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Ralph Acampora, widely considered the “godfather of technical analysis,” is cancelling the bearish call he made earlier this summer, after stock indices hit new highs, WSJ’s Tomi Kilgore reports. ” ‘You have to have discipline,” he said. “As ugly as the Dow [Industrials] got, it didn’t break down. That said to me: Ralph, back off.”
It Feels Like 1999 — Is This Time Different? (Josh Brown)
With stock indices at all-time high and tech stocks breaking four figures, one is apt to start thinking the market is getting ahead of itself, like it did in 1999. Josh Brown says that on the surface, this time looks different. “Stocks like Facebook and Google are going bananas but they are insanely profitable companies with billions and billions in real business. Priceline isn’t Webvan. Salesforce.com isn’t Commerce One.” Still, he can’t help shake the trauma of that infamous year. “So far, the Rocket Fuel Hypothesis looks correct, but it seems too easy. Are we pulling forward the entire Santa Claus rally into October? Too much, too soon?”
Between Oct. 1 and Oct. 16 the Dow climbed 1.2%. Venture Capitalist Chamath Palihapitiya says that’s because the world capital of wealth creation is no longer in New York, and definitely not in DC, but in Silicon Valley. As he told a recent conference: “We are becoming the eminent vehicles for change and influence, and capital structures that matter. If companies shut down, the stock market would collapse. If the government shuts down, nothing happens and we all move on, because it just doesn’t matter. Stasis in the government is actually good for all of us. It means they can neither do anything semi-useful nor anything really stupid. They just sit there and they just kind of, you know …[APPLAUSE]”
The New Wall Street Parlor Game Is Picking Activist Targets (Michael Santoli)
2013 will go down as, among other things, the Year of the Activist Investor. Between Carl Icahn’s market-moving Tweets and the saga of Bill Ackman, companies’ fortunes have been transformed by lone wealthy individuals. Yahoo’s Michael Santoli says the new parlor game on the Street is now figuring out which companies will get targeted next. “This, in a sense, is the same as sifting for companies with a financial cushion, inefficient balance sheet, lagging margins, sputtering strategies or disparate businesses that might be spun off. So, even if no activist emerges, the stocks are usually conservatively valued, with low investor expectations and room for fundamental improvement.”
Bond Trading Is Going To The Bots (Bloomberg)
“A record share of U.S. corporate-bond trading has moved to computers as buyers who traditionally transacted over the phone seek faster ways to buy and sell in a market where Wall Street’s human traders are retreating” as their firms reduce holdings, Bloomberg’s Lisa Abromowicz reports. The largest electronic bond-trading platform in the industry saw a YOY surge of 45% to $US44 billion in September, and will end the year having processed $US400 billion-worth of volume. McKinsey estimates that by 2015, 30% of corporate bond trades will be made electronically.
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