High Frequency Friday – The WSJ Finally Catches On!
by phil - April 16th, 2010 8:27 am
I was amazed this morning to see both the usual contrarian indicator of a bullish cover on Newsweek (mission accomplished market pumpers) and a good piece of reporting in the Journal on a topic ZeroHedge and I have been pounding the table on for a year. Our readers will find nothing new in the article "This Market Has Its Freq On" but to see it finally summarized in the MSM (giving us no credit at all, of course) is at least a little bit satisfying.
The Journal highlights the following facts (and they are now MSM FACTS, not "conspiracy theories" Tyler and I were making up):
- The recent gains have come with only marginal support from traditional long investors. Wall Street trading desks and the relatively new breed of high-frequency traders have been fueling the rest.
- Investors pumped only $396 million into domestic stock funds in March. Since the start of the year, they’ve only added only $1.8 billion, according to the Investment Company Institute. Compare those inflows with some other recent rallies. Between April and July 2009, investors poured $28.76 billion into U.S. stock funds and in the first three months of 2007 they moved $19.1 billion into such funds.
- Insiders are dumping stock at an alarming pace, $15 billion so far this year, more than six times the $2.5 billion they’ve bought, according to Trim Tabs. Moreover, they’ve been dumping their stock more in recent weeks. Insiders sold $6.9 billion in March and bought just $831 million.
- Six stocks represented 27.51% of the overall stock market volume: American International Group Inc., Ambac Financial Group Inc., Bank of America Corp., Popular Inc., Fannie Mae and Citigroup Inc. Since the start of the year they’ve represented 16.55% of the composite volume on the New York Stock Exchange, and more than 22% on each of this week’s first three trading days, reaching as high as 30.62% Tuesday..
- The rise in these stocks has mirrored, or perhaps driven, the recent broader gains. Through Wednesday, Bank of America was up 28.8%, Citigroup was up 48.9%, Ambac shares have doubled, Popular shares are up 74.3% since the start of the year. AIG shares are up 32.5% for the year through Wednesday.
- Program trading represented 27.9% of NYSE volume for the week
Wednesday Rally – 80% Gain For S&P!
by phil - April 14th, 2010 8:03 am
S&P 1,200?
It could happen this morning. We have good earnings from INTC and a beat by JPM so there's no reason not to take out our last major technical as we party just like it's 1999 with MASSIVE gains behind us and the MSM projecting MASSIVE gains for the rest of this year too. As I said yesterday, we're not going to complain (much) – we're just going to go with the flow. Yesterday I put up a DIA play that returns 566% in 37 days if the Dow simply holds 11,000. Today we'll look at a similar play on S&P 1,200.
After all, like the crazy guy on TV says, if the government is giving free money away – shouldn't we be getting ours too. Only I'm not telling you you need to buy a book or do anything special – just join my Membership site AFTER you make your 566% – that's a pretty good deal! Of course, keep in mind these are the bull plays and we are generally hedging for a possible correction so obey the sign on the left and play wisely! Consider that you can make 5% a month by risking just 1% of your virtual portfolio on successful plays like this one – that's 60% a year if all 12 months are positive, and the last 12 months have been so why not 12 more?
As I mentioned above, the S&P is up 80% from the March lows and is still 31% off the Oct, 2007 high of 1,576. As we switch off our brains and run with the bulls, we're not going to worry about the low volume and those silly fundamentals – we're just going to use 1,200 as a key support that lets us know when to get in and out of our bullish plays along with Dow 11,000, Nasdaq 2,500 (still waiting), NYSE 7,600 and Russell 700. This makes being bullish nice and brainless and a couple of high-percentage disaster hedges let us sleep at night without being worried about a Black Friday even wiping out our gains. The other key percentages are:
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Dow 11,019, up 71% from 6,440 low. 80% is 11,592, still 30% off the Oct '07 high of 14,279
- S&P 1,197, up 80% from 666 low. 80% is 1,200, still