Nice Legs…

The stock market seems to have delivered on our hoped for strong confirmation day. Readers will recall that the market needed to put in an impressive up-day within ten days that surpasses the NASDAQ 2121 level in order to demonstrate that the recent rally has legs. Although the NASDAQ closed one point below the important level it surpassed its target intraday. The breadth was very solid and volume decent on both the NYSE and NASDAQ. Furthermore, the NASDAQ managed to close above its 50day MA.

Traders seemed surprised that the Volatility Index (VIX) which measures fear was actually up today despite the rally. Your friendly neighborhood Kcap Team takes great comfort in knowing that the skeptics are still looming. In all likelihood they will find Bullish religion at much higher prices.

After the bell, DELL preannounced disappointing earnings and guidance. Active traders should not be too surprised that DELL has been having issues. The stock is down approximately 25% over the last couple of months. Our Bullish thesis rests more with the infrastructure build out, Semiconductors and Wireless sector as opposed to the box makers. Therefore we are not deterred from DELL's preannouncement.

The Bears will likely attempt to take the market lower on this DELL news. They're getting all lathered up hoping that the combination of DELL and an aggressive Fed might present a nice shorting opportunity midweek. While we do not deny that they may experience momentary success we strongly believe that the larger opportunity will be placed squarely in the laps of the Bulls. Any sell-off from these levels will take the market down into a coiled spring position setting up for a powerful up move. In other words, the Bears no longer have the ammunition to send the market spiraling into the abyss. Large institutional players are lurking under the surface like Jaws. Therefore we would not recommend any shorting into weakness at this point in time.

If You Held A Taser To Our Head:
Only the most nimble traders can lighten up some exposure today and tomorrow. However, we still consider that approach to be penny wise and dollar foolish.

Hope you did well today.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Ghouls May Celebrate Halloween Mid-Week 10-31-05

Good Afternoon.

The stock market is showing nice follow through from Friday's Bullish turnaround. Even the overseas markets got into the action racking up some nice gains with the French CAC +2.3%, German DAX +2.1%, and the Japanese Nikkei +1.8%...NICE RACK!!

Today is the end of the month which is most likely providing a little "window dressing type" upside pressure. Mix in a little performance anxiety from the underinvested Bulls who were shaken out last week and voila NASDAQ +1.3% as we write. The key question is whether or not the negative news flow and overall gloom is thick enough to sustain this move. Certainly, investor intelligence sentiment polls are showing a large increase in Bears as well as a decent drop in Bulls. Despite our intermediate and long-term Bullish outlook we are a little skeptical that it is clear sailing for the very short-term. Mind you, we are not recommending putting on Bearish trades or decreasing exposure, rather simply calling to your attention some short-term fireworks to the downside are still very possible.

The window of opportunities for the Bulls is enormous, especially if we can raise the level of despair one more notch. What would really be ghoulish would be for this particular rally to peak shortly after tomorrow's Fed meeting announcement. Having this market labeled as another failed attempt by the Bulls would push the gloom to extreme levels that historically have always led to sustainable rallies. Combining this with bubbling end of year performance anxiety would simply set up an explosive rally opportunity for the Bulls.

Regular readers already know our fundamental view that is underlying for our Bullish case. This particular post is only discussing the effects when extreme sentiment is overlaid on those fundamentals. When everybody is finally convinced that there is not enough time left in the year for the market to turn in positive performance that is when it will take off like a Maserati.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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We Are Still Bullish 10-28-05

Good Afternoon.

The stock market is trying to shake-off yesterday's drubbing. The CSFB upgrade of Microsoft (MSFT) certainly helped the cause. In fact many stocks including the Semiconductors are looking washed out especially after this morning's weakness. The GDP report was solid as was Microsoft's report under the surface.

Longtime Mister Softee watchers will know that the company is notoriously conservative and rather slick. The fact that a $19billion stock buyback has been announced to be completed by December 2006 is of significant importance. If you had publicly committed to buying back $19billion of stock and you had the power to keep the price temporarily low…wouldn't you do so? Then again, if you had the ability to buy $19billion in stock you would be doing other things besides reading this trading blog. We love MSFT for their products and such but we are forever mindful that they are business people first. Therefore, the lackluster December '05 guidance should not be too surprising to anyone who can read between the lines, especially considering the fundamental news flow we have seen from other companies.

The Semiconductors are showing some hope with the leadership of Intel (INTC) and Analog Devices (ADI). All it will take is a bottom in this important sector for the Bull Market to spring to life. Perhaps the Fed meeting next week will provide the final catalyst. We are maintaining our very Bullish posture despite the fact that we are slightly licking wounds from yesterday. The small sales that we made after-hours will probably be repurchased over the next week. Money management discipline required us to take some action after yesterday's pounding. However, we are not wavering on our intermediate and long-term view.

This will be our one and only post for today due to meetings with new clients.

Have a good weekend.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Shaken Not Stirred

Maybe it was the weak home sales with the larger supply of inventory. Maybe it was the weak durable goods report despite the strike from Boeing (BA)? Could it have been the SEC investigation of General Motors (GM)? Come to think of it…the problems with the Bush Administration could be the culprit. Whatever the reason, the market looks like CRAPOLA!!

Although the volume was lighter than yesterday, the breadth was terrible. When the market hit the 50-day MA yesterday morning traders wasted no time locking in profits. Clearly we were VERY WRONG on our contrarian intraday call thinking the market would close positive today. However, we have been expecting a retest between NASDAQ 2060 - 2070. It never ceases to amaze us the pain that one experiences even when the expected happens.

After the bell MSFT, CPWR, ELX, IM, TKLC, VSEA, WEBX, and KLAC all reported. With the exception of TKLC and IM, these reports were not what the Bulls would want to see. Does this deter us from our fundamentally Bullish view? Perhaps a little, just enough to have us slightly lighten up after the close. However, fundamentally we have never expected the technology blastoff to emanate from the likes of MSFT. The Networking and Semiconductor sectors which for the most part provided strong reports are the important catalysts'. Therefore, despite our rattled nerves, we are maintaining an overall Bullish posture in the portfolio. The Technology sector is undergoing an October shakeout which is customary before it decides to party!

