Alerts & Commentary
2/28 – Weekend Market Commentary
Goodbye February…!!!
Unfortunately this week most decidedly did NOT end on a good note. The DOW closed the week at its lowest level since OCT 1997…!!! The S&P closed at its lowest level since APR 1997…!!! And while the NAZ is not yet getting too close to its NOV 2002 lows, if we see more weakness in the weeks to follow I would imagine those lows will fall like a knife through soft butter.
Most discouraging however was that the DOW accelerated in volume as it passed below its recent lows to the tune of more than 50% over last week and was the highest volume clear down week since the week of OCT 6th… OUCH…!!!
It is very ugly out there folks, and where things stand right now, these markets could plunge at any time. Hopefully this would be the kind of huge panic sell-off that could set the stage for a reliable reversal bottom. It’s certainly no time to get trigger happy feeling like things can’t get worse. They can.
So keep your powder dry and wait it out. We may be nearing the big event we have all been expecting for quite some time. On any LT Long positions in your portfolios, keep them tightly hedged at or near Neutral… at the very least. Look at your trends, if some of your winners, like IDCC for example, look like they are rolling over, like IDCC does, tighten up, buy some Puts and manage your LT position as an Income generating trade rather than a LT appreciation trade until the signs, and the trends, turn upward once again.
Patience and Risk Management are the keys for the current conditions. There aren’t any heroes out there right now, but there is a whole lot of scared BIG MONEY.
Well… there may be one or two heroes out there… Pretty much everything appears to be going RMBS‘s way these days and we could see Settlements and/or Compulsory License Terms from Judge Whyte over the next couple of weeks. He ordered a final settlement opportunity for RMBS and Hynix on MAR 4th which will take place in Seoul, and he wants to see a settlement on the 9th (I believe). Otherwise, he will impose the Compulsory Rates on Hynix for all of the newest memory technologies, based on expert testimony heard during the trial, which was fairly compelling for a larger rate (9 – 12%) for the newer memory architectures. There are a wide berth of opinions, but it appears to be somewhere between 4.25% – 11%… but like everything RMBS, you never know.
Have a great weekend.
Coach BD
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