Al Gets Out The Snake Oil One More Time
The raison d’etre for the bulls took
place today, as all the faithful joined hands and once again conjured
up optimism that perhaps the 6th time would be a charm. As the rate
cut snake oil begins to reveal itself for the irrelevancy that it is,
we are beginning to see a glimpse of a market that is now becoming
increasingly uncertain. Uncertain about the fabled impending recovery
Wall Street has sold Main Street on. Uncertain about current quarter
earnings in the technology sector, as earnings estimates have been cut
by 50% since January. Uncertain about how the never-ending
stream of job cuts and layoffs will affect the consumers’ spending
habits. And, last but not least, uncertain about whether an
index such as the Nasdaq has any ability to rally, as it has lost
nearly 20.7% of its value since the first Fed rate cut on Jan 3, 2001.
Just last night, semiconductor firm Xilinx confessed that business had
gotten considerably worse since they issued prior guidance just a
month or so ago. It seems the only bottom that Larry Ellison is seeing
is in a thong bikini on board his 170 foot sailboat. It seems
Larry is obsessed with surpassing Gates as the richest man in America
and will do and say anything possible to bolster his stock price. On
CNBC yesterday, Larry Ellison said that Oracle stock was
“cheap” and that he wasn’t selling any stock, and
recommended that shareholders do the same.
Oh, you aren’t
selling any stock, Larry? Let’s see what the SEC filings reveal:
22-Jan-01 ELLISON, LAWRENCE J President, Chief Executive Officer,
Chairman 5,000,000 shares  ORCL Proposed Sale (Form 144).
Estimated proceeds of $160,041,000.
22-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 3,100,000
shares< Â ORCL Exercised Options at $0.23/Share and Sold at
$32.01/Share. Proceeds of $98,518,000.
23-Jan-01 ELLISON, LAWRENCE J President, Chief Executive Officer,
Chairman 5,000,000 shares  ORCL Proposed Sale (Form 144).
Estimated proceeds of $158,194,000.
23-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 5,100,000 shares
 ORCL Exercised Options at $0.23/Share and Sold at $31.64/Share.
Proceeds of $160,191,000.
24-Jan-01 ELLISON, LAWRENCE J Chairman of the Board, President, Chief
Executive Officer 5,000,000 shares  ORCL Proposed Sale (Form
144). Estimated proceeds of $153,638,500.
24-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 4,900,000 shares
 ORCL Exercised Options at $0.23/Share and Sold at $30.73/Share.
Proceeds of $149,450,000.
25-Jan-01 ELLISON, LAWRENCE J Chairman of the Board, President, Chief
Executive Officer 5,000,000 shares ORCL Proposed Sale (Form 144).
Proceeds of $114,405,750.
26-Jan-01 ELLISON, LAWRENCE J Chairman of the Board, Chief Executive
Officer 2,232,000 shares ORCL Proposed Sale (Form 144).< Estimated
proceeds of $67,158,801.
26-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 4,225,000 shares
 ORCL Exercised Options at $0.23/Share and Sold at $30.09/Share.
Proceeds of $126,158,500.
29-Jan-01 ELLISON, LAWRENCE J Chairman of the Board, Chief Executive
Officer 5,000,000 shares  ORCL Proposed Sale (Form 144).
Estimated proceeds of $151,991,265.
29-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 2,315,000 shares
 ORCL Sold at $30.22 — $30.49/Share. Proceeds of $70,364,300.
29-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 1,082,000 shares
 ORCL Exercised Options at $0.23/Share and Sold at $30.03/Share.
Proceeds of $32,243,600.
30-Jan-01 ELLISON LAWRENCE J REV TR U/A DTD 12/08/95 Trust, Trustee
5,000,000 shares  ORCL Proposed Sale (Form 144). Estimated
proceeds of $152,742,000.
30-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 3,237,576 shares
 ORCL Sold at $30.21 — $30.83/Share. Proceeds of $98,903,154.
31-Jan-01 ELLISON, LAWRENCE J Chief Executive Officer 1,300,000 shares
 ORCL Sold at $30.35/Share. Proceeds of $39,455,000
Total of nearly 65,000,000 (65 million) shares sold by Larry Ellison
in the month of January, 2001.
“I’M NOT
SELLING ANY STOCK.”
Indeed, Mr. Ellison.
Nevertheless, guys like this can get
the bulls all excited with his fantasies and unfounded projections.
Ellison will certainly have a huge chapter in the book I will write
about the market crash after it happens in the next few years. He is
certainly every bit the champion of Wall Street.
So here we are, at a crossroads once again. The market has slowly bled
from its May 22nd highs as Wall Street has done another outstanding
job of convincing people to buy the tape at the top and on the way
down. Now what? Although it can’t be denied that the market has
some very oversold technical readings that have paved the way for
rallies in the past, it appears that still more work on the downside
needs to be put in and lower support levels tested before the market
can attempt a sustained push. Of course, we are looking at holiday
trading dynamics for next week with the 4th of July holiday and this
usually results in rallies as the sheer number of bulls always
outnumber bears. In addition, the shady money managers out there will
need to push up their numbers before the end of the quarter this
Friday as well (as with the Loch Ness monster, there has been no
scientific evidence gathered to the validity of this phenomena but
many close to the action seem to accept it as truth). The only thing
to do here is to play the charts and not the news and/or sentiment.
The charts don’t lie and if you see a setup, take the trade and be
sure to determine your stops and risk tolerance well ahead of time.
This is not a time to play hero and try to manufacture profits. They
will come when they come, don’t try to make them materialize out of
thin air. See you Thursday on Webfn at 5:30 PM ET.
Some quotes for the day:
“Now that much of television ‘news’ has degenerated from facts
into a combination of pornography, entertainment and the type of
scandal mongering that had previously been restricted to the Enquirer,
financial television has comparably degenerated into a din of inequity
by self-styled ‘experts’ ballyhooing this or that, increasingly acting
as if they had been gargling with bong water.”
                                 Â
-The Dines Newsletter, June 22, 2001
“The epic rape of the middle class continues daily, televised for
our enjoyment. People I know who are not invested in the market (ie.,
older, wiser folks) but who watch CNBC are astounded by the obvious
corruption and consider it laughable. I suppose the investment-class
American has been so brainwashed, he can’t see the obvious.”
“Shortly before Fed time, I happened to answer the phone.
Somebody said to me, “Get ready to get squeezed for about the
next two months” and then hung up. That shows a great degree of
brazenness…as the timing of these nasty calls and emails almost
always coincided with the end of whatever rally was
underway.”Â
           Â
-both quotes taken from Bill Fleckenstein’s “Rap”
Have a great day!!
Goran