If You Held a Taser to Our Head:
We will be monitoring tomorrow's action for a sense of whether or not the market is washed out and is ready to conclude the retest. So far no technical damage has occurred to deter the Bull, despite what it feels like. However, a slow drift down from these levels might lead to accelerated selling which would clearly making us rethink our bias.

What a day! Trying to hang tough!

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Market Setting up for a Strong Upside Spike 10-27-05

Good Morning

Traders are throwing out the baby with the bath water into this panicky sell off. The selling seems indiscriminate especially so in any stock with controversial news.

When the market sells off like this after bouncing off of the 50-day MA the likelihood is that a sharp move to the upside is imminent. We would not be at all surprised to see the NASDAQ (currently 2083) actually CLOSE POSITIVE TODAY. In light of this we are using this severe volatility to add more long exposure; specifically we started a position in TheStreet.com (TSCM).


Don't panic.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Not All Pullbacks Should be Viewed the Same

The stock market sold off in its continuation of the consolidation phase. No technical damage has been done as of yet. However, we expect some true fear to possibly emerge before this phase is complete. In previous posts we have said that the NASDAQ would still be healthy for a pullback no lower than 2050-ish. After further analysis we have decided that the pullback needs to hold between 2060 - 2070. This would bring the NASDAQ just below its 200-day MA offering a final rinse. We are not predicting this will happen however traders need to be aware of the possibility.

It is important that such a move down is not accompanied by large volume and very negative breadth. Should that materialize the market would indeed be in danger of more drastic selling. So far there are no indications that this is likely to occur.

The stock market is starting to fixate on the rising yields of the long end of the curve. While we recognize this short-term negative implication for stocks we are actually pleased to see long rates finally breaking to the upside. Regular readers know that Your Friendly Neighborhood Kcap Team has been predicting a steeper yield curve over the next couple of years. This event fits in perfectly into our thesis for rotation into high growth stocks.

If You Held a Taser To Our Head:
All-in-all the market seems to be providing us with a normal consolidation. The volatility has increased which is moving stocks from weak hands into stronger hands. Admittedly we would prefer to be seeing better performance from the Semiconductors, especially since their fundamentals seem to be perfectly fine. We are not making any adjustments in our Bullish posture at this juncture but we always reserve the right to slightly trade around our core positions to further lower our cost basis as the volatility presents opportunities.

See You Tomorrow

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Volatile Action is a Bullish Sign 10-26-05

The stock market had a pop and drop so far today. The upside move was most likely fueled by a short squeeze as a follow-up to yesterday afternoon's strong close. The breadth is slightly negative on both the NASDAQ and NYSE after the short squeeze ran its course. Traders are going to have to get used to volatility, not only intraday but intermediate term as well.

Stocks that had good earnings such as F5 Networks (FFIV) and Adobe (ADBE) are holding up rather well, this bodes well for the market once some of the jitters are shaken out a little further. However, stocks that disappoint such as Amazon.com (AMZN) are shown no mercy. Ultimately when the Bull kicks into overdrive disappointing earnings reports will be met with buyers faster than they are today. The fact that disappointments can take a stock down the proverbial 12% shows that skepticism still abounds. For this reason, do not expect the market to move up in a straight line until more things fall into place specifically, improvement in the Semiconductor Index (SOX).

We are using this dip to slightly add to speculative positions such as PRST, HELX, TMTA, ARBA, ISSX, and WEBX.

Hope you're doing well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Question: What do Rita and Tech have in Common?

The Bulls showed some oomph near the end of the day and managed to keep the pullback form getting out of hand. As we mentioned in our prior post, some healthy consolidation is in order. The more the market can shake out the non-believers the better the tech rally will be. Certainly the Semiconductors are doing a great job in offering tremendous discouragement and an overall dose of nausea to market Bulls. The fact that the fundamental news flow in that group is solid yet the stocks continue to languish is causing tremendous frustration for many Bovines.

In classic form we expect the Semiconductor Index (SOX) to catch some type of catalyst (i.e. analyst sector upgrade) that will throw everybody off guard. This event is usually followed by a fundamental data point, such as a strong mid-quarter update, which confirms the analyst upgrade. From that point on the SOX should resume leadership into year-end. That is our prediction and we are sticking to it!

After-hours F5 Networks (FFIV) beat, InfoSpace (INSP) had a huge guide up, and Adobe (ADBE) reaffirmed guidance at the high end of expectations. However, Flextronics (FLEX) had poor results and guidance as well as did Amazon.com (AMZN) on the guidance. All-in-all the fundamental news flow from tonight's earnings as well as the slew of companies that have reported thus far seem to be pointing to ALL SYSTEMS GO for the much anticipated Tech rally. Perhaps a little more shakeout in the traditional Semiconductor leadership group needs to occur before more stock appreciation can take place.

If You Held a Taser to Our Head:
Answer:
Many market participants were positioned Bullish for a "post Rita rally". The market did an excellent job in shaking out those traders before finally delivering the rally that was fundamentally deserved. We believe the same scenario is setting up in Technology land.

See You Tomorrow.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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A Little Song, A Little Dance, A Little Seltzer Down Your Pants! 10-25-05

Good Afternoon.

The market could use a little "spritz" to the downside before we can break out some more good cheer. Just like Mary Tyler Moore at Chuckles the Clown's funeral traders are very confused with how to perceive the market action in its schizophrenic emotional state.

We believe the stock market needs to consolidate for a few days. Yesterday's action was statistically very attractive. However there were still cracks that appeared such as low volume and underperforming semiconductors that demonstrates the market is not yet out of the woods. A pullback in here that does not go too far would be very healthy, especially if a little fear is introduced. Ideally we would like to see a large up day after a consolidation period that takes the market above yesterday's highs. The key thing will be that this hypothetical up day would contain significant volume and materializes within the next ten trading days.

Texas Instruments (TXN) reported a strong fundamental quarter despite the shellacking the stock is taking today. The largest complaint from the company was their inability to keep up with demand…a happy problem…no? Clearly the Semiconductor stocks keep tripping over themselves despite the companies showing improving fundamentals. The market skepticism is still at large, mainly due to the relatively weak performance in these Semiconductor stocks.

