Prefer a Yield - Cramer’s Lightning Round (10/10/08)
October 10, 2008
Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program, Friday, October 10.
Bullish Calls:
Prefer a Yield - Cramer’s Lightning Round (10/10/08)
10 Oct 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
October 10, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| STMP | 365% |  11.20% |
news | |
| PSEC | 296% | 10.76% |
news | |
| CERN | 293% | 34.98% |
news | |
| DECK | 260% | 94.55% |
news | |
| CWCO | 238% | 12.81% |
news | |
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10 Oct 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
10 Oct 2008 11:30:00 - Top 5 Stocks up on Unusual Volume
October 10, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| DECK | 230% |  81.99% |
news | |
| CTSH | 153% | 16.83% |
news | |
| SRCL | 109% | 50.02% |
news | |
| AAPL | 103% | 90.26% |
news | |
| TISI | 99% | 28% |
news | |
|
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10 Oct 2008 11:30:00 - Top 5 Stocks up on Unusual Volume
The Madness Continues; Don’t Buy Stocks In A Falling Market
October 10, 2008
I have said about everything I could say the past three months regarding this market but I have to admit I never expected this type of selling. What is more shocking about this selling is that I don’t see fear everywhere that I should see fear.
Granted the VIX is now over 60 and closed at 63.92 which is the highest close since the 1987 crash. However, while the market sells off and gives it one of the ugliest index patterns ever seen, the put/call ratio is only at 1.2. Two days ago it hit 1.3 which is the high of this recent downturn. But can you believe that back in March the put/call ratio hit 1.5 to 1.6. So there was technically more fear in March than there is now, in the options market. So just because the VIX is at 63 does not mean we are near a bottom. We need to see everything line up.
Another sign that we are getting pretty darn oversold (doesn’t mean we have to bounce) is the new highs to new lows. The NYSE, Nasdaq, and AMEX combined had a total of 41 new highs (most new highs are ETFs) to an outrageous 2,656 new 52-week lows. This is just shocking to see how many stocks are hitting new lows and to see how many pages IBD needs to list them all is just staggering. What is more shocking and should be very interesting to everyone is that back in the 2000-2002 selloff the NYSE only had 912 new 52-week lows in 2002, at its worst point. On 10/08/08, the New Lows reached an unprecedented level of 1836. This is a clear sign of panic selling with NO buyers interested in perceived bargains. So the new 52-week lows are 101% higher than what they were at their worst day in 2002. If this along with the VIX doesn’t show a market that is too far from rational prices, I don’t know what would.
Another sign that the crowd is getting very bearish while the market is getting very oversold is that the Investors Intelligence survey came out and showed bulls collapsing to only 25.3% bullish. This is a new 5-year low. At the same time the bears leaped to 53% which was also a 5-year high. So the professional newsletter writers have not been this bearish with so few bullish in over five years. That is another sign that we are running on high levels of fear right now.
Some good news for some is that the short-interest on the NYSE fell dramatically the past couple of days to 10.60 which is well off the highs of LAST MONTH of 17.99. Now, I have to admit I am not sure if that is good or not. But what I do know is that making short-selling illegal would be a HUGE mistake. When there is no one left that wants to buy a stock and it falls and falls, shorts are there to cover their stock as prices fall which then cause other shorts to cover to claim their big profits and then watching the stock rise on the big volume off the short sellers new buyers come in and buy the “bargains” that lower prices have made. Let’s pray to God that they don’t make shorting stocks illegal. You saw how well it did for the 800 or so financial stocks that were going lower no matter what. The only difference this time is that you now do not have the shorts covering buying power to help establish a floor for real buyers to come in and buy. Instead a stock can go all the way to zero and nobody might come to town to buy the stock because the covering was not there to indicate to them buying interest was back in the stock.
