Insiders buying
Don Tiberone
Friday, August 03, 2007
Believe it or not, things are looking up; but you wouldn't know that
judging from today's sell-off. What's getting overlooked right now is
second-quarter earnings are stronger than anticipated, and the U.S.
economy could be gaining momentum.
As such, the Fed's "soft" economic landing period is more than likely
ending. In fact, the analyst community is now forecasting that third
and fourth-quarter earnings will also be up-trending. This bodes well
for the overall stock market, especially when you consider how
undervalued stocks already are.
Price-to-earnings ratios have continued to plummet, and remain at more
than decade lows, as earnings have risen faster than stock prices
during the past few years. Last week's sell-off and today's
continuation caused stock valuations to drop even lower.
"Stocks are just as undervalued now as they were in 2002," said Mark
Dodson at Hays Advisory.
When stocks are extremely cheap, you usually see a big pickup in
insider buying. Well, guess what?!
"Corporate executives have done more buying in the last week than at
any time since the eve of the Iraq War and bottom of the bear market
in March of 2003," added Mr. Dodson.
The insider buying is likely what suddenly drove the markets higher
late in the day on Wednesday. Moreover, Hays Advisory believes that
the sudden surge of insider buying confirms that corporate buybacks
are nowhere near over. If that's the case, it doesn't matter if
private equity is dying. There will be plenty of buying pressure to
drive stocks higher. No wonder Hays Advisory moved its equity-
allocation recommendation to 100% this week.
uncle_vito
Any chance the FOMC will say something encouraging about interest rate
assistance (does not have to actually act on it... Just say it) to make a
market bottom and start the market up again. I wonder if Tuesday at 2:15 PM
will mark a turning point. Like time to buy calls.
Also I look at the open interest on the S&P (SPX) and the put/calls seem
pretty well even. Maybe more puts but that could just be a defensive move,
not an expectation that the market will move down some more. In fact, I am
thinking of buying some puts. I already am long many stocks. The puts just
make it such that the volatility seems less: Market up or down, my
portfolio stays the same until this volatility is past.
Vito
"Don Tiberone" <s_kn...@my-Deja.com> wrote in message
news:1186202136....@x40g2000prg.googlegroups.com...
Ben Sharvy
> http://www.navellier.com/commentary/weekly_marketmail.aspx
> The insider buying is likely what suddenly drove the markets higher
> late in the day on Wednesday.
Plonk. Total loss of credibility there. There is no way insider buying
can move whole markets. There simply aren't enough insiders.
Blash
You don't mean to say you don't believe everything
printed on the Internet???
(G A S P !!!)
uncle_vito
time. It is going up from there.
Many folks think it is going down from here, the beginning of the 3Q. Not
so.
Later
Vito
"Don Tiberone" <s_kn...@my-Deja.com> wrote in message
news:1186202136....@x40g2000prg.googlegroups.com...
com...@webtv.net
" YOU ARE EITHER WITH US, OR AGAINST US "
Don Tiberone
> Don:
>
> Any chance the FOMC will say something encouraging about interest rate
> assistance (does not have to actually act on it... Just say it) to make a
> market bottom and start the market up again. I wonder if Tuesday at 2:15 PM
> will mark a turning point. Like time to buy calls.
In one of the Fed minutes earlier this year, it mentioned how the Fed
specifically changed the wordings in the Fed statement to calm the
markets. Which is why after the Fed meeting, the market rallied. But
after the minutes were released, it sold off after the markets
realized what the Fed was really thinking. So I'm guessing, they won't
say anything to disrupt the market. They'll probably spew their usual
inflation is contained nonsense that they repeat after every meeting.
I don't think they'll mention a rate cut. I'm guessing they'll mention
that they're monitoring the subprime situation and they'll act
accordingly. We'll see.
lubow
rate to keep the working middle class in their homes, but that would cause
more USD devaluation, higher energy costs and in general make things even
more miserable and could possibly dispossess even more people.
On the other hand, raising rates to prop up the USD may have the same impact
in 2008 as the Hawley Smoot tariff had in 1930.
We put all this together and we begin to understand why the Administration
ordered the Fed not to release M3 data last year.
--
Lubow
"Don Tiberone" <s_kn...@my-Deja.com> wrote in message
news:1186345615.4...@i13g2000prf.googlegroups.com...
uncle_vito
to it to calm the market down a bit.
There is no harm in saying something calming even if they do not intend to
act on it.
"lubow" <lu...@lubow-industries.com> wrote in message
news:Oxtti.1825$jQ3.742@trndny06...