The Chart du Jour

Ambivalent Birthday

December 19, 2000

By, Barclay T. Leib

For those who may not be so aware, Sandspring.com has been around exactly one-year today. It was borne from a short stint as a technical analysis columnist for Bloomberg at the end of which I had four articles in hand and a slightly bruised ego. You see, the news editor at Bloomberg may have heard of R.N. Elliott and Leonardo Fibonacci, but at the end of the day, he lacked the nerve to actually post articles based around analysis derived from such "mumbo jumbo." "Can't ruin the old Bloomberg financial news image and all that," was the effective attitude.

And so I left that editor who I remember specifically espoused "never selling Red Hat - NEVER" while I pointed to a likely DJIA top toward 11,541 based off the work of a certain 13th century mathematician. As it turned out in the end, I missed the absolute spike high by a bit, but I've certainly done better than following Red Hat all the way down to its current lows.


Chart courtesy of BigCharts.com

On the subject of Bloomberg, note that besides a few reporters such as Mark Pittman writing on commodities, or Caroline Baum writing on Bonds, or Michael Lewis writing on the silliness of Silicon Valley and the world, the average age of a reporter there is approximately 24! These people have so little clue what they are reporting on, it is pathetic. All they know is that they are in a news room with television and radio broadcasts buzzing about them, and they feel like an important cog to the financial markets. In actuality, the best parts of the Bloomberg newsroom are the large relaxful fish tanks in the reception area and the free carrot and celery sticks available for a lunchtime snack.

And yet we place a headline above of "Ambivalent Birthday" not because Sand Spring Advisors has not been a success (it has been, particularly with regard to the fund of funds we help manage) but because of late, with regard to the equity market, this is exactly what we have been -- quiet and ambivalent. We have been watching the recent market noise with interest and a bit of angst, but without a tremendous amount of conviction. We previously called for the Nasdaq to reach 2450 the week of December 4th., and once it fulfilled that prophecy, we basically lost short term interest in the market. There is still lots of noise and volatility of course, but where's the next easy trade? To be honest, we're still looking.

One chart comparison we came across today that is of potential interest revolves around the current look and feel of the Citigroup chart compared to the prior look and feel of Applied Materials. Even though it took an exceedingly long time for AMAT to leave its ratchet-like high, AMAT did of course eventually collapse. If Citigroup follows a similar path, the collapse part is still in our future. This is just a "pattern match" to ponder over.

I wonder if the news editor at Bloomberg has now rotated his portfolio to be long the financials? It certainly wouldn't surprise.


Chart constructed using Advanced GET End-of-Day

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