Schaeffer's Trading Floor Blog

Buying Dries Up

by 6/14/2005 2:40 PM
Stocks quoted in this article:

My alert for NYSE net ticks was rather active for a short time, but as you can see below, the buying has dried up...


Chart Courtesy of Thomson/ILX

This has left the SPX back to where it was before the buying spurt hit...which was just to the plus side of flat.

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A Surge of Buying

by 6/14/2005 1:51 PM
Stocks quoted in this article:

My alert for NYSE net ticks just hit as the SPX has popped to a new high for the session...A scan of the headlines shows a flurry of one liners noting that a helicopter has gone down near Wall Street but reports seem to indicate that the passengers survived.

Please note, I am not implying that these two event are related, it is just what I am seeing. If there is a catalyst for the buying, it is being overshadowed by this news...


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Readers Respond - GM

by 6/14/2005 1:33 PM
Stocks quoted in this article:

Mike says - "Hi, Nick! Any chance we could get your thoughts on the GM chart? Bernie, as you know, was spot-on with his push of GM, in his columns, in the OPTION ADVISOR, and on NIGHTLY BUSINESS REPORT. His quote: "If you have an ounce of contrarian blood in you, buy GM stock." (Please thank him for me, btw). Today's push up looks like it's running into resistance at the 200 dma, but I'd like to see your take on the charts if possible. Thanks!"

My response - If you haven't seen Bernie's take on GM, a good summary can be found in his recent column - "Schaeffer's Media Outtakes: General Motors - A Contrarian's Dream".

As far as my take on the chart - I don't think it is particularly relevant. By that, I mean this is an example of a sentiment extreme. In most situations I discuss, I am looking for signs of either optimism or pessimism amid a trend. This case is different.

In sentiment extremes (which are somewhat rare) you have a level of sentiment that is so severe that is outweighs the other factors. I don't mean to imply that the shares will just move straight up (trading is rarely that easy) but that you want to give the shares a wide berth in terms of price action, magnitude and time to play out.


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Index Check

by 6/14/2005 1:00 PM
Stocks quoted in this article:

We slip...drift...slide...meander...pick your term...through the day with few groups gaining traction...or even moving...

After a strong couple of days gold stocks are pulling back, but that is the only group to tag the one percent line. Semis are also pulling back as the SMH still trades below resistance....

I was on the phone with a reporter from the Wall Street Journal yesterday and shared the same thoughts that I voiced here yesterday that perhaps traders were sitting on the sidelines ahead of this week's economic reports. We have retail sales and the PPI out of the way but still no action. Tomorrow we get the CPI and the Fed Beige Book so perhaps that is what it will take...


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Must Read

by 6/14/2005 12:42 PM
Stocks quoted in this article:

If you missed it yesterday, Bernie was on CNBC...He summarized his thoughts in a late-day column yesterday - The Perils of Technology...

If you haven't read this column, make sure you check it out for a great "big picture" view...

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