The Market Ticker
Commentary on The Capital Markets- Category [Market Musings]

This is quite-amusing.

Gartman is chattering about commodity prices (a big spike) being the only thing that would prompt the Fed to hike rates.

How'd that work out in 2007 when commodities did spike higher, yet The Fed did not tighten?

Now as it turns out The Fed was wrong both ways, but there you have it..... commodity prices, particularly energy and food, are unlikely to matter to The Fed at all.

That's what history says, and that's what you should expect.

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The Fed has never, in its history, managed to actually prevent a market collapse.

It did not do so in 1929.

It did not do so in 1987, despite it being evident that the market was going to blow up.

It did not do so in 2000, despite it being evident that the market was grossly overheated.

It did not do so in 2008, despite having more than a year worth of warning (the two Bear Stearns hedge funds) and in fact Bernanke testified under oath that "subprime was contained."

It will not do so this time either.

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An old, beaten-down trucking company that got in a lot of financial trouble and reverse-split the stock, after nearly disappearing.

A relentless slide since then into oblivion.

And then, this morning.  One lone analyst issues a minor upgrade.

The stock moves upward almost 15%!

Earnings are on deck for tomorrow, but the fact remains that with exactly one little note from Raymond James the stock is on a tear.

Now forward P/E, if you believe the projections, is just 11 -- not a bad number.  And price:sales is almost zero; it's hard to go down from there (remember, big reverse-split!)  But the fact is that the company has an enormous debt load and, because of it, a negative book value (to the tune of $15/share!)  

In other words if you buy this stock you're buying something that has negative actual value!

But this isn't just algos chasing a momentum mover.... right?

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Buy the dip!  Ahhhh!

Buy the dip!  Ahhhh!

Buy Netflix, Amazon, Disney, Facebook!  Ahhhhh!

And then there was the time you did it in China, which over the last few days looked pretty good.

Until last night when the bottom fell out, with a huge number of issues hitting daily 10% down limits, sending the Shanghai index down 8.5%.

Ahhhhhhhh fuuuuuuuuuuuck!

That be coming here folks.

Oh, and that loan that the Chinese government extended to buy those stocks?

You still owe them the money.

Here, you might want this:

Suicide by tickerguy

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Remember that in mid-late 2007 and early 2008 we all heard daily about Cramer's Four Horsemen, and in early 2000 we had Cramers "New World."

Cramer managed to top-tick the market almost to the day in 2000.  He was off a bit more in 2007, but that's all right.

The point is that the same phenomena, where narrowing and even extreme strength in certain issues are apparent (e.g. Amazon, Google) while the broader market rolls over and fails to sustain relative strength, is a quite reliable indicator.

It's not perfect but it has a pretty good record of success in predicting when you're about to get the business end of the horse in the stock market....

PS: The stallion approaching you appears to be horny.

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