Schaeffer's Trading Floor Blog
Stocks quoted in this article:

In response to my comments about the whipsaw action, Chris says - "This just in from the Fed: 'longer-term inflation expectations remain well contained'. Omitted, then added, but then retracted, now partially omitted and partially retracted..."

My response - Good point. One might ask - how can we expect market participants to remain level headed when you are waiting for the next "what we meant to say" from the Fed?


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Whipsaw...

by 5/5/2005 1:42 PM
Stocks quoted in this article:

Please keep your hands and feet inside the vehicle until it comes to a complete stop...this morning we saw NYSE net ticks surge past +1000...less than an hour ago we saw this swing 180 degrees and push past -1000....now we have the round trip as buyers rush in and pop the market from its lows as net ticks hit +1000 again.


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Index Check

by 5/5/2005 1:36 PM
Stocks quoted in this article:

The selling pressure appears to have flattened out...at least for the moment...so I thought I should check in on the indices...

For the most, the losses still remain mild as networkers are the only group to push past one percent...housing stock are still holding gains...the TLT has shrugged off this morning's lower open and moved into positive territory...

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Selling

by 5/5/2005 1:13 PM
Stocks quoted in this article:

While I have been wading through emails, the market has been selling off...


Chart Courtesy of Thomson/ILX

On a percentage basis, the decline is still mild but as you can see the selling has been aggressive. My alert for NYSE net ticks pushed past -1000 shortly after news hit the wires that S&P cut GM's credit rating cut to "junk" status...


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Readers Respond - IBM

by 5/5/2005 1:07 PM
Stocks quoted in this article:

Stuart also says - "Nick, IBM, I don't know what's going on there but the tape is UGLY."

My response - For those new to this space, I have been noting concerns on IBM for sometime so I suspect that Stuart may merely be trying to get under my skin and spur a tirade out of me. Of course, the chart is "less-than-constructive" so perhaps I should touch on the topic.

In a commentary early last week - "Feeling Hot...Hot...Not?" - I offered a cynical take on IBM's announcement that they increased their dividend and approved a massive stock buyback. If you are new to this space, click on that link and follow the embedded links back to get a complete play-by-play on the stock.

Turning to the current environment we find IBM trading down one percent after gapping higher this morning on announcing a restructuring plan and large round of job cuts. Those following my comments know that my main contention on the shares has been the complacent Wall Street attitude amid a deteriorating technical picture. In our last check of the sentiment we saw that the percent of the analysts tracked by Zacks ranking the shares a "buy" had slipped to 53 percent. Check it out now...

  • Percent of analysts tracked by Zacks who rate the stock with a "buy": 65%
  • Number of analysts tracked by Zacks: 17
  • Short interest as a percent of float: 0.8%
  • Short interest ratio: 2.339
  • Put/call ratio percent rank: 21.8%

It appears that the "playbook" offered the right advice as the Street has flocked back the shares like flies to...uh...sugar?

I guess my bottom line is this - at the end of March I expressed concern on IBM as it was trading near 90 and 62% of the analysts tracked by Zacks rated the stock with a "buy". Now the stock is trading near 75 (after the company reported an abysmal earnings report) and 65% of the analysts tracked by Zacks rate the stock with a "buy". As a contrarian, that doesn't make me feel warm and fuzzy...


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