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minnesota | Having worked on Wall St for 15 plus years as a trader I learned a couple things. Number 1 is that I can throw darts as well or as bad as the next guy. Number 2, the guy that "knows" usually "knows" sh**. That being said, here is my two cent take on the last week of trading, and mind you, it is worth two cents...maybe. Coming into the end of the year we had a lot of hedgefund managers and bigger PMs that were riding what they believed was an overbought rally that needed to correct, probably in the first quarter. Not only did they predict a correction they HOPED and WANTED it which is where we are now. I get technicals...I am a fundamental guy for the most part, but my guess is neither matter much right now or in the coming week (I get they matter, dont everyone kill me). What we need to watch is how the "hope for a correction" crowd reacts now. One can argue that the recent data (I know I know, Govt data) has been ok to better and earnings have been ok so far. That should be plenty of reason for the group of dip buyers to be all over these moves and picking away. The one thing I will be looking for is if the same buy the dip group actually wants to buy or if they change the argument to, "this data and earnings reports we have been seeing are nothing more than inventory replenishment and govt spending'. If so we could see some weak buyers be flushed out pretty quickly.
Two stocks I will watch to see if there are true believers are QCOM and POT. I heard yesterday QCOM fans tell me about 14 dollars in cash and sandbagging estimates. All may be true and a good reason to buy, but lets see what happens when they are down another 5%...do these guys bail or buy more....I think we got some answers today. I heard the same from POT yesterday. No one, for my money, does a better job on earnings conf calls than Bill Doyle (POT CEO). He will tell it like it is and will answer questions which is refreshing. I heard the same types of bullish arguments yesterday regarding POT from the same crowd....China is coming back, inventories have been drawn down...reasons to buy. We'll see. Obviously there are plenty of other names and data points to watch. From stronger USD to political comments, but for me, it's all about dip buyers either standing in or getting scared.
For me Jan and Feb have always been foot off the gas months. I will stick with knowing my "sleep at night stocks" and the levels I like. I keep the speculation temptations in the back of my head until I have some house money to play with later.
Thanks for letting me pontificate and have a great weekend. | |
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stock mkt thoughts
