Posted on 05/17/2004 7:02:42 PM PDT by churchillbuff
I'm a big Bob Brinker fan, but missed him this weekend. Did anyone hear him? Does he think the secular bear has raised its head, or are we in a correction, a buying opportunity?
news home | top | world | intl | natl | op | pol | govt | business | tech | sci | entertain | sports | health | odd | sources AP • Reuters • New York Times • CBS • MSNBC • USA TODAY • FOX News • Poll • Photos
Stocks Hit 2004 Lows on Iraq, Oil Prices
Email this story
May 17, 4:42 PM (ET)
By Vivian Chu NEW YORK (Reuters) - Stocks sank on Monday, with all three major market gauges falling to their lowest levels this year, after the killing of a key figure in Iraq's new government increased investors' worries about geopolitical instability and helped push U.S. oil futures prices to their highest levels in 21 years of New York trading.
Citigroup Inc. and Microsoft Corp. were the biggest drags on the Standard & Poor's 500 Index. Weakness in Qualcomm Inc. and Microsoft held back the technology-laden Nasdaq, which fell to a low unseen since October 2003.
Surging oil prices continued to rattle investors, who worried that escalating energy prices would hurt consumer spending, one of the drivers of the economy's recovery. Crude oil futures ended higher in New York on Monday, but had retreated from the record high of $41.85 a barrel hit in overnight trading.
"My big concern a few weeks ago was the stock market was too focused on interest rates, but clearly it's now focused on instability in the Mideast, which is leading to higher oil prices," said Robert Mikkelsen, senior managing director of equity capital markets at The Advest Group.
However, "volume looks like it's going to come in below average, which leads me to believe a lot of investors are sitting on the sidelines," Mikkelsen said. "In the short term, I still expect to see a high level of fear and nervousness."
The Dow Jones industrial average ended down 105.96 points, or 1.06 percent, at 9,906.91, while the broader S&P 500 Index fell 11.62 points, or 1.06 percent, at 1,084.08. These mark the lowest closing levels for both the Dow and S&P 500 since December 2003.
The Nasdaq Composite Index slid 27.61 points, or 1.45 percent, to 1,876.64, its lowest finish since last October.
U.S. Treasury bond prices rallied in response to the violence in Iraq as investors bought safe-haven government debt, pushing down the yield on the benchmark 10-year note to 4.69 percent from Friday's close of 4.77 percent.
The major stock indexes rose from their session lows in mid-morning trading after the U.S. military reported an artillery shell had exploded in Iraq, releasing a small amount of the nerve agent sarin. It was the first news of the discovery of any of the weapons on which the Bush administration made its case for war.
"It's probably a relief reaction, since it may give credence to the argument over weapons of mass destruction that the Bush administration made for going to Iraq," said Brian Bush, research director at Stephens Inc., in Little Rock, Arkansas. "We're under such scrutiny worldwide. Any news that would elevate the U.S. standing is positive."
Trading was active, with 1.43 billion shares changing hands on the New York Stock Exchange, higher than the 1.4 billion daily average for last year. About 1.53 billion shares were traded on Nasdaq, below last year's 1.69 billion daily average.
Lucent Technologies topped the New York Stock Exchange's most active list, falling 18 cents, or 5.5 percent, to $3.10. On Monday, the U.S. Securities and Exchange Commission said it charged 10 individuals with securities fraud for their roles in accounting problems at the telecom equipment maker.
Lucent also finalized a previous settlement with the SEC and will pay a $25 million civil penalty in the case for failure to cooperate with government investigators. The SEC had accused Lucent of fraudulently and improperly recognizing revenue.
Lowe's Cos. shares fell, even after it reported its quarterly profit rose, helped by sales of higher-priced items like kitchen cabinets, and an expansion into big U.S. cities.
Shares of Lowe's, the world's No. 2 home improvement retailer after Home Depot Inc., fell 90 cents, or 1.8 percent, to $49.68 amid concerns that high energy prices and rising interest rates may hurt home improvement spending, analysts said.
But Kmart Holding Corp. rallied, after the discount retailer posted its second straight quarterly profit as it cut costs, though sales tumbled after it closed hundreds of stores last year.
Shares of Kmart, which emerged from bankruptcy last May with a new management team, fewer stores and lower debt, jumped $4.32, or 9.8 percent, to $48.62.
