7/15/02 Addendum and Update
Last
week I wrote the column in an old file and inadvertently didn’t
properly update the week’s highs and lows. I
apologize!!!Quaker City
Bancorp
(
QCBC |
Quote |
Chart |
News |
PowerRating) @32 on 32 ops on 7/9, and we WERE stopped
out of short Cable & Wireless
(
CWP |
Quote |
Chart |
News |
PowerRating)
@8.2 on the gap up open of 7/8 via our 8.1 ops.
For the model portfolio, we had
2500 shares of QCBC originally purchased at 32 (2500
X 32 = $80,000, or 8% allocation per trade) which were mistakenly marked to
market at 31.24 last week instead of the stop-out of 32. This gives us $1900
more profit minus commissions of $50 = +1850.
On CWP we had 10,250 shares
(10,250 X 7.77 = 79643 the last 50 shares under 80,000, or 8% rounded down)
which were mistakenly marked to market at 7.84 instead of the stop-out at 8.2.
This gives us —3690, plus commission of 50 = -3740 on our model one
million portfolio. Negative 3740 + 1850 = So
we ended the week up $66,140 instead of $68,030, or 6.6% YTD.
I apologize for the error,
which I should have caught since our alarms went off for both stocks in our real
portfolios. Excellent job to those who
caught these errors before we did!
Here’s a brief update.
All but the Dow Industrials and Transports have made lows below the Sept.
30 lows. The world index is a hair from
making new lows. The bear market is
clearly on. The VIX and Sentiment are
overdone on the downside, but they may not work the same way in a bear market as
they did in a secular bull market before. The
market is ripe for a rally, but needs a catalyst that can push it up for more
than week or a few days. The real
question is whether the decline in the market will begin to impact the entire
global recovery. So far, commodities
markets are saying not yet. EMs are also
holding up reasonably well, particularly in Asia and Eastern Europe.
Investors need to watch carefully to see whether commodities prices
(nickel and tin and the CRB and Goldman Sachs indexes) along with the stronger
EMs start to fall in sympathy with further market declines, and whether US and
global bonds begin to rally toward their September ’01 highs.
Unless these markets begin to take their lead from the US meltdown, we
can’t assume that the global recovery will be aborted.
Watch carefully! Is another Fed
rate cut or other intervention action in the works?
Mark Boucher