We continue to believe that the Semiconductor stocks will slowly gain respect between now and year-end. They will likely surprise traders by suddenly grabbing market leadership and not letting go. For now traders need to contemplate whether or not near-term gyrations are worthwhile trading or should be used for dip buying. Remember trading involves buying and selling full positions whereas dip buying involves simply adding exposure into weakness. Regular readers know that we will refrain from trading unless the decline looks like it is getting out of hand. We are comfortable with the NASDAQ as long as it holds above 2050-ish.

Consumer Confidence came in a tad weak but Home Sales were inline. Oil is bouncing which we consider a temporary positive for the S&P 500 (that will likely spill over into the NASDAQ). Stocks making new highs continue to increase over the past few days which further emboldens our Bullish view. In light of the fact that the market is not yet short-term overbought, the probability of this near-term consolidation period leading to another explosive up day is very high.

We continue to stay the course.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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The Market Will Like Bernanke 10-24-05

Good Afternoon.

So it seems as if "W" has selected Ben Bernanke to be the new Federal Reserve Chairman. The issues concerning Bush on this appointment were not to be taken lightly. The economy is at an important juncture continually threatening to slip into a stagflation mode. As is often the case, the stock market tail wags the economic dog. Specifically having the confidence of the financial markets is imperative in order to have the real economy perform well. Ben Bernanke will provide that confidence.

The markets will be pleased with his qualifications and credentials. In addition the delicate transition from Greenspan to Bernanke should go well, further eliminating uncertainty. As we all have learned numerous times uncertainty is the enemy of the stock market. Mr. Bernanke has been a strong advocate of Fed transparency which will bode well for the stock market. Furthermore he has also been considered somewhat dovish in his approach to monetary policy over recent years. He believes there are inherent deflation tendencies. Therefore, he is likely to have a lighter foot on the interest rate gas peddle. Mr. Bernanke also believes in targeted rates of inflation as opposed to Mr. Greenspan who is more open ended.

The implications of this are quite large. Having a Fed policy of defined neutrality for levels of interest rates will provide more certainty to the global economic system. The tendency of Mr. Greenspan to overshoot perceived neutrality has been a chronic complaint from the financial markets during his tenure. The likelihood is that a Fed under the helm of Mr. Ben Bernanke would suffer less criticism of this kind.

Of course, a change in style of this nature is not without risks. Remember the central job of the Federal Reserve is to control inflation. Long-term economic viability would be severely threatened by a Fed Chairman that allowed systemic inflation to creep back into the system. Mr. Bernanke who is considered by some to be a "deficit hawk" would likely advocate reducing spending as a means to further fight inflation tendencies. His embracing of the Bush tax cuts along with his dovish tendency's regarding interest rate policy will likely lead to the administration gaining support for further cuts in overall spending.

Clearly this appointment of Mr. Bernanke will satisfy the fraction of the conservatives that have been severely critical of the overspending tendencies of the Bush administration. In hindsight no one should be surprised that Mr. Bush has selected a well qualified, dovish and conservative individual at this point in his presidency. The recent pressure the Bush administration has been experiencing regarding Harriet Miers, Iraq, Katrina, and Republican scandals has lead the president to make the safest and quietest choice possible.

Our next post will be tomorrow morning due to various business meetings with new clients.

We're still Bullish.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Wanted: One More Up Day!

The Bears tried and tried but just couldn't do it. They wanted so badly to slap the Bulls around a little bit more but didn't seem to have enough gusto. Although they stopped the Bulls from running away into the close; the fact that the market breadth was so positive and technology held its bid is a feather in the hat for the Bulls. Note: Traders should not focus on the 65 or so point decline in the Dow Jones due to the fact that Caterpillar (CAT) and Pfizer (PFE) disproportionately skewed that average. All-in-all we slightly tip our hat to the Bulls for today's action, and are happy with slightly. Remember we outlined in our prior posts that the Bulls need to merely show sequential up days before the true fireworks ignite.

Today's options expiration made it difficult to tell the true intentions of the market for Monday. However, after the close the NASDAQ futures Spiked up on volume indicating that buyers are around. Those crafty Bulls were waiting for the options expiration to be completed before revealing some of their true intentions.

Next week we expect to see broad participation to the upside including the energy complex. The energy sector is so badly beaten down that at least a relief rally is likely. This will help the S&P 500 which in turn will instill confidence in the Bulls. Ultimately we expect the energy sector to meet resistance while the technology sector continues on its merry way.

If You Held a Taser to Our Head:
Your Friendly Neighborhood Kcap Team is continuing to bask in our slightly over 100% net long exposure. No one can say that Kcap is afraid to put their money where their mouth is. This exposure has served us very well recently as we are far outperforming the major averages. We even intend on adding positions in the Financial sector on dips next week. We strongly believe that next to the technology group Brokerages will be a wonderful upside play. These two groups feed off of each other during times of giddiness.

We have written many posts in this blog describing the power of rotation into technology. The cooling housing sector, backup in yields, and energy deterioration will all provide enormous liquidity searching for a place to reside. We strongly believe that the names we selected for our technology oriented portfolio have that "good 'ol feel" of home.

Next week should prove to be interesting.

Have a good weekend.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Patience is a Virtue 10-21-05

Good Afternoon.

The Bulls need to gain some respect today near the close. However, their job is not an easy one at this moment in time. Yesterday's sell off created short-term technical damage that cannot be ignored. Should the Bears exert their strength into the close, we would not be surprised to see the selling pickup, likely continuing into early next week. As long as the NASDAQ can hold the 2035ish support levels the makings of our expected intermediate and long-term rally are still valid.

Many readers have inquired as to why we would not attempt to trade that type of potential short-term decline to NASDAQ 2035. After all, isn't a 2% move significant enough to play? Our answer is simply this: We are not too proud to admit that we may be wrong with our trading efforts. In our view the risk/reward for being wrong at this juncture in order to try and capture a measly 2% is simply not logical in light of our extremely Bullish view.

Obviously we will not be wearing smiles into such a decline. Furthermore, our resolve may even get a little shaken near the retest of the bottom (we are only human). However our approach to the market has clearly morphed into a "buy the dip" strategy from an aggressive trading strategy. We intend on staying at least 60% net long for the foreseeable future. Our opportunities to lighten our exposure down to 60% will likely come from much higher levels if we are patient. Only when the markets start pushing to the upside capturing the general headlines on your local news will we consider bringing our exposure down to the 60% level or below. Notice that even under those circumstances we are reluctant to be mostly out of the market. We expect this Bull to run for a couple of years.