Security concerns took center stage after a suicide car bomb killed the president of Iraq's Governing Council on Monday, dealing a major blow to the U.S. coalition battling a Shi'ite insurgency and a growing prisoner abuse scandal.
Crude oil for June delivery settled at $41.55 a barrel, up 17 cents, but below a $41.85 record high in overnight trading, which was the highest price since the New York Mercantile Exchange introduced oil futures trading in 1983.
Gasoline prices also shot up to another intraday record high of $1.4250 a gallon for the NYMEX June contract, amid persistent concerns about gasoline supply and Middle East unrest. Instability in the Mideast has fed fears of possible disruptions of oil supplies from the region, traders said.
The spike in oil rippled through global stock markets, sending European stock markets to their worst close in almost two months and slamming shares in Tokyo and Hong Kong.
He'd do you guys a much bigger favor to let you know to sell at the top, instead of riding the market down like a diving submarine.
If he'd stuck with his original one-year cyclical bull market within a secular bear he'd be closer to the mark. But he got caught up in the euphoria and missed the top.
I actually couldn't listen to very much: his ego is costing his subscribers big money.
This article is a good argument for diversity in one's investment portfolio. When one is down, the other will be up.
Wait a second. Brinker called the top in 1999/2000. He called a bottom last year. Those two signals were right on the money. What's your beef?
He also advised subscribers, probably in late 2000, to buy QQQ call options at something like $83. Anyone foolish enough to do that lost a bunch.
You pay that guy for his advice?
During "normal" times that is true. But during crash-like conditions, stocks go down, bonds go down, even gold shares go down.
That is when you want to be in cash or short, if nimble enough.
You're saying we're in a crash? If so, why is the fed still talking about raising rates? They can't agree with you ...
People who followed his advice in the 90's made a huge killing in the market, that he SAVED with his call in 2000. Last year he issued a buy signal that got me back in on the DAY the market hit bottom. He follows a stock market model that looks at technical info, and his model doesn't say get out yet. This may well be a buying opportunity, as the market is over reacting to the interest rate and war news. The economy is still growing by leaps and bounds, so this Bull probably does have some legs yet.
And yes I plan on putting my money where my mouth is, I do plan on some purchases in the next few days.
Looks like Brinker's done OK by you
The best theory I have is the James Dean movie "Rebel Without a Cause" -- the chicken race scene. We are racing China and Europa to the cliff edge or over. Greenspan's applying the brakes at the last possible moment and hoping China, if not Europa, goes over the cliff -- and that we don't.
Since when does the Fed forecast crashes? That's a joke. They are under the impression they prevent crashes, but the cumulative effect of what they do (e.g. holding rates to an emergency low for no reason thereby creating a credit/debt bubble and excess speculation) makes a crash more likely when things unwind.
I didn't say we're in crash conditions now, anyway. But between now and the end of the year wouldn't surprise me in the least.
i agree, brinker has been one of the best market timers in the business. he knows when to be a bear and when to be a bull. some people are just always bearish.
especially around here ...but never fear...even though they always eschew equities....they are sages at metals.
Gold bugs...
10:02 Nikkei up 143 pts to 10,649.03 by midday break (From CBS.MarketWatch.com)
You know....last week at around 10,400 DJI, I called my investments overseer and asked about cashing out....I felt that we had some more correction coming.
I should trust my instincts more often.
The market is up over 40% year to year. A correction is normal and healthy.. When you don't have healthy corrections, you wind up with 1929, 1987 and the 2000/2001 Dotcom meltdown...
There is a subscription service for Brinker followers that will provide a description of what BB said if you missed it. (Of course you can also subscribe to BB on demand at his web site.) But I have enjoyed David Korn and he is not charging much. Here is his latest data, sent out this evening:
Hello subscribers!
Its the evening of May 17, 2004. I am adding a significant amount of
equities to my portfolio based on the market's close today. I think we are
just about done this correction. David noted that what he is doing should not be taken as advice, (I am holding.) But Brinker does think there is still some upside out there.
Here is a link to a web page run by DavidK:
Link http://www.begininvesting.com/
I bought a major stake today and am doing well. Brinker has been excellent in his calls. If you want to claim he missed the top we will need to see much more decline than has already happened. By the way he said the cyclical bull would last 1-3 years he never limited it to one year. He has also said not to expect another 45% increase like we had last year.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.