East Asia. A group of analysts, including Srivastava, spent a week visiting more than 30 tech companies in Japan, South Korea, Taiwan, China and Hong Kong.
The meetings led Srivastava to believe that “a lot” of PC makers will use NVIDIA’s Tegra chips in upcoming tablets. The Tegra line, which NVIDIA first introduced in 2008, is designed to be particularly power efficient and thus a good fit for mobile devices. “NVIDIA is clearly emerging as one of the top design wins [in the tablet space],” said Srivastava during the call."......
Mobile Computing Devices to Drive Graphics Processors Use
......"We believe that rising smartphone adoption will lead to more graphics usage from mobile gaming, mobile video, and mobile Internet. Apart from smartphones, Nvidia's Tegra chips are present in Microsoft's Zune portable media player as well as Sony's PlayStation gaming console. Demand for graphics cards that can handle higher higher capacity of audio and high-definition video is growing rapidly, and Nvidia plans to meet this demand by rolling out new versions of Tegra chips every year.".....
What is going on with NFLX in AH? It seems to be going verticle on nothing.
Very clever, Tyler.
Very clever, Tyler.
lol
"Deja vu is a glitch in the matrix. It happens when they change something."
lol
"Deja vu is a glitch in the matrix. It happens when they change something."
+1
+1
I feel like I've seen this article somewhere before...
MIRAGE BITCHEZ!!
MIRAGE BITCHEZ!!
I see what you did there...
I see what you did there...
Transports led the unhappy way
The market will climb higher even with a much needed 5% pullback.
Gold has traded sideways since oct 20th.
Buy - X,MT,ZEUS,CAS easy money.
Do that over a year my friend and come back and talk to me.....and don't go anywhere near silver. Physical metals aren't a day trade.
US Steel for me is up 22% already in 6-7 weeks.
did you buy VXZ today? You mentioned yesterday that you would.
Yes. I used about 10% of my cash in my account. I think at some point soon we will see a 5% correction. I real do not want to sell the stocks I have now. Just some insurance I guess.
I liked the action today too, enough to go 20%. Fuck me if I get kicked in the balls again on this trade going into the first legs of a brand new POMO. I have a tight stop (5%).
Good luck Spalding. Keep me posted and I will do the same.
What was it Yogi said, "When you find deja vu....take it" or was that "Fork in the road all over again." Whatever!
SPX Daily RSI finally got to 70. a lot of traders and timers won't play up here
Off topic but revelant. Senator Hawkins just completed a distrubing analysis on cspan of for profit colleges which receive 90% of their money ($30 billion) from Govt in the form of grants and student loans. Most of the students enroll in online classes. Large amounts of money is spent recuiting poorly qualified (unqualified) students who drop out within a year since there is little support. The for profit keeps the tution money an the student gets the debt. Drop out rates of 75%+ are common and few graduate with jobs. Profit margins average 35% and Pay for the top executives exceed $200 million per year!! For profit is 3 or 4 times as expensive ($15000/yr) as a junior college class. Most of the for profits are owned by Wall Street Hedge Funds. The for profit may have 5000 students on campus but 75000 students enrolled online. One example was a for profit enrollment BOY of 400,000; new recruits of 700,000 and EOY enrollment of 425000. So at one point in the year, the for profit had 1.1 mm paying tution which they kept and 675000 student dropouts which now have an average of $8000 of debt which can't be repaid. The higher the dropout rate the more profitable it is for the school because they have only fixed costs no matter how many students with a online program. Its another example of wasteful spending on programs for the rich who continue to rape the citizens of this country.
Yeah, some guy named Clinton pushed for this subsidized higher education nonsense back in the '90s, 'cause it's every American's birthright to go to college. Now Obama is expanding the same ideas to health care -- wait 'til you see how that all works out.
and.... The profit and NON profit colleges are both severely over priced thanks to government grants and loan programs.
Jim, are you saying that you are against "affordable" colleges for every "qualified" student regardless of her background or financial ability to pay our quite competitive rates? ;-)
No wonder that college tuition is not in the Core CPI.
