Planet Yelnick

Best Times …. Just Ahead ? Call Yves Opportunistic!

Another post from Yves Lamoureux, Investment strategist, Blackmont Capital as guestblogger. 
His core point: for now  negative pressure has the upper hand on the market. He thinks the drop will end sooner than later.  It is at that time that he recommends putting his 40% of cash to work. Of course, determining that point is the trick, isn't it?  On his show today he is making a comparison to 1987 - see the attached chart.  Those who were there then remember the market beginning dropping - 500 points over several weeks, then 500 points in a day.  A couple of slop days after, and the worst was over.  Similar to the wash out in Oct02.  And then the bounce was furious and we never looked back.  Will history repeat?  Maybe one of you can do a "1984" ad spoof about how 2007 will not be like 1987?  In the meantime, read on.   

Tech IPOs keep coming

Mobile games provider Glu Mobile (GLUU) went out today at $11.50, near the top of the range, and closed up 7% after trading higher.  Open source security software firm Sourcefire (FIRE) went out yesterday above the filing range and is up about 20%.  Cable system provider BigBand (BBND) is up 35% after going out last week, and has crested a $1B market cap.  Clearwire looks like the anomaly.  Riverbed, which started the recent tech IPO trend, is still at a $2B market cap and only 20% off its post-IPO high.  Acme Packet, Omniture and most other recnet offerings are above their IPO price and within 33% of the post-IPO high.  The recent spike down in the markets have not spooked investors (yet) from speculative offerings.

Free Week!

You love him.  You hate him.  You've made money off him.  You've lost boatloads following his advice. You want to join the bashing on this site in the comments. Well, go to the source - this is a good time to check out Prechter's reports during Free Week.  Click here for Free Week.  And not just Bob's EWT, you also see Hochberg's STU and Hochberg/Kendall's EWFF.  After Friday when options expire, downside should recommence with a vengeance into wave 3 or C down.  Or not.  Read what Prechter and crew say.  THEN come back and add comments. 

Or, start your own site, join the EWI Affiliate Program, and let me know so I can link over to your site.  Either way, join the conversation.  Some of the commentators to this site are really astute and insightful.  Some are funny.  Some are ... , well, you know who you are ... 

There is Life in Tech IPOs Yet

Despite the Clearwire thud, BigBand went out today at $13 and closed above $16 for a 28% gain.  This is a real company - $177M revenues and $9M profit, growing fairly well.  More like it to come to market over the next few weeks.  Tech often is a better investment in poor markets. The first really good tech bubble was 1978-1983, the PC Bubble, and in it many stocks got out in the face of the severe recession of the early '80s. A large market correction makes 'normal' investments less attractive, and in the search for a place to make above market yields, better returns can be found with speculative high-flying tech stocks, especially when they have been beaten down in valuation.  Tech bubbles tend to come on a different timetable than the cycles that affect overall market conditions.   Regardless of overhang from  2000, Moore's Law has marched on and there is a new discontinuity brewing in technology. 

Why Financial Air Raids are about to start …

Guestblog from Yves Lamoureux, Investment Strategist, Blackmont Capital, and TV personality from the show Les Affaires.com.  In a recent show he sounded the air raid siren, and has backed out of the market, currently 40% cash.  HE submitted an article to Barron's on February 8, calling the top as in.  This was posted on his site on February 19 - at the top.  So give him credit.  Here is his most recent view on the market.

Clearwire Lands With A Thud

This bodes poorly for a return of the IPO market for tech stocks.  Clearwire is a high profile company sponsored by Craig McCaw, a cellular pioneer who sold McCaw Cellular to AT&T for $12B, and later grew and sold Nextel to Sprint.  Clearwire is his third wireless venture, the first that will provide wireless broadband via WiMAX at large scale.  I listened to the roadshow - they have a good story marred by a high cost of customer acquisition, the same flaw which made the $2B Vonage offering a bust.  Clearwire raised $600M at a $4B market cap, and the offering has fizzled.  Maybe the bankers were too enthused - they increased the number of shares offered and put the price at the high end of the range.  The deal first traded a 10% higher than closed slightly off yesterday, before falling 10% today.  Like Vonage, as the banker support is removed it may fall quite a bit, then sit among the living dead with thin trading. 

Blue Sky Wave Speculation

Adding to the Out of the Blue post - how might the next few years break?  Prechter hasn't opined yet, but most likely he sees a C wave down at least the length of A, hence to Dow8000 range; and if it extends by 1.618x wave A, a typical relationship, down to below Dow6000.  In timing, into the 2010 four year low; or it extends into 2014.  (Expect him to develop this view in the EWT over the next 90 days.)  Neely has opined, and sees a 2.5 year continuation of the wave Prechter calls a B wave.  Specifically, maybe 30 or so days of this current downtick, followed by a continued upside into 2009 - but this is fluid and subject to fine-tuning over the next 30 days.  (For those who follow Neely, now would be a good time to follow his service closely.)  For the Yelnick view that there will be a runup through the 2008 Olympics and the 2008 election, this correction is no surprise, and may last into late 2007 before turning;  then the runup into 2008-2009.  MIght count as a double zigzag in Prechter's B wave (which is part of 50W4), or as a 82W5, where we are now in subwave 4 and the final wave 5 drives the runup.  One can count the current wave that ended as subwave 3, beginning in Sep04 as the Bush Re-Election Rally; Prechter counts it as subwave 5 from July06.   

Out of the Blue

In 1987 I was in London, heads down in intense business discussions, when a Brit walked into our conference room with a face as white as a ghost and announced, 'the American market is down 161.'  We were a bit shocked, and some of us frantically phoned home to talk to brokers, but later we got back to work.  That evening at dinner we heard that the market had fallen '5 point 27' or whatever the fraction was, and we figured it had almost come back to even. The next morning we learned that it was down 500.27.  (This was before email, Internet, cellphones or CNBC.)   Now, the market had been sliding for several weeks, and dropped 100 odd points on the prior Friday, and yet the crash seemed to come out of the blue.  Even in retrospect there was no clear precipitating event.  What does this mean for today?