Schaeffer's Trading Floor Blog

IBM

by 5/10/2005 1:23 PM
Stocks quoted in this article:

For what it is worth...IBM is still struggling as it creeps back toward its recent low. I just checked in on the sentiment and found that is more or less inline with what we discussed last week. The only difference is that the put/call has actually declined, indicating an uptick in optimism...

  • 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: 1.1%

It appears that few seem worried about the recent earnings miss and technical breakdown. If you are new to this space, make sure you check out the link above for full look at this potential trouble spot...


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Index Check

by 5/10/2005 12:44 PM
Stocks quoted in this article:

Here are where the major indices stand...

Overall, we see a similar picture to what we saw at the open though the moves are somewhat larger. Widespread weakness remains the theme of the day....


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SPX Intraday Chart

by 5/10/2005 12:29 PM
Stocks quoted in this article:

We drift into lunch...


Chart Courtesy of Thomson/ILX

...with the SPX trying to hold its session lows...

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Sneak Preview

by 5/10/2005 11:50 AM
Stocks quoted in this article:

I am working on my weekly column for the homepage and thought you might like a sneak preview...I am looking into Amdocs Ltd (DOX) which is a software and programming concern. As you can see in the bullets below, the shares have little in the way of overt pessimism.

  • Percent of analysts tracked by Zacks who rate the stock with a "buy": 82%
  • Number of analysts tracked by Zacks: 17
  • Short interest as a percent of float: 1.2%
  • Short interest ratio: 1.965
  • Put/call ratio percent rank: 50.0%

While a quick check of the chart shows the shares have recently broken out of an uptrend....


Created with SuperCharts by Omega Research

But perhaps the most interesting aspect is that the Street has become quite bullish since the beginning of the year as you can see in this monthly snapshot of ratings from Zacks....

The full commentary will posted on the homepage this afternoon, but you have already seen the "meat" of the argument. The bottom line is - should the shares fail to pick up here, these "recent" bulls may turn and run...


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Readers Respond - Risk

by 5/10/2005 11:28 AM
Stocks quoted in this article:

In response to the post below on hedge funds, Sharlee says - "I just heard the story repeated on CNBC that a hedge fund might be in trouble. For three years I have reported that something like that would be the beginning of the end of stock market trading as we know it. There are about 2500 stocks on the NYSE but there are 4000 mutual funds and about 8000 hedge funds, most of which are chasing those 2500 stocks. It is estimated that funds of all kind own about 85% of the 16 Trillion Dollar market. If any small part of 16 Trillion Dollars were put up for sale and fund cash levels are at decade lows, who could and who would stand in the way of a crash ?"

My response - I don't have the figures to confirm the numbers above, but I do believe that hedge funds, through their sheer number and leverage employed, control a good deal of the volume. It is hard to say when (or even if) there will be a problem, but I do think it is something to keep in mind as forced selling could be "contagious".

I know that some will not agree that this is a risk to consider and I respect that. I just wanted to bring it up as a point to ponder on risk. Of course, I still think one of the best recent discussions of risk was in Bernie's April Option Advisor Commentary - ": Tiptoe Through the Tulips" - where he discussed ways to avoid "blowing up"...


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