- Ned
I agree. Another way of looking at it is that higer education is in one great big bubble, fueled (once again) by easy money.
It's actually a trap, because what exactly does one expect a young person to do, if they want a job? All of the manufacturing jobs have been moved offshore, leaving mostly service sector jobs behind.
Of course, getting a degree is no guarantee of getting a high paying job. But not having one limits your options severely.
In any case, Higher Ed is in a great big bubble that's waiting to pop. It's only a matter of time, IMO.
It is the SUB EDUCATION crisis. Leveraged underperformance.
Google this: "gainful employment regs", then check out what's happened to the big names in this space since July. Bloodbath, and well deserved.
Rally of the day
http://content.screencast.com/users/wprosser/folders/Jing/media/472aa258...
Whats to be expected with endless economic news quarks. Auto pilot's battery light is starting to flash.
US Treasury rolls over $9T+ and rising annually (up from about $4T in '08 and prior).
As of Nov, the interest rate paid on all debt (all issuance / rollover) was 3.007%. By time December report comes out, many of the shortest rates (that have the greatest issuance) have doubled (2yr from .32 to .65, 10yr from 2.23 to 3.47). If rates remain elevated, the Fed's ability to subvert the pricing mechanism of the markets will mean big interest bills. Potentially forcing Congress to think before spending? The simple move from 3% to 4% for all debt per month on nearly a Trillion in Treasury issuance is $10 billion a month additional. If we hit 5% (which is very possible given the big moves, it means we'll be paying additional $240B annually over current...starting now).
Almost starts to be real money.
BTW - this creates the need to create more debt to pay the higher debt costs...also known as the death spiral.
QE 3
reid selloff
http://www.washingtontimes.com/news/2010/dec/14/reid-threatens-keep-congress-next-year/
...many are wondering just what is it about the close of trading that is forcing a market correction...
A sizable amount of institutional money may simply want out or want to be a lot lighter equities (ETFs or stocks) by the end of the year and are now hitting more bids towards the end of the day since that has been where the magic "stick save" support has been these past months.
If Obama is flailing around this badly before the new Congress is seated then the near future = increased uncertainty. And maybe that is finally drawing some more considered attention to how many other things can go (are going) wrong.
DEJA VU squared
Late day Sell-Off? Fast- Money Flows? No worries! Speaking as a Financial Advisor who deals with Real People with Real Money... Even with 10-year yields at 3.4%, it makes sense to slowly swap bonds for stocks... The real money in this country remains with the upper middle-class, and they will continue to slowly allocate money into equities, because they don't like buying long-term bonds with such low yields, while the Fed Prints. Simple Math. Why does everyone have to make things a Conspiracy?
who would be in bonds and switching to equities now?????
If you are advising your clients to swap bonds for equities, I hope you are hedged.
I suspect he advised his clients to switch six months ago or longer. That's when I got completely out of bonds and went whole hog on stocks. Now it's not so clear if one should switch out of bonds into stocks. In 2009 and early 2010 it was very clear that it was time to rebalance at the minimum.
I agree. I count myself as semi rational with a twenty year horizon. If I am representative of the upper middle class then he is correct we are slowly allocating more money into stocks in our balanced investment accounts. In fact most of us with conservative portfolios have gotten out of bonds as the ten year went under three percent. Even just simple rebalancing will cause people to sell some of their bond gains and put money into stocks.
the stock market is acting very weak today and bears watching. Speculators have pushed my favorite diversification/beta play ewz down at 77.18 high today. The chart is not painting a nice picture right now.
This sell off was precipitated by the surge (again) in rates today. Shortly after the Fed announcement of luke warm (at best) growth and no change in policy, rates started to spike hard and equities started tanking immediately led by the IYR (real estate ETF), which has been particularly sensitive to rates. I'm looking for the housing index (XHB) to drop next. No brainer--higher rates are bad for the real estate market which is teetering (and essentially already begun) a double dip.