Readers should not feel discouraged that we have abandoned trading; rather we are encouraging all of you to throw horns onto your trading style. It has been so long since traders have seen a real Bull market like we are expecting that it's probable most traders are rusty. The big money was made in 1999 by the "dip buyers" who stayed mostly invested not the "all in - all out" trader type.

Google (GOOG) is holding up too well to expect a sharp sell off at this point. Although $350 was everyone's favorite sell target, the fact that is still remains in range is an indication that $350 will soon be support. The Bears are strutting their stuff a little early today. That's fine with us, because the earlier they get to work the more opportunity they provide the Bulls to pull the rug out from underneath near the close. This market need only show two back to back positive closes to create the momentum. Traders need to be patient.

Buy the dip!

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Does Anybody Have Peroxide?

Alright…alright…that's the last time we'll call you Bears, Gentle Ben (as we dab the Neosporin against the claw marks across our backs). Clearly the Bears were more serious than we gave them credit for. What started out as purely profit-taking morphed into genuine fear. Despite the fact that we feel the Bearish action can be explained away from sell programs taking place in the Energy sector we are cognizant of the fact that the Bears placed the Bulls in a slightly vulnerable position.

It is now incumbent upon the Bulls to hold key support levels over the next few days. No serious technical damage has been done yet, but the NASDAQ will need to hold 2035ish to keep the timing of our Bullish thesis intact. Granted that would be a large decline for many Bulls to stomach from NASDAQ 2068. However the hallmark of the new Bull market will clearly contain more volatility. Traders will have to learn to adapt to larger swings in the market than we have experienced in recent years. Do not look at volatility as a negative phenomenon. In fact for traders who know how to press their advantage, it can be their best friend.

After the Bell: Google (GOOG) was simply sensational and is looking up 10%. In addition to GOOG, Broadcom (BRCM), Sandisk (SNDK), and Xilinx (XLNX) had good reports with BRCM raising guidance.

The Semiconductor sector performed well today compared to the rest of the market. As long as it can maintain relative strength the Bulls will have strong ammunition on their side. We are however slightly concerned that the Small cap sector was sold off rather harshly. We recognize rotation into Semi's played a part to some degree but we are concerned nonetheless.

If You Held a Taser to Our Head:
This is not a market for the faint of heart. Transitions from a Bear to Bull market are notorious for extreme volatility. Traders would do themselves a favor by trading a little less and investing a little more. Use the volatility to your advantage for small trades but primarily to build core positions.

See You Tomorrow

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Gentle Ben

The Bears may have pulled the market back a little too early today. Although, they have done a good job in reminding the Bulls that the coast is not yet clear. However, we take note of the Bullish action in stocks that have had positive earnings reports, specifically Juniper (JNPR), Analog Devices (ADI), and VeriSign (VRSN). As long as they continue to hold up as well as they are, Bears will be reminded that the Bulls don't scare too easily anymore. The most likely cause for today's broad inaction by the Bulls stems from the energy complex. Oil related stocks continue to be hammered in an unrelenting fashion. Clearly this is providing tremendous drag on the S&P 500.

We expect the Energy related shares to catch some buying interest late today and into tomorrow. The combination of expected strength in Energy Select Spiders (XLE) and continued out-performance of the Semiconductors bodes well for a continuation of the rally. Although it seems counterintuitive that Technology and Oil would rally simultaneously, we would not be at all surprised for it to occur at this juncture.

The Bears will likely suffer more damage on the next rally which will make them resemble Gentle Ben as opposed to a big bad Grizzly. We expect this to occur over the next few days.

Stay the course.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Bulls Don't Even Have to Charge 10-20-05

Good Afternoon.

The stock market has been slipping throughout the day however, not in any dramatic fashion. A pullback here is not only of little concern but actually healthy. The key is that the Bears don't take the market down too ferociously. The Bears are trying their darnedest to make the case that yesterday was a "one hit wonder". If they fail in that attempt, they will start to give up. The Bulls need only to show that they still have buying interest even if the market closes lower. As long as the Bulls can at least put in a respectable showing and scare the Bears a little intraday then the near-term still bodes well.

Semiconductors are strong which is always welcome. Networking stocks are also acting well thanks largely to the stellar report from Juniper Networks (JNPR). We have mentioned numerous times in prior posts that the Semiconductors and Networking stocks will be key leadership groups in the new Bull market. The Small cap sector is lagging but it is most likely being caused from hot money flowing into the Semiconductors.

There are a lot of non-believers in this rally as is evidence by the high put-call ratio. The market has hurt so many Bulls in the last few weeks that it is not unexpected for the disbelief to linger. The Philly Fed survey was released which shows significant growth which bodes well for the economy. New orders were up nicely however the prices paid component was extremely high. Remember, you can't have your cake and eat it too! Bulls that need growth will have to learn to live with a certain amount of inflation. For this reason high growth stocks will become the sector of choice. Only companies that can truly deliver top line results with healthy gross margins will be able to stare down inflation and laugh! Again, another reason for our bias towards the technology group.

Hope your doing well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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This is Not Your Father's '87 Olds

Traders with some years under their belt remember clearly living through the 1987 crash of October 19th. Wall St. is a superstitious bunch. Perhaps this Octobers similarities helped create just enough fear to finally cause this key reversal day.

The stock market came back with trumpets blaring today. In fact, the major averages all closed on their highest tick. Volume was very strong at 1.9b on the NASDAQ and 2b in the NYSE. Breadth also went from 3:1 negative to approximately 2:1 positive. The major averages managed to also surpass the highs of the recent dead-cat bounce which is a supportive of a continuation trend. Importantly, the semiconductors which were down 3% earlier in the day managed to close flat. Regular readers know how important we view the comeback of this sector.

If the Fed continues anymore jaw-boning they will have trouble chewing their dinner. We have mentioned in prior posts our belief that the constant chattering by the fed might be a contrarian indicator as to their real intentions. Perhaps with full knowledge that the end of their rate hiking campaign is in sight they feel compelled to use the only other instrument available to them to scare long-term yields higher. The stock market may finally be recognizing this fact as well.

