Yesterday, we told you that the non-existent, end-of-quarter, illegal window dressing period would start. Dang…that was a good start. But not much has changed. The worst areas remain worst…the best areas remain best with one little change. It seems the BIOTECHS are ready for another leg up as many ramped and romped on Wednesday. The BIOTECH ETFs nudged out of range while big cap leaders like AMGN,CELG,GILD act well while BIIB comes up its right side. Also, a smaller name in REGN working. Keep in mind, there is a lot of ‘chatter” on a daily basis about the next rumored buyout in this group and other medical areas. 4 more days in the quarter and doubting the boys let go.
Regardless of everything said and written here, don’t forget it is end of quarter. At the end of a quarter, market players are not supposed to window dress…meaning they are not supposed to pump things up by buying a crapload of stocks they already own in order to have end of quarter statements look better. This is illegal. Of course, somehow, the track record of the last few days of every end-of -quarter is fabulous but don’t worry, market players would never do anything illegal.
So during this end-of-quarter window dressing moment that does not happen, we suspect with markets oversold and getting icky..let’s just say we would not be surprised to get a bounce in here. BUT…the bigger picture does not change. Just take a gander of the chart of the Russell 2000, Smallcap 600, Midcap 400, new highs versus new lows, advance/decline lines and you will get a picture of something less-than-thrilling.
The internals continue to deteriorate…but you already knew that’s what was going on. Everything we told you that was going on…is now worsening as the small caps lead down and the large caps start to come in. Amazingly, the Russell 2000 is now below the 200 day moving average with the Dow and S&P just one day off their highs.
Bottom line, we suspect there is more to come. Just remember, because of the printing of money, every time the market looked dead over the past couple of years, the pixie dust flew and the market turned back up. The problem is that every move back up came with internals that never reached highs while major indices did. But if there is one other thing sticking out that gives pause it is these 2 numbers….51 and 277. One day removed from highs brings us the numbers 51 and 277. That is 51 new yearly highs on the NYSE and the NASDAQ and 277 new yearly lows. This is an amazing number that tells us that underneath the surface, things are nowhere as good as the new highs in some major indices and tells you the big money is finding the biggest and most liquid names in the market.
Keep in mind, while the small cap indices continue to implode, the only other area even below the 50 day average is the midcaps. We will be watching to see if the DOW,S&P and the NASDAQ follow suit.
Alibaba has sales of $8.5 billion and has a $231 billion market cap. Just above its market cap is Chevron with a $236 billion market cap…but has $226 billion in sales. Next up, Wal Mart with a $245 billion market cap…with a whopping $480 billion in sales. But don’t worry. The Fed says there is no bubble. All is well.
If the White House reporters did their job the way the sport’s journalists did with Roger Goodell, maybe we would not have $17 trillion of debt, the IRS going after people, ISIS grow to this level, Benghazi, lies on healthcare and just about everything else. If only the White House reporters held this President accountable. They can learn a lot from Goodell’s recent press conference.
Speaking of Goodell, how in hell is he responsible for the actions of some of the thugs in the NFL?
Just what do those people marching this weekend want to do about global warming…I mean climate change?
The Giants won a game!!!
Not much has changed in the markets. All the divergences we have talked about here are still around with some getting wider. With the DOW at new highs and the S&P just below:
The RUSSELL 2000 and SMALL CAP 600 act like they have no bid. If we start to see the market correct significantly, the short play would be in those small caps as they really have no bid.
There were more new lows than new highs on the NASDAQ Friday while overall, new highs have not kept close to the market’s move up.
Bearish action remains in GAMING,REITS,HOUSING,COAL,ENERGY, OIL&GAS,GOLD,SILVER,METALS,ORES,COAL,CONSTRUCTION MACHINERY,RESTAURANTS,AUTOS,APPAREL and AUTO PARTS.
This all simply tells you it is a very split tape and the place to be is the large caps and areas that are working. They continue to be BIG FINANCIALS, LENDERS,BANKING and BROKERAGE,HOTELS,SEMICONDUCTORS,STEEL,TRUCKING,RAILS,HEALTH CARE,INSURANCE and PHARMACEUTICALS.
As far as BIOTECH, which has been a leader during the bull, seeing a few cracks but not enough to put the group down just yet.
In other words…no throwing darts as the tape remains very split…with a lot of “underneath the hood” weakness. The market had better not follow the Russell 2000.
As usual Shepherd Smith nails it!
Today is the much anticipated IPO for Alibaba Group. I will be sharing my thoughts on its debut with Gerri Willis on the FOX Business Network today between 5 and 6 PM ET.
Brian Balsanek was kind enough to share this article from IBD. I’ve posted it below to share a little insight on the company:
Alibaba Set For World’s Top IPO As China Giant Preps
Alibaba Group is positioned to be the largest IPO ever, and to hear Joseph Tsai, executive vice chairman, talk about the Chinese Internet giant, it’s just the beginning.
“We are only at the start of our journey, with many growth opportunities ahead of us,” he said in a Web video presentation promoting the initial public offering to investors. “We have a large market opportunity in China that we can build to a massive scale.”
Alibaba (NYSE:BABA) is already massive in many ways.
Its IPO is now expected to raise more than $21.45 billion, as the company on Monday raised its IPO price to a range of 66-68 per share, from 60-66.
If Alibaba fully exercises its overallotment of shares, it will become the largest IPO of all time, surpassing Agricultural Bank of China’s $22.1 billion listing in 2010, says IPO research firm Ipreo.
Alibaba is China’s largest provider of e-commerce services by a huge margin. For the 12-month period ended June 30, it processed $296 billion in gross merchandise volume — more than Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) combined.
A majority of total online GMV — the value of confirmed orders of products and services — in China occurs on three Alibaba websites that collectively have more than 279 million active buyers and 8.5 million sellers, the company reported in its IPO prospectus.
“Alibaba is the best-positioned company in the e-commerce space in China by far,” said Henry Guo, research analyst at JG Capital. “It has the brand name, market awareness and a dominant market share, with all the supporting components in place, to further drive growth,” he said.
Alibaba plans to sell 320 million shares.
Strong demand for shares among institutional investors is expected to push the price higher.
The company consists of nine business units, with operations across 290 subsidiaries. The bulk of revenue comes from its three primary e-commerce sites:
• Taobao.com, China’s top consumer-to-consumer online marketplace and a rough equivalent to eBay.
• Tmall.com, a business-to-consumer marketplace.
• Juhuasuan, where consumer groups can buy products at discounted prices by aggregating demand.
These three accounted for 81.6% of revenue for the 12-month period ended in June.
Alibaba gets most of its revenue from fees it charges customers to use the platforms. The company also operates Alibaba.com and 1688.com, which are wholesale marketplaces.