On the one hand, part 1
There are so many things to say, I struggle as to where to begin. Perhaps if I compile and answer here your more pertinent questions:
1) I'd love to hear any new analysis you might have regarding Genentech/DNA, which I think was last mentioned in your Entelechy post. Lots of volume yesterday on good quarterly results, but possible overhang from new Imclone data.
2) I notice that the earnings aren't so historically good with Isis Pharmaceuticals/ISIS and occasionally some other stocks that you mention. How big of a part does that play in your evaluations?
3) ISIS really took a tumble today. Do you still think it's good to hold on to?
4) Would you comment on my observation that American Health Services/AHS has broken below its consolidaton stage?
I perceive these questions to be mostly of a piece. Each wonders about directional trends. The market decline that I posited several weeks ago gathers force. I suspect and expect a doozy of a decline that should occur soon. Very soon. If you want a time frame, I suspect that February will prove a difficult month, to state it gently. Although the market averages and indices might decline only 5-10% -- of course, the decline could be worse, if the decline even occurs -- individual stocks could, and would, fare worse. Far worse. The leaders, my stamping ground, bridle at the coming winds of change. They lead down. It also would not surprise me that a negative opening today for the markets and the leaders could reverse and close higher; such action is par for the course and also part of the clue set.
Yes, AHS has breached support (the rising 50 day sma). I would be surprised, however should the decline plumb lower than $24-22. Yes, upward trading (time frame!) momentum has dissipated for ISIS; investor support lies, as limned, at ~$10. That level is an inflection point for investors to purchase and its crucial line of support. Whether it remains good to hold depends on whether you have the intestinal fortitude to hold during a decline from above $12 to $10+. DNA looks phenomenally good; nonetheless, a return to ~$80 would not surprise me if the markets trip in the coming weeks.
5) Well, you warned your readers. Good call.
Yes, I did; what the subtle clues only hinted at several weeks ago, now becomes increasingly obvious to all observers. This means I have relinquished all trading positions, retaining only investment positions. Leaders are reversing down on good news. For example, Apple/AAPL, which I suggested mere days ago as a culmination run, now looks set to probe into the $70s; I look every day for countermanding clues. AAPL's first test of crucial trading support lies just beneath yesterday's closing price -- the 50 day sma now at ~$88; from that price a bounce could ensue, and the tea leaves reading would begin anew. Too, Google/GOOG looks likely to be spanked. Hard. That spanking, if it happens, could occur as early as its earnings report due in 12 days:
This potential decline for the markets, should it occur, need not be worse than a typical oscillation from relative highs to relative lows. It could be akin to the decline that occurred in mid-May last year. (Which so happens to be another major price movement I warned you about.) That decline, ferocious as it was (Do you recall?) ended officially in early-September, a mere 3 months later, when the price rallied above the early-May high price levels. The markets' structure, patterns, and set-ups today are eerily similar to those only 8 months ago.
Of course, I could be wrong; it would not be the first, nor the last, time. However, if you slice the market into epochal movements, then it pays to be aware of any possible and potential countervailing directional move. This sequence of posts serves as my warning. What you do with this information is, as always, your decision.
-- David M Gordon / The Deipnosophist
1) I'd love to hear any new analysis you might have regarding Genentech/DNA, which I think was last mentioned in your Entelechy post. Lots of volume yesterday on good quarterly results, but possible overhang from new Imclone data.
2) I notice that the earnings aren't so historically good with Isis Pharmaceuticals/ISIS and occasionally some other stocks that you mention. How big of a part does that play in your evaluations?
3) ISIS really took a tumble today. Do you still think it's good to hold on to?
4) Would you comment on my observation that American Health Services/AHS has broken below its consolidaton stage?
I perceive these questions to be mostly of a piece. Each wonders about directional trends. The market decline that I posited several weeks ago gathers force. I suspect and expect a doozy of a decline that should occur soon. Very soon. If you want a time frame, I suspect that February will prove a difficult month, to state it gently. Although the market averages and indices might decline only 5-10% -- of course, the decline could be worse, if the decline even occurs -- individual stocks could, and would, fare worse. Far worse. The leaders, my stamping ground, bridle at the coming winds of change. They lead down. It also would not surprise me that a negative opening today for the markets and the leaders could reverse and close higher; such action is par for the course and also part of the clue set.
Yes, AHS has breached support (the rising 50 day sma). I would be surprised, however should the decline plumb lower than $24-22. Yes, upward trading (time frame!) momentum has dissipated for ISIS; investor support lies, as limned, at ~$10. That level is an inflection point for investors to purchase and its crucial line of support. Whether it remains good to hold depends on whether you have the intestinal fortitude to hold during a decline from above $12 to $10+. DNA looks phenomenally good; nonetheless, a return to ~$80 would not surprise me if the markets trip in the coming weeks.
5) Well, you warned your readers. Good call.
Yes, I did; what the subtle clues only hinted at several weeks ago, now becomes increasingly obvious to all observers. This means I have relinquished all trading positions, retaining only investment positions. Leaders are reversing down on good news. For example, Apple/AAPL, which I suggested mere days ago as a culmination run, now looks set to probe into the $70s; I look every day for countermanding clues. AAPL's first test of crucial trading support lies just beneath yesterday's closing price -- the 50 day sma now at ~$88; from that price a bounce could ensue, and the tea leaves reading would begin anew. Too, Google/GOOG looks likely to be spanked. Hard. That spanking, if it happens, could occur as early as its earnings report due in 12 days:
Google/GOOG will hold its quarterly conference call to discuss Q4 2006 financial results on Wednesday, January 31, 2007 at 1:30 pm PST (4:30pm EST). The live webcast of Google's earnings conference call can be accessed at http://investor.google.com/webcast.Alternatively, GOOG could decline toward ~$450 in advance of the report, and thus set up for a strong rally. At this moment, I see nothing that says a decline would be deeper than ~$425.
This potential decline for the markets, should it occur, need not be worse than a typical oscillation from relative highs to relative lows. It could be akin to the decline that occurred in mid-May last year. (Which so happens to be another major price movement I warned you about.) That decline, ferocious as it was (Do you recall?) ended officially in early-September, a mere 3 months later, when the price rallied above the early-May high price levels. The markets' structure, patterns, and set-ups today are eerily similar to those only 8 months ago.
Of course, I could be wrong; it would not be the first, nor the last, time. However, if you slice the market into epochal movements, then it pays to be aware of any possible and potential countervailing directional move. This sequence of posts serves as my warning. What you do with this information is, as always, your decision.
-- David M Gordon / The Deipnosophist
Labels: Market analyses
posted by David M Gordon | 6:14 AM
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