We mentioned to our readers last night that we believe Intel (INTC) was wrongly perceived as negative fundamental news. In classic form INTC's initial sharp sell off post earnings was quickly reversed, marking the catalyst yet again for a key reversal day. INTC often is credited with sharp reversals in the stock market. Experienced traders also understand that when INTC raises guidance for Gross Margins, it usually bodes well for the stock in the intermediate-term. Indeed, INTC raised Gross Margin assumptions from 61% to 63% ish on their earnings call last night.

After the bell, Juiper (JNPR), VeriSign (VRSN), and Qlogic (QLGC) reported solid results but Ebay (EBAY) was slightly disappointing on their guidance. All in all, the parade of recent technology earnings reports is shaping up to be rather attractive for our Bullish thesis.

If You Held a Taser to Our Head:
Keep in mind that we are not out of the woods by any stretch of the imagination. October is still a volatile month and may have more in store for us. However, Your Friendly Neighborhood Kcap Team sees nothing at this point in time to throw us off of the Bullish posture we've been riding recently. In fact, we are hoping for a little more volatility to actually add more long exposure. Currently 100% net long.

Yesterday we told you to buckle up…today we started peeling rubber!

See You Tomorrow.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Market Retest is What the Dr. Ordered 10-19-05

Good Morning.

The stock market is showing signs of panic, only fitting for the 18th anniversary of the 1987 crash. The news from Intel (INTC) continues to be spun negatively despite the fact that Andy Bryant, the CFO actually repeated the words we wrote in yesterday's closing post. Specifically, he mentioned how the build he is seeing in large customers may actually portend ramping up for strong fourth quarter demand. However, the market is in a pissed off mood and chooses to look at the glass as half empty, starting to think recession. The effects from this are to allow the stock market to further shake out anxious Bulls who attempted to time the bottom (yours truly included). The good news is that the market is now setting the stage to bring in some of the more patient Bulls. No doubt, most of them will buy at much higher prices however, the retest of recent lows should excite Bullish participants to put at least some money to work.

The new lows continue to contract on the NYSE despite the lower moves in the averages. The NASDAQ is also seeing significant contraction of new lows. We cannot overemphasize the importance of positive divergences occurring in an oversold market at the seasonally most volatile time of the year. This is what rallies are born from.

The question traders should ask themselves is to what degree they feel this market can rally. Regular readers know that we believe that the sustainability of the upcoming rally will be far greater than we have seen in many years. Therefore, we have chosen to maintain our very Bullish posture at this time.

Although the Semiconductors are leading to the downside we are still in forgiveness mode due to the fact that a final rinse post INTC was not out of the question. However, we require the Semiconductor Index (SOX) to start catching a bid by the end of this week in order for us to feel comfortable with the timing of our Bullish market call. Watch for improvement in Breadth and INTC's share price over the next couple of days as a key tell.

The Oil inventory numbers were released showing significant drawdown's. This is providing a little fire for the Bulls. Despite this, the afternoon action in technology is more important.

Don't panic.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Traders Spin the Fundamentals

The stock market was all over the map today. The Bulls made a solid attempt in the afternoon but were thwarted and gave up the ghost into the close. Clearly we were disappointed and surprised by the lack of oomph from the Bovines. The afternoon rally that we were expecting, although it got off the ground, was faded fast and furious.

After the bell Intel (INTC), Yahoo (YHOO), and Motorola (MOT) reported. MOT results were strong which is a good indication of end user demand. YHOO seemed good enough as well. INTC reported better than expected revenues and earnings with strength across the board. The stock was up initially after-hours but faded sharply when the company indicated that inventory builds are appearing in their larger clients.

Clearly market players are selling first and asking questions later as INTC is down -2% after-hours. Does the increase in inventories portend softening expectations for end user PC demand? With worldwide PC units shipped (announced on this past Monday) to be up approximately 17%, we doubt the softening spin. Rather, in conjunction with strong end user demand from the likes of MOT; could it be that OEM's (Original equipment Manufacturers) are actually preparing for increased demand? Only after other proxies of end user demand are reported during the next couple of weeks will we have confirmation.

INTC is always wrongly perceived as a good bellwether for consumer demand. They are also notorious for pulling the rug out from under the market as they radically shift their views of the world. Remember, they receive their industry sales forecasting data much later than the likes of Hewlett-Packard (HPQ), MOT, etc. Let's not forget who is on the front line with the consumer.

If You Held a Taser to Our Head:
However, perception is reality. Should traders uniformly interpret the INTC news as technology sales softening then the market will clearly want to retest last weeks lows. We will only know if this will occur by judging any bounce in technology stocks over the next couple of days. Tepid relief rallies will be invitations for the Bears to force the retest. Nimble traders should use any strength of that nature to lighten up some of their exposure. Your Friendly Neighborhood Kcap Team would also use that type of strength to slightly and temporarily decrease our Bullish posture. However, a strong Bullish reversal over the next couple of days would keep us fully invested.

Buckle up your seatbelt, the next couple of days will be very volatile.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Chop and Shop 10-18-05

Good Afternoon.

The PPI came in a little hotter than expected throwing more inflation fear into the mixing bowl. However, traders are more likely focused on earnings. Last night we mentioned that it would be important for Rambus (RMBS) which reported solid earnings to catch momentum. We also said that Novellus' (NVLS) weak report needs to attract some bargain hunters. Today's action indicates that RMBS has stepped up to the plate and the jury is still out on NVLS.

The stock market internals today seem rather poor. If it were not for Intel (INTC) which has caught a bid in anticipation of tonight's report, the selling pressure in the market would likely be much heavier. The breadth is bad on the NASDAQ at 11:16 advancers to decliners and 11:19 on the NYSE. We are not surprised by this action as the choppiness should be expected for at least a few more days. However, should the market show negative reaction to earnings reports combined with continued heaviness in the Semiconductor sector, the near-term balance might indeed tip in the favor of the Bears.

How concerned are we should this materialize? From a traders standpoint we would likely lighten up our exposure to around 60% net long from our current 90%. Our intention would be to buy back the dips due to the fact that our overall Bullish thesis still remains intact. The fact that the market is oversold and clearly positive divergences have emerged, we would expect that the pullbacks would not fall into the abyss. Since we have been wearing an investors hat lately due to our intermediate and longer-term Bullish view we would be reluctant to bring our exposure down below 60% net long.

