We knew markets could go up, too.
five bloggers followed the return of volatility this week, and once again this weekend, we'd like to share the "Best of the Blogs" with
readers. These posts best captured the intent of these blogs, which is to provide intelligent discussion on the issues each writer sees as most pressing that day.
Now, let's take a look at
on the commoditization of stocks,
on the CPI's effect,
on how the music business is changing,
on Goldman's chip upgrade and
on why he's bullish on Bernanke.
Click here for information on
, where you can see all the blogs -- and reader's comments -- in real time.
Cramer's Blog: Stocks Have Become 'Commodified'
Originally published on 6/13/2006 at 9:26 AM EDT
Nobody wants to bid on anything. That's the real takeaway from the
earnings conference call. When people speak of "no liquidity," that's just code for "I don't want anything, go sell it to someone else."
What's most compelling to me is that we always thought that one day, stocks would trade just like commodities, regardless of the underlying worth of the companies they represent. We always figured that a day would come where equities were just copper or aluminum, and they would rise and fall together. That day is here.
I see no differentiation between the way gold or palladium has fallen and the way that
has fallen. There might be the most positive pieces of news out for these two companies, but the fact is that they are stocks, and the stocks aren't trading right now on the fundamentals of the companies; they are trading as parts of baskets that no one wants.
In particular, I am seeing whole countries trade in lockstep, regardless of the fundamentals of individual companies.
Could all of these markets simply have gotten too high? Yes.
Are all of their stocks too low now?
But some of them will have a value outside of the baskets.
did today with the
did Monday with
the Jana Partners bid.
Are these needles in haystacks? I don't know. The declines have come so fast and furious that I have to believe that, while these few examples of value may be needles in a haystack, if we keep this pace up, we're going to have an awful lot of needles in the haystack. A bear just might get pricked if he's not careful.
But no need to be careful yet, not when every stock in every market is getting hit as if it was part of a wheat or corn basket.
All wheat and all corn may be very alike, but not all companies are.
We just don't know that yet in this free fall.
At the time of publication, Cramer had no positions in the stocks mentioned.
Rev Shark's Blog: Playing a CPI-Induced Bounce
Originally published on 6/14/2006 at 8:24 AM
"A great flame follows a little spark."
-- Dante Alighieri
Most traders will get better results if they simply defer to the existing trend and don't try to anticipate turning points. If they wait until there is a clear change in market character before committing their capital, they are likely to do better than constantly trying to catch the moment the market turns.
However, more aggressive traders with very short time frames may find that there are times when the odds of catching a quick move are in their favor. If you are an active short-term player who has a short-term time frame and doesn't let a trade turn into an investment, playing for a quick bounce can be a good approach sometimes.
This morning's conditions seem particularly ripe for some sort of bounce. The catalyst is the upcoming CPI number. The market is down so hard and the
has already made its hawkish inclinations so clear that bad news is very likely priced in. Hence, any news, good or bad, is likely to bring in some buyers.
In fact, the best conditions for a rally may be a higher-than-expected CPI number that sparks some initial selling. Because the bad news is already priced in, I believe buyers will quickly jump on weakness and reverse us back up.
CPI is a perfect catalyst at this juncture because the indices are quite oversold once again, and anecdotal negativity yesterday was the worst I've seen it since this downtrend started. Keep in mind that bounces can't be trusted to last long, but conditions are ripe for a spark that lights a fire. I'll have more after the report.
Cody Willard's Blog: Don't Bite the Beta
Originally published on 6/15/2006 at 3:14 PM
You see the high-beta rally accelerate, and you start wondering if this is the last great buying opportunity of the 21st century. I mean, look at all of these stocks out there that are up 5%, 10%, 15% or more today! I see scores of them.
I've finished selling all of my
and am now officially back in patience mode. As I'm getting a few emails from readers who are panicking over not participating enough in today's rally, it's important to remind people that "panic" is usually not the emotion you want to be feeling when you're pushing a trade button.
Think of it this way if it'll relieve some of the pressure: The
is only now back to where it was last Friday morning.
Finally, I'll just note that this spike is yet another dislocation in the financial markets, and that the last few rally dislocations like this certainly have not been buyable.
Steven Smith's Blog: Goldman Nibbles on Chips
Originally published on 6/14/2006 at 8:10 AM
upgraded the chip sector this morning, but it's not actually a bullish call as the firm merely went to neutral from underweight, and the note said they are "less negative" on the sector.
The specific names they cite for the upgrade are
. There was no mention of the three stocks in which I noted heavy call volume Tuesday --
in which we noted heavy call volume Tuesday.
Taken together, these are two pieces of incrementally good news that will have me looking at getting some upside exposure to the group.
Homebuilders also got a small piece of good news, and the group could certainly use it, as the MBA's mortgage application index rose 7% last week, its largest weekly gain in over two months.
But the bulk of the increase came in the form of refinancing, which was likely spurred by the decline in rates over the past two weeks. But no way am I fishing for a bottom again.
Tony Crescenzi's Blog: Bernanke Impresses
Originally published on 6/15/2006 at 4:11 PM
Chairman Ben Bernanke's body language and the manner in which he answered questions
at Thursday's speech in Chicago were superb, and he looked very much in his element.
Bernanke topped it off at the very end of his appearance with a witty response to the question of which team he would rather root for, the Cubs or the White Sox. "Whichever is in town," he said. For a man with arguably poor timing of late, the line was a symbol of his recent resurgence, which began last Monday when he delivered a bold speech on inflation.
I covered my short on Bernanke last Monday, and ever since then the Fed has sounded like the Fed of old. It has put forth a clear message and shown its resolve against a nemesis that has caused significant weakness in markets of late. The markets appear to concur, given the lowering of inflation expectations, the decline in commodity prices, the flattening of the yield curve and the steadying of the dollar.
As I said recently, now is not the time to short Bernanke, especially given the arrival of Donald Kohn (Greenspan's top strategist, with 36 years of experience at the Fed) as Fed vice chairman and Hank Paulson as Treasury secretary. The arrival of Paulson is important because in his weekly meetings with Bernanke, he will be able to dish out top-notch advice on communicating with markets. As a result of these arrivals, and with a few good lessons under his belt, Bernanke is likely to shine much more in the second half of the year than in the first. It's best to be long Bernanke at present.
George Moriarty is managing editor of RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He appreciates your feedback;
to send him an email.