Schaeffer's Trading Floor Blog

Into the Open

by 5/11/2005 9:14 AM
Stocks quoted in this article:

We head toward the open with S&P futures now trading about a point above fair value, so we might see a slight upside bias at the opening bell. The uptick in stock futures came on news that the March U.S. trade deficit was lower than expected. Aside from the AIG story, the other big news of the day is obviously Cisco's earnings which we touched on last night. In the comments afterward, management expressed some slight optimism and the shares are up just over one percent.


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Will It End?

by 5/11/2005 8:24 AM
Stocks quoted in this article:

Once again, American International Group (AIG) finds itself in the limelight. In a post last week I tried to summarize all of the recent issues surrounding the shares and noted that despite it all, analysts were still infatuated with the company. Today's focus is on a potentially suspicious order that Hank Greenberg gave to one of his traders in regard to buying back AIG stock. Details of the story can be found in this CNN/Money article - "Greenberg said to order late AIG trade".

A check of data from Zacks shows no change in opinion from the jubilant Wall Street community as they continue to shower the stock with "buy" recommendations in a display of love the borders on that obscene.

With all of the issues that seem to keep popping up, I can't help but think of the old cliché - where there is smoke, there is fire. While is it possible that this all blows over and everyone lives happily-ever-after, I think it is of the utmost importance to consider the downside risk to make sure you don't get caught in the stampede should "fire" be discovered and cause the bulls to finally run...

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Good Morning

by 5/11/2005 8:03 AM
Stocks quoted in this article:

We follow yesterday's drubbing with some indecisive futures action. With an hour and a half until the open, S&P futures sit about 40 cents above fair value, which indicates a flat open. Oil is down 49 cents to 51.58. Gold is up 80 cents to 428.70.

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Final Figures

by 5/10/2005 5:27 PM
Stocks quoted in this article:

Despite a midday buying attempt, the major indices finished the day with moderate losses...

Index Index Value Point Change Percent Change
S&P 500 (SPX) 1166.2 -12.6 points -1.07 percent
Dow Jones Industrial Average (DJIA) 10281.1 -103 points -1.0 percent
Nasdaq Composite (COMP) 1962.8 -16.9 points -0.85 percent
Russell 2000 (RUT) 595.0 -7.9 points -1.31 percent
CBOE Market Volatility Index (VXO) 14.17 1.56 points 12.4 percent

The COMP fared slightly better, but for the most part we see consistent declines among the indices. The graph below echoes that consistency...

Here we see a very similar picture to what saw this afternoon which of course was similar to what we saw this morning. In other words, we have seen heavy, steady, broad-based selling...

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CSCO

by 5/10/2005 4:29 PM
Stocks quoted in this article:

Cisco's numbers are out...It looks like they beat EPS estimates by a penny and the stock appears to be up a few cents from its 4:00 PM close. However, we will have to wait for the comments from CSCO's management to get a better feel for how the shares will react...


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