Our intraday forecast is for late afternoon strength. This mornings little shakeout has further set the stage for the dip buyers.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Traders Need Two Skill Sets

Like a K-9, the stock market shook off after a nice little rinse. The Bulls managed to show a little muscle and turned the Breadth positive on the NYSE and paired on the NASDAQ. The volume was light at 1.3b on the NASDAQ but heavier at 1.5b on the NYSE further demonstrating the high level of skepticism that still exists. Normally, we would consider light volume on an up day to be an indication of limited further upside. However, this is the reason why pure technical analysis does not suffice. A solid understanding of the macro environment as well as company specific fundamentals (especially during times of skepticism) is exactly what the most successful trader's need in their arsenal to outperform their brothers.

We are still not suggesting that the stock market will move up in a straight line. Indeed, the welcomed return of volatility should provide plenty of shakeouts as the market slowly ascends. Ultimately we are expecting volume to noticeably increase at much higher levels in the averages. Pure technical analysis will keep most players on the sidelines until their fancy chart indicators finally get them involved. Please do not assume that we are disparaging technical analysis either. Simply put, portfolio managers need to have solid skills in both schools of discipline. This is especially true during times of a major market transition.

International Business Machines (IBM) (Incredibly Boring Model) posted solid results and seems to be providing comfortable guidance. In addition, Rambus (RMBS) seems to have also impressed after-hours. On the other hand, Novellus (NVLS) is somewhat disappointing. While most traders will be focusing on the IBM relief (phewww), your Friendly Neighborhood Kcap Team will instead monitor the action in NVLS and RMBS. We believe key tells will be whether or not NVLS can capture some bargain hunters throughout tomorrow's trading session. We will also be closely watching RMBS for signs of building momentum. How these two stocks close tomorrow may forecast the reaction that other companies will experience as they deliver their highly anticipated earnings. Keep in mind that it is difficult to forecast market reactions to earnings from such a small sample. However, you gotta start somewhere!

If You Held a Taser to Our Head:
We will stay invested approximately 90% as long as the market continues to slowly regain trust. However, spiky action to the upside is still an invitation to slightly lighten up with the intention of buying back. Sharp pullbacks should be used to add technology exposure in fundamentally solid names. Slow drifting down action with poor Semiconductor performance as well as poor reaction to earnings would likely have us reconsider the timing of our Bullish view.

Hope you made money. See you tomorrow.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Kcap The Investor?

The stock market has provided a nice little rinse. Indeed, the lack of follow through action from Friday has shaken out some of the Mo-Mo Players. From our morning post, readers will know that we are not surprised by this afternoon's weakness. In fact, we have taken this opportunity to add more exposure in the following names to our Portfolio's: Netease.com (NTES), Tellabs (TLAB), iShares Russell 2000 Index (IWM), Motorola (MOT), Emulex (ELX), and General Electric (GE). NASDAQ currently around 2055. The Semiconductors continue to hang tough on a relative basis despite being slightly down. The stock market is oversold and positive divergences are occurring over the last few days such as contracting new lows.

We recognize the fact that we are being highly anticipatory lately. In fact, many readers have pointed out to us that we seem to be straying from our largely reactionary trading style which has served us well over time. While we agree with their observations we also remind them that we have recently explained our inclination to use more of an investing approach as opposed to trading at this juncture. This is not to say that we have morphed into Buy and Hold Portfolio Managers, in fact we intend on trading around our core positions quite frequently. However, due to the extreme level of "Horniness" that we find ourselves in these days, we welcome the investing analogy.

Hope You're Buying Da-Dips!

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Delayed Reaction Expected 10-17-05

Good Morning.

The stock market is essentially flat-lining today. In its usual manner it is providing maximum frustration. Most market participants entered this week expecting that the stock market would mount a rally in anticipation of earnings. Indeed, the fact that the market failed to rally prior to earnings over the past week or so, has given tremendous confidence to the Bulls that a rally will materialize on Monday for sure. Traders are asking themselves, "How could there be absolutely no attempt at a higher move prior to earnings?" We must remember that since so many traders are feeling exactly that way, the market will be sure to disappoint them; hence the flat action.

As the stock market continues to defy the "Bullish logic", frustration and fear will start to build again. The likelihood is for the market to rally this week only after it throws a few people out of the passenger window one more time. Similar to post Hurricane Rita, when the market failed to rally at the immediate start of the week, market participants threw up their hands and then THREW-UP! The puking of positions set the perfect whipsaw opportunity for the market to deliver its usual dose of misery. Only once traders unwound their Bullish positions Tuesday and Wednesday of that week, did Mr. Market decide to turn on its rocket boosters and blow its exhaust in the face of every trader standing on the launch pad. We should expect similar action this week.

Despite the Breadth being slightly negative, Oil and Gold trading higher, and Small Caps lagging, we are not abandoning our Bullish posture. The Semiconductors which are trying to stabilize are a positive indication of what is likely to materialize later this week. Do not let yourself get shaken out of good positions today and tomorrow.

Hope you trade well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Anxious Bulls vs. Patient Bulls

There are numerous signs that demonstrate that we are at the bottom. Almost without fail, a major institution has to go "out". Refco's (RFX) potentially imminent demise provides this ammunition. Furthermore, bottoms are notorious for uncovering bad apples. In addition to RFX we have our buddies at Samsung (SSNLF) and other Semiconductor companies that have agreed to pay the largest fines in history for price collusion. There is also an endless supply of hate mail being shot at anyone who holds themselves out as a stock market professional. The list goes on and on…get the point?

There are two types of Bulls, anxious versus patient. Our largest concern is to which camp we want to place ourselves in. The anxious bull camp is willing to step up now despite the fact that they may endure further pain over the next few weeks. On the other side of the equation are the patient Bulls who are happy to buy late rather than endure any suffering at all. If you are a Bull you are most likely trying to decide which type of bovine you most resemble.

The simple truth is that the choice becomes a zero-sum game. Anxious Bulls who load up the boat now will likely not be able to withstand the "pain" if they were wrong in their timing. The stock market is likely to at least shake out a portion of their holdings inevitably forcing them to buy back at higher prices. Patient Bulls will certainly avoid pain but will be faced with the difficult choice of buying significantly higher than they originally anticipated. The market usually pulls back on them immediately after they buy, thus shaking them out of some of their positions. Only the Bulls who are properly positioned to withstand pain without being rinsed out of the market will truly capture the lowest prices. That is the reason your friendly neighborhood Kcap Team has been positioning for this event during the last several months.