As for my opinions on this market, I am keeping them the exact same that I have kept it almost all year long. CASH IS KING!!!! If you are an experienced investor you can go short with me and rack up some nice gains. However, I would prefer new investors to stay away from the shorts. If you decide that you are ready to short (uhm…you are a LITTLE late), make sure you only use a very small portion of your account. There are still some stocks out there to short but most of them have already come crashing down. So if you are really smart you would just stay in cash (the US Dollar is strong) and wait till that magical Follow-Through Day comes with many beautiful green to max green BOP charts and CANSLIM stocks that setup to become tomorrows winners in today’s market.
We may be a ways from moving higher again but don’t forget we have a VIX at 63, a put/call at 1.2 (we need 1.6), bulls at 25% and bears at 53%, and the NYSE with over 1,800 new lows on 10/8. If all of these outrageous reading don’t mean that we are close to a bounce or a real rally, then the market has really changed and there is nothing we can do but wait for the beautiful green BOP filled CANSLIM charts to appear again. When those flat bases, cup with handle patterns, flag patterns, and ascending bases show up again, I will be there ready to load the boat with the best looking stocks with the best fundamentals.
Remember, when the market turns around, just like in 2003, most stocks will be “cheap” but have earnings and sales growth that show a real turnaround. That is where the biggest and easiest money is made. If you don’t believe that, then I would love for you to please go study all my ‘Past Big Winners’ of 2003 under my longs section and see for yourself that the best bull markets come from bear markets.
This market will bottom and we will have another bull market one day. Don’t get discouraged and the last thing you should do is give up. NEVER give up, NEVER. Another bull market will come. Max green BOP loaded charts breaking out of sound bases on large volume will come. Just don’t give up. Losers give up. Are you a loser? I sure hope not. If you are here then you are not a loser and you just need to be patient, stay calm, and relax. Remember, the best bull markets are born from ugly bear markets. They don’t get much uglier than this. For now, CASH IS KING!!!!! Aloha!!!!
The Madness Continues; Don’t Buy Stocks In A Falling Market
Comparing Crashes
October 10, 2008
Robert Freedland submits:
How do you describe the trading action on Wall Street?
A "correction?" A "Bear Market?" Or is it more like a slow-motion crash? A crash that isn’t really that slow at all.
Mortgage Rates Falling [Housing Tracker]
October 10, 2008
Seeking Alpha’s Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.
Mortgage Trends
Mortgage Rates Falling [Housing Tracker]
By Any Definition, a Crash
October 10, 2008
Toro submits:
The Russell 3000 has dropped 23% this month. That is in seven trading days. This is, by any definition, a crash.
The market has given back all its gains since May 2003. Heck, it hasn’t done a thing since 1998.
How NOT To Think About Investing
October 10, 2008
Jeff Miller submits:
Many stocks, perhaps most stocks, are trading at prices that do not reflect fundamental value, as determined by traditional methods. The excellent team at Bespoke Investment Group, one of our featured sites, provides a great list of stocks trading at "crazy" P/E ratios. (Since P/E is only part of the story, perhaps you should subscribe to their premium service.)
Unfortunately, we own a few stocks on that list. Our cheap plays got even cheaper.
What Just Happened?
October 10, 2008
Felix Salmon submits:
I’ve long said that end-of-day market reports are silly, since the only thing reporters can normally say with any confidence is "the market moved and we don’t know why." But what we’re seeing right now isn’t moves so much as fully-fledged earthquakes. Even during a bear market, you don’t expect three 700-point down days to come in quick succession like this: if anything, you expect big one-day rallies, followed by more grinding-yet-inexorable decline. The big one-day plunges happen at the top of bull markets, when bubbles burst. But we were already down 35% when the market opened Thursday. Now we’re down 42%. Whatever that might be, it sure ain’t a bull market.
In any event, I have no idea what happened in the last hour of trading Thursday. I could speculate: maybe it was that story saying that Treasury might start taking equity stakes in banks "within weeks". That might as well be next century as far as this market is concerned: I’m sure I wasn’t the only person anticipating a big equity injection into Morgan Stanley this weekend.
The Dow, One Year After the Peak
October 10, 2008
Zubin Jelveh submits:
One year ago, the Dow closed at 14,164.53.
Yesterday, after a dramatic late-day collapse, it finished at 8,579.19.
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