Inside Day (Technical Term) Leaves Little To Be Discussed; M&A’s And Buyouts Continue At Incredible Pace

July 23, 2007

Basically there is not much you can say at all today if you are a serious market speculator. The indexes all put in an inside day which pretty much makes today’s action meaningless. If you do not know what an inside day is, it is when the price action of today, for instance, is all done within the daily highs and lows of Friday’s action. The only thing that was obvious about the market today is that the appetite for M&A’s and buyouts continue.

Oil driller Transocean and GlobalSantaFe joined forces. The combined company will have an enterprise value of $53 billion, and shareholders will receive cash totaling $15 billion. Another deal had Cerberus, a private-equity firm, setting plans to acquire United Rentals for $2.83 billion, and Barclays has raised its bid for ABN Amro to more than $93 billion. Arrow International agreed to be bought by Teleflex for $2 billion, and ev3 and FoxHollow will merge in a $780 million transaction.

TASR beat but was sent back after the opening bell as the stock has obviously been pricing in the good news for quite a while now. I heard traders all day ask why TASR went down after the good numbers. LOL. There is only one way to be that ignorant-and that is if you have never bothered to even try to learn a little bit about TA. The fact that the stock has been rallying into this earnings date for months and sold off today should be obvious that the smart money bought the stock into the numbers and someone sold a lot of their long on top of the dumb money retail crowd.

Besides that I really can not find much new to talk about with this market. It feels that we are tired and we are kind of just meandering near the highs with not much going on. However, being in the middle of the earnings battle ground it wouldn’t surprise me if more volatility sneaks into this market. But the most confounding thing would be for the market to just flat line here during earnings season. That would be pretty cool and for sure would set up some nice charts for some solid breakouts.

I want to urge everyone to be careful about getting too bearish here, with the NYSE short interest ratio at 8%. The crowd is way too bearish right now and I am starting to see signs of some people that have been following the trend higher now try to start calling a short-term top. Try your best to not get into that game. To me, it still looks like we are moving higher.

Don’t forget I am leaving on my vacation on Thursday night. But I will be able to get online and update all longs, shorts, and sells (gold members only) while I am on vacation. During the nights, I will probably even be able to log on and update this. But don’t count on it. I do not like doing commentary and seven days away from this will probably do me a lot of good. However, if something major happens, trust me, I will alert you to it.

Aloha and I will see you in the chat room!!!!

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