Desperate for Returns, Investors Pour Into Junk
The money manager’s job is supposed to be straightforward: Take people’s cash and put it to work. The more money that comes in, the bigger the manager’s paycheck.
So why would two of the country’s largest fund managers tell would-be investors in junk bonds—the common name for bonds issued by companies with the lowest credit ratings—to go away?
The short answer is that it’s for their [...]
EARNING SHOCK: Apple Analysts Are Cutting Estimates For Next Week’s Earnings
Here’s one reason Apple’s stock has been tanking lately.
Analysts are cutting back their estimates for fiscal fourth quarter (calendar third quarter) which Apple reports next week.
Philip Elmer DeWitt has a round up of three recent notes. Essentially, all three blame iPhone 5 supply issues for a worse than expected quarter.
The iPhone 5 has been sold out around the world since day one. It could be because [...]
From The Reformed Broker:
Master technician Ryan Detrick is slowly becoming a must-read for me. Here’s his latest for Schaeffer’s Investment Research on how despised this market has become of late:
As we’ve been saying for years now, this market is headed higher for two reasons: First, price action continues to be constructive; and second, overall expectations are still too low. Remember, lowered expectations make it much easier to have good news [...]
Could this be the most hated stock market rally in history? Not only do traders not like the market, the average public doesn’t believe the stock market is rallying.
Yet it is. The S&P 500 Index [.SPX 1402.14 -0.08 (-0.01%) ] is up 12.9 percent, one of the best year-to-date performances in a while.
The S&P 500 less than 1 percent from a four-year high. NYSE short interest is near a five-year peak, which is a decent contrarian [...]
From Zero Hedge:
Exactly one year ago, the short-interest in SPY (the S&P 500 ETF) reached epic heights at over 536mm shares. At the same time, short-interest in QQQ (the Nasdaq ETF) also short-term peaked at over 116mm shares short.
While QQQ has seen a gentle drift lower in general (somewhat reflective of trading volumes in the last few years), since July of last year SPY has seen a 62% drop in [...]
Investors are piling into bets that profit from a fall in bank stocks at the fastest pace since the financial crisis, as uncertainty in Europe and J.P. Morgan Chase & Co.’s problems fuel pessimism about the sector.
This increase in “short interest” was the biggest in any two-week period since March 2009, said the brokerage, which tracked the shares of nearly 750 financial firms.
The number of financial firms’ shares that [...]
Central banks in the emerging markets increasing their holdings of gold has been a big part of the bull market in the metal. At the end of last year, official net purchases of gold started to rise dramatically. In the third quarter of 2011, central banks added 148.8 tonnes to their gold stocks, more than double the entire amount of government buying in 2010, according to the World Gold Council. Interestingly, [...]
Uploaded by CaseyResearchFAN on Mar 7, 2012
Watch More Cambridge videos! http://bit.ly/Cambridge_Conference
Ed Steer, editor of Casey’s Gold & Silver Daily, gives a presentation on the Short Interest in Gold and Silver in the Casey Pavilion at the Cambridge House Investment Conference in Vancouver, BC.
Following the market’s “sudden” realization in December that the ECB had been quietly pumping $800 billion, or more than the entire QE2, into the market (sterilized? yeah right – when one lends out cash in exchange for worthless crap nobody else wants, and certainly not the Bundesbank, it is not sterilized), it became all too clear that the market’s response in 2012 would be a deja vu of 2011, if only for a while. [...]
A few days ago, we noted how in light of the most recent temporary bout of market insanity, which has seen the worst of the worst companies broadly outperform risk, one should go long the 30 most hated companies in the US as determined by the short interest to float ratio. We ourselves are unsure if this was a mock recommendation, or the only way to make money in a time when short covering [...]
There is a little for everyone in Marc Faber’s latest appearance on CNBC. The infamous boomer (and doomer) believes (as we do) that today’s downgrades are less significant for stocks (at least until the realization that banks and more importantly insurance companies are about to be cut as well – keep a close eye out on Allianz and Generali (of ASSGEN fame) – it is not incidental that they are [...]
by Lance Robert of Street Talk Advisors
Why QE3 Won’t Help “Average Joe”
Are the markets already front running a potential announcement of a third round of Quantitative Easing (QE 3)? Maybe so. We had expected QE3 at the end of last summer as the economy weakened substantially from the impact of the Japanese earthquake/debt ceiling debate/Eurozone crisis trifecta. However, with political pressures running high due to the raging battle in Congress raising [...]