The stock market continues to exhibit the "good stuff" but the Semiconductors are not joining the party. Although this is troubling, we will allow them a one or two day vacation due to their superior performance yesterday. They had better get their act together by mid next week or we may have to reevaluate the timing of our position.

Steady as she goes for now.

We will be kicking off the weekend a little early today. We'll see you on Monday.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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So Far So Good 10-14-05

Good Morning.

The Core Consumer Price Index (CPI) came in less than expected offering much relief to the "Fed"-up market. In addition retail sales ex-auto's came in better than expected at +1.1%; another knife in the back of stagflation (as Martha says, "It's a good thing"). However, business inventories were slightly higher than expected and Consumer Confidence was less than expected. All-in-all the economic news was mixed. In this current environment we'll be happy with mixed.

General Electric (GE) had better than expected earnings and reaffirmed double digit growth into 2006. Texas Instruments (TXN) caught a downgrade, however Verisign (VRSN) caught an upgrade and Morgan Stanley increased earnings estimates for Analog Devices (ADI), as well as Piper raising estimates for Fairchild Semiconductor (FCS). The Semiconductor group showed life and leadership yesterday as we had predicted. We will monitor this group closely for follow through over the coming days. A little pullback from here would be okay.

Have you noticed the response to earnings reports so far? For example GE and Apple Computer (AAPL) have held up well since their reports, so have the few other companies who've reported decent earnings. Expectations are so poor that companies simply need to deliver inline performance in order to provide a little bid under their stock price. Imagine the market's delight when overall earnings and guidance come in much better than expected, as we predict. Importantly, positive momentum created from this event would be coming at exactly the right time.

Although the market still may need to chop around for a little while, the ingredients are still in place for at the very least a powerful year end rally. We are excited and nervous about our Bullish outlook and how we are positioned for it, however we are cognizant of the fact that we may be wrong and are aware of the danger of stubbornness. Therefore, we are forever monitoring the internal health of the market, especially our own positions.

Stay tuned.

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Morning Post 10-13-05

There will not be any posts today due to Yom Kippur. Sorry for the late notice. For our latest views, click here to read yesterday's posts. We still maintain these views.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Trader's Days Are Numbered

The selling is relentless however there are definitely signs of life out there (although some people think we're Space Cadets for feeling this way). Most noteworthy was the refusal for the Semiconductors to fall apart despite the downgrade from Prudential Securities. Analysts are notorious for capitulating at the exact worst moment and this seems to be a classic case. The Semiconductor group has led the market down and will likely lead the market higher. Did you notice the strength in Texas Instruments (TXN) or how about Analog Devices (ADI)? Even Intel (INTC) showed an underlying bid.

Most traders can use their own portfolio as a good indicator as to the overall health of the market. If you are loaded up with speculative names that did better than you thought they would have on a day when the NASDAQ was down this much, this is an early sign of life. Keep in mind that bailing out here is what Mr. Market would like you to do. He may try his best to scare you out, perhaps tomorrow, with a retest of the lows or even a slight breach. However, we strongly believe that it would be a mistake to "pull a Pru (Prudential)" at this point.

Bottoming action is even taking place in Cisco (CSCO) and Dell (DELL). Even Apple (APPL) which everyone believed was due for the ugliest of day's shows that it commands respect. The release of new products today by APPL certainly helped the cause. Steve Jobs should never be taken lightly and seems to be on the verge of something big again. Expect more exciting technology product announcements in the fourth quarter from other bellwether companies.

If You Held a Taser to Our Head:
The stock market has extremely low expectations, earnings season is about to kick off (most likely will come in solid), new product announcements in technology are emerging, and all fund managers are suffering from performance anxiety…hmmm…sounds like its time to take off your trading hat and put on your investing hat.

P.S. We posted yesterday how we feel that the bottom is forming in the major indexes over the next couple of days, most notably the NASDAQ. We feel that the action today does not deter us from those views. A little more capitulatory selling and retests are likely but use it to your advantage. Readers can click here to read yesterday's post.

See You Tomorrow.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Staying the Course 10-12-05

Good Morning.

Readers have asked us if we have changed our view in light of the carnage on the screen. The short answer is, NO. Although we are disappointed that the most recent NASDAQ support has failed, we still believe that this bottoming event is still very close at hand.

The stock market needs to find support from the Semiconductor group as well as a strong close to turn the tide. However, trying to figure out what specific catalyst will come to the rescue is an exercise in futility. These events more often materialize in an unexpected lurch that seems more self-fulfilling than anything else. Naturally, the up move will not be sustainable unless other conditions are ripe. As we have discussed recently, it is our belief that the banana is bright yellow and ready to eat. Therefore, we are maintaining our 75% net long exposure to the stock market in anticipation of a near-term bottom.

Each trader needs to examine the beta of their own portfolio to determine their pain threshold through this decline. Our positions are performing relatively well and along with our still healthy cash hoard of 25% is providing significant cushion compared to the overall declines in the averages. Perhaps this is giving us an added feeling of bravery. We feel fortunate that we are properly positioned to make such a stand at this time.

We hope you are experiencing the same and are able to maintain patience.

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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CHARGE!

How do we know when the stock market will put in a major bottom? This is a combination of science and art. Many forecasters have tried to make the bold call over the last five years only to have egg splattered all over their faces.

Individuals do not have to concern themselves with such forecasts in order to make money. However, columnists are forever tempted to make "THE" call. Regular readers will know that we have been discussing NASDAQ (around these levels) as a potentially tremendous buying opportunity. We have explained in prior posts the reasons for our Bullish outlook. Therefore, we will spare you the details in this particular post.

Suffice it to say, that your friendly neighborhood Kcap Team strongly believes that the possibility for a multi-year bottom in the NASDAQ will be reached in the next couple of days, currently NASDAQ 2063. Our necks are so long on this call that we can pull leaves off of Giant Redwood Trees. Despite this it would be irresponsible for us to not share with our readers what we truly feel.

Understand this, we are not recommending that you back up the truck in case we are wrong. We are simply suggesting that you should be AT LEAST REVVING-UP your equity portfolio for this potential outcome.

