Wizard of Wall Street Oct-Nov Edition

Discussion in 'Journals' started by eagle488, Oct 28, 2006.

  1. That's OK.

    I don't have a lot of time to read your thread.
    #31     Nov 9, 2006

    There are several ETFs and indexes in which you can feed into a chart. The following is the Vanguard Total Market ETF. There are a few others that can be used that utilize say the Russell 3000. They all pretty much state the same thing.

    The charts are telling me that there will be a small pullback in the general market very soon.

    In 2004 and 2005 there was a pullback in May, a summer bounce and then another pullback in Sept-October followed by a surge. In 2006, we had one good pullback with a solid intrusion into the risky territory (fueled by Ben Bernanke in that memorable speech over the summer). There was a surge, but no Sept-October pullback. This pullback might have been skipped or its just delayed.

    Hopefully we have skipped the second pullback, but there is still a possibility. The market doesnt simply skip these historical trends.

    #32     Nov 9, 2006
  3. No I didnt mean that I dont have time to reply to your specific posts, I meant in general.

    Its a busy time right now, thats all.
    #33     Nov 9, 2006
  4. It might be a good time to sell NYX. Dont hold me to it, but there is too much bullishness in the market and now the ultimate Cramer pump and dump. On Mad Money, he was jumping up and down saying that he thought it would go to 250 and be the next Google.

    Wow! Up 6.5 dollars on heavy volume. As I type this its traded at 3.1 million in volume (10AM) and usually it just trades about 1.5 million for a day.

    The chart suggests a retracement back to the 50 week line. I hold no position in NYX. These are just my thoughts on the issue.


    Once the price rises so high over the 50 week MA then many shareholders will be convinced to sell expecting a retracement. At a P/E of 100+ and a forward P/E of 40+, Im not sure what investors are expecting the NYX to do. If the earnings calls and growth outlook is not perfect, then we will see a great fall.

    The Mad Money show last night was the ultimate Pump and Dump. Cramer had predicted the Cisco high rise previously. A caller came on to say that he had made over 16000 dollars on Jim's recommendation. Then Jim's next segment was about NYX stating that it would go to 250 and be the next Google. The whole act was very convincing. Now the show's viewers, thinking that they missed out on Cisco, will be cashing out their bank accounts and going "all in" on the NYX.

    I have a feeling that some of Jims pals want to unload their shares in the NYX.
    #34     Nov 10, 2006
  5. I checked Morningstar.com to validate my thesis. This is a sensible publication where you can do quick research on the company. I have found that their analysts have been quite good in evaluating a company in the past. Their fair value estimate is $65 which just so happens to be the 50 week moving average.

    My belief is that some of the big players knew that Cramer was going to pump the stock and so there was a huge run-up in the days before. Today makes the perfect exit point and time to go short for the big money. They will short it back to the 80s before covering.

    As I type this, its well off of its high 95.5 for the day. I looked at some of the time&sales information. Someone with a million bucks stepped in the 95 price region and bought a nice block. Probably some retiree using his retirement account who bought on Cramers advice. Now it pulled back about 2 dollars and he is sitting with a loss of over 20 grand in 30 minutes.

    Now Im looking at the chart and seeing the head&shoulders starting to form.
    #35     Nov 10, 2006
  6. Lets see if I can predict this downpath for NYX today. Maybe I might just eat crow on this one...
    #36     Nov 10, 2006


    There is a situation that just got brought to my attention. I have known this for a while, but it wasnt formally presented to me until just now.

    The long term capital gains tax laws will be expiring in 2010. This means that capital gains will revert back to 20% from the 15% we normally enjoy. The smart money will cash out 6-12 months ahead of expiration, but there will be those who will be late for the punch and desperately cash out at the last minute. This will cause a market selloff. While the market is selling off, investors and traders will sit on the sidelines in cash afraid it will be like another 2000. Confidence in the market will be lost.

    Real estate will be at a low by 2010 and once again investors will jump on the real estate band wagon.

    The Democrats probably wont extend the capital gains tax law, just let it expire or maybe they might even vote it out when a new Democrat President is elected. Their argument will be that they need to cut down on the national debt, however, they wont want to raise taxes directly. The market will be doing well by then and they will logic that the capital gains tax is the only way to raise taxes (without raising the income tax).

    In the end, it will be the working man that will be hurt the most. The ones that the Democrats are supposed to be helping.
    #37     Nov 10, 2006
  8. You almost hit it on the dot!!!! NYX closed at 94.48, up +6.92 or +7.90%. Otherwise a great journal, keep it up :D
    #38     Nov 11, 2006
  9. I was wrong that it would close down, however, I am very skeptical on the sudden 12 point surge in two days. I still believe at some point this will turn around.

    Cramer was on the floor of the NYSE shortly before he announced it on the show. I am more then willing to bet that he had told some guys on the exchange that he would pump NYX on the show. Maybe he was requested to pump the stock by his old friends on the exchange. These guys then piled in before he announced it and that was the reason for the first surge.

    The second surge on Friday was the Cramerites piling in. I noticed a down trend at the end of day on higher then usual volume.

    The volume on Friday was at 11 million and the usual volume is 1.9 million. I think Monday and Tuesday will bring increased volume and maybe a bump of a few more dollars. However, the volume will probably dramatically slow to the 1.9 million in a few days.

    I have seen where some of his pumps last for months. Usually when the conference call comes around, then there is a waterfall selloff. The most recent example was SNMX.

    He pumped that stock up to 18 bucks. The conference call comes around with the usual stuff and then there is a waterfall selloff back to 15 for a 20% loss. One of Cramers callers actually called in a few days ago to asked what happened. Cramer shrugged his shoulders, said "OH well I didnt like the call" and then moved on quickly to the next caller.

    The attention on NYX will only be short term. Im still baffled at how analysts see the exchange growing at this maddening pace. Maybe I dont understand the business model, but at a P/E of 105 I dont feel like I am getting in on a super bargain company.
    #39     Nov 11, 2006
  10. I love this journal :D Keep it up!
    #40     Nov 11, 2006