Riiiigggght..Low inflation.
Posted on 06/23/2005 3:24:04 PM PDT by blueberry12
Following today's Supreme Court decision and a great selling day on Wall Street, it may be time to sell your stocks soon and go cash only for awhile. I think there is a high probability of an intermediate down trend occurring in the near future, a leg down in the general market. Here are the reasons why I think it's time to sell:
1. Last week Thursday near market close, investment funds or insiders traded a large chunk. They all moved at the same time. Here is a brief list of what happened on 06/18/2005 at market close:
| MSFT | (Microsoft) | 505 million dollars | (0.18%) |
| GE | (General Electric) | 474 million dollars | (0.12%) |
| INTC | (Intel Corp) | 300 million dollars | (0.17%) |
| C | (Citigroup) | 285 million dollars | (0.12%) |
| WMT | (WalMart) | 196 million dollars | (0.09%) |
| AIG | (American Intl Group) | 177 million dollars | (0.12%) |
| AAPL | (Apple) | 152 million dollars | (1.00%) |
The percentages next to the dollar values tell you what percentage of the companies' shares changed hands in a single transaction. This kind of activity is a little bit rare.
These are just some of the stocks. Almost all stocks had similar transactions on Thursday. If these transactions were sellings, then that will definitely drive the market down.
2. The American government took another step toward communism today. This is definitely not good for the markets: The Supreme Court ruled that local governments may seize people's homes and businesses against their will for private development in a decision anxiously awaited in communities where economic growth conflicts with individual property rights.
3. "Low interest rates are a sign of a stagnant economy, and the low inflation rate simply reflects the inability of most businesses to pass along increased costs." -- Larry Burkett
I have not written this article because I sold the market. I haven't sold yet. DISCLAIMER: Everybody should make their own decisions when it comes to trading and investing. The only reason why I wrote this is because I thought I would share some of my findings with you. I may be totally wrong though, so make your own decisions!
(Sorry, 06/18/2005 was Saturday. I meant to write 06/16/2005.)
Simply dead wrong - Inflation has been able to stay low with great expansion in the American economy because of continued increased productivity!
The notion that having inflation would be some sort of positive sign is silly -
Riiiigggght..Low inflation.
If these transactions were sellings, then that will definitely drive the market down.
Somebody bought each share that was sold.
If we would stop putting $45+ oil into SPR a barrel of oil would drop $10 within a week -
I consider this a time to buy. Ammo, that is. 
But the question is WHO BOUGHT THEM? If market makers bought them, then they are going to redistribute the shares to the individual traders, and this great supply will push prices down. On the other hand, if two rich people make a trade. Let's say one of them sells 500 million dollars worth of stock and the other buys the same amount, then the price does not move much.
What happens often is that a fund manager wants to sell 20 million shares, so the market maker buys them. It's one transaction. But the market maker doesn't want to hold on to 20 million shares. His job is to make the market liquid, so he wants to sell those shares. And he does it slowly in the following weeks. He slowly distributes these shares to traders and investors who want to buy. So, this way the 20 million shares is eventually owned by small individuals.
Usually people who trade big money like 20 million shares in Microsoft do those transactions, because they know things that you and I do not know...
Yes, distribution is a concern. Good points.
Every transaction is selling,,,and buying.
And if the transactions have already occured, how will that drive the market down?
Fascism, not communism.
Because they have different opinions.
I hope you don't do this for a living.
I don't. Do you?
Yep
Awesome! Did you notice today the big trade in QQQ? Somebody just traded 925 million dollars. This is very unusual. I have never seen such a huge trade in the QQQ. I take a look at the QQQ daily chart everyday to see what happened during the day. I noticed in March 18, 2005 that somebody traded 500 million dollars, and a downtrend began. In November 3, 2003, somebody traded 700 million dollars in the QQQ; the uptrend was soon exhausted. I wonder what will happen this time. I have a feeling that it will go down, but I have no idea how much.
And if the transactions have already occured, how will that drive the market down?
If you make a 20-million-share all-or-none transaction with a market maker, then that will generate hundreds of other transactions in the following week(s) that would not have occurred without your trading. Go to #9.
BTW, I won't be surprised if you don't believe me, but the truth is a funny thing sometimes.
Gotta go, have a nice weekend.
PS, the current symbol is QQQQ.
You have a fundamentally flawed understanding of the business. And I don't mean that as an insult.
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