Don't Sit There Frozen, Buy Something!

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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NASDAQ Breaches Support

The NASDAQ has breached prior support of 2069 and is starting to freak out a lot of folks. The selling over the last week or so has been relentless. In fact, virtually the entire up move that the market made since the London Terrorist attacks has been wiped out (ethically speaking it seems rather fitting).

When the stock market retests prior support it is allowed to briefly fall below it without destroying the chances of a successful retest. However, if the internals still drag and the breach of support is too significant, then the bottoming process has to start all over again. Currently, the NASDAQ has not done enough damage to ruin the chances of this being a successful retest. As painful as it feels, we are maintaining our positive outlook on the market and are using this weakness to further scale into Semiconductor exposure.

The Fed minutes are coming out at 2pm. We expect any deviation from the hawkish stance to possibly ignite a rally. Maximum uncertainty for the market is between 1 and 2pm and therefore a potential entry point for long-side trades.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Bears Are Too Arrogant 10-11-05

Good Morning.

The stock market showed some good opening strength this morning but was quickly faded by overzealous Bears. Genentech (DNA) and Alcoa (AA) continue to perform well which is evidence that the Bulls are starting to get angry. Oil is up today and is actually helping the S&P 500 in a perverse way.

Overall when the Semiconductors can find a bid, which should be soon, we expect most underinvested Bulls and overzealous Bears to be caught off-guard. Therefore, we are adding a little more long exposure to our Merrill Lynch Semiconductor Holders (SMH) since the NASDAQ has retested last week's lows around the 2069 level. The NASDAQ is currently 2073 at the time of our additional purchases.

When the Bears act as cocky as this, it usually blows up in their face.

Hope You're Trading Well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Position, Position, Position!

The stock market dragged its knuckles on the floor all the way into the close. Semiconductors and Oils weighed heavy and foreshadowed that more selling pressure may still lie ahead in the near-term. On the other hand, breadth was negative at both 2:1 on the NYSE and NASDAQ, although bad not terribly so. Volume was light which is what you would want to see on a down day. The NASDAQ also managed to outperform the S&P 500 which is another positive.

The decline in energy shares continued to pressure the S&P, which is not the worst way for the S&P to fall. In other words, there is under the surface strength in other sectors except for the Semiconductors and Oils that is continuing to provide an underlying bid in the market. Furthermore, both the Semi and Oil sectors are now fairly oversold.

After the bell Alcoa (AA) and Genentech (DNA) had positive news. The Bears (feeling all warm and fuzzy like a big fat teddy) are most likely planning to use strength spawned from these two names to further maul the market. Therefore, the probability of a retest of last week's lows continues to be high.

This is a very important time of the year with only two and a half months left; performance anxiety from fund managers is inevitable. Fund managers who have good relative performance versus the S&P 500 will be well positioned to exploit the not so fortunate managers who are lagging. The stronger managers will start to bid up high beta stocks into the year's end knowing that weaker managers need exposure to those names in order to play catch-up. This cycle is vicious and self fulfilling. Only strong money managers that can afford to give up some relative performance will be willing to commence the high beta games and thereby get the most attractive prices. For this reason it is critical to worry more about good relative performance at this juncture in the year.

The bigger opportunity to make money lies ahead for those who are well positioned. Tactical trading at this point in time is penny wise and dollar foolish for managers who are already beating their benchmark. After analyzing the makeup of our current portfolio we believe we have achieved inline performance when the market declines and superior performance when the market ascends.

The market is a dog-eat-dog world. The strong will always feast on the weak. Your friendly neighborhood Kcap Team is currently in a strong relative position to the market. Our current portfolio design shows us that our relative performance will most likely not slip. Our year to date performance has our accounts near their 52 week highs. Therefore, we intend on obtaining "first mover advantage" on the high beta names when they demonstrate signs of bottoming. In other words, we are taking steps now to increase our bravery for the bigger opportunity later on. Like in the game of chess, it is often wise to sacrifice minor pieces in order to set up the bigger move later. Therefore, we are willing to tolerate a little absolute slippage by staying mostly invested.

If You Held a Taser to Our Head:
We were disappointed with today's action and surprised that the market was not able to get more of an upward spike. However, due to the above mentioned views we will be maintaining our roughly 68% net long position. We currently believe that unless the internals deteriorate further, the NASDAQ has good support between 2060 and 2069. The market is trying to form a bottom and we are giving it a little breathing room.

Check!

See You Tomorrow.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Still Bullish…Get the Point!

We nibbled on Tekelec (TKLC), Qualcomm (QCOM), Cisco (CSCO), Texas Instruments (TXN), Juniper (JNPR), and Encana (ECA) around NASDAQ 2079. The Semiconductors still can't find any respect and subsequently are weighing on the stock market. The breadth is negative but not atrociously so. We are doing some hand wringing but have not found enough deterioration to knock us off the Bull that we are riding. However, the horns are dangerously close to YOU KNOW WHERE and as you can imagine we are a little uneasy. Currently 68% net long.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Sticking Our Necks Out

The stock market seems to want to go higher despite the red on the screens. There is a clear tug of war taking place under the surface between with Semiconductors, Oils on one end of the rope and everyone else on the other. The question is, "Who will prevail?" Will the Semiconductors continue their slide, creating more of a give-up in the names like Dell (DELL) and Yahoo (YHOO) or will a recovery in the Semiconductor Index (SOX) create even broader buying in the market.

We are heartened by the fact that there seems to be rotation from one technology industry into another as opposed to an overall "Tech-wreck". This indicates to us that should the key Semiconductor Group manage even the slightest relief rally, the market would likely lurch forward much more significantly than most traders expect. Should that event take place, the NASDAQ would likely breach our near-term target of 2120 perhaps recapturing 2140. Mind you, this is all in the context of the bottoming formation. Therefore, further retests of last weeks lows would still be likely.

Considering that the Semiconductor stocks have corrected approximately -10% in the past week, it is not out of the question that the above described relief bounce in that group would materialize; therefore, helping our broader short-term market call come to fruition. Traders need to be patient for at least one or two more days in order to determine if this market call has merit. Our stops are loose in anticipation of this projected market action as we are becoming more Bullish for a nice end of the