Short sellers have targeted Groupon in the days after its initial public offering, as they did social network LinkedIn after its debut earlier this year.
The online coupon seller sold shares last week and saw them jump 31 per cent from their $20 IPO price in the first day of trading.
The shares were still 21 per cent higher by Thursday. But, when it first became possible to short the shares this [...]
Notice that during last week’s brief pullback, the NY Composite pulled right back to the 21-day EMA twice and held.
And, we closed at new highs for the move on Friday.
QQQ is still outperforming SPY:
If the short interest is as high as Tyler says it is, then if the EUR gets another huge squeeze, that is going to send all Risk Assets of every type, race, color, sex, and ethnic origin up [...]
by Phoenix Capital Research
The market action of the last few days reeks of short-covering more than anything else. I realize that rumors abound of more European bailouts (what is this… the 12th rumor?), Microsoft buying Yahoo! (an outright lie), and other items… but the reality is that the market is telling us plain and simple that this is just short-covering and a snapback.
For one thing, [...]
by Phoenix Capital Research
The markets are snapping back sharply on short covering and end of the month performance
gaming. Hedge funds have been getting destroyed over the last few months. So
now, more than usual, there is incentive to push the market higher, mark up
their positions, and end the quarter on a positive.
filled the gap from last Thursday and our moving to challenge resistance at
Do not let
these sharp rallies fool you [...]
When it comes to playing the endspiel for Bank of America, there are two binary outcomes: A) either the stock goes to zero in a slow, painful bleed, accompanied by periodic mega squeezes on headlines such as Buffett taking another bath; or B) the stock surges following some substantial government bail out and a quick and painless resolution of the mortgage putback litigation, the [...]
From David Rosenberg:
MORE SIGNS OF CAPITULATION?
The USA Today consensus showed that strategists have cut their year-end S&P 500 targets by 8%.
Wall Street economists are at 40% recession odds, which means if the heads of research allowed them to really say what the probability was it would be 80%.
Bank of America let its chief equity strategist go who was calling for 1,450
on the S&P 500 and the most bullish [...]
From Peter Tchir of TF Market Advisors:
Short Interest – Does It Mean Anything
The WSJ diligently reported short interest today. It increased in March. Unfortunately, I think this is just another example of data that is published, talked about, and even used to make decisions, that has failed to keep up with the times.
Of the 12 stocks listed with the most shares shorted, 4 were ETF’s. [...]
Below is the monthly short interest held by banks, total open interest, percentage of open interest short by banks and the approximately price for silver.
Our friends at The Forensic Factor have been busy. After exposing one after another alleged Chinese fraud reverse merger, and forcing management teams to address investors about numerous allegations of impropriety, the small research boutique has come out with a report exposing what it dubs “the most preposterous Chinese reverse merger yet.” As usual, in a world of shady transatlantic backdoor dealings, and [...]
Short-interest on Nasdaq rises to 7.67 bln shares
Nasdaq said short-interest positions grew to 7.67 billion shares in 2,874 securities as of Sept. 15, compared with 7.61 billion shares in 2,878 securities as of Aug. 31.
Tom O’Brien, Larry Pesavento, Bud Rolfs, David White, etc. at TFNN.com are all short.
I think these guys are over analyzing and making things too complicated.
All I see are more sectors turning around, like the SOX [...]
Looks like a bad day for the perma-gloomers, survivalists, and naysayers tomorrow.
Like I said, I’m expecting the “worst of the worst” stocks to outperform into year end.
Underinvested hedge fund managers will be grabbing the worst junk possible with the highest short interest.
I’m betting that the worst two sectors (oil services and semiconductors) will be upgraded en masse tomorrow to get a good short squeeze [...]
I know that Diamond Offshore has over 6 days to cover short interest….
Any wonder why these stocks are taking off?
Although the whole interview was interesting, what caught my ear in particular was, at about 2:30 min, the question was asked: IsnÃ¢â‚¬â„¢t naked short selling, as related to common stocks, already illegal in the US, or, is that not longer operational?
No, it is operational in the cash market, in the cash market you can not short my stock, for example, unless you can borrow it [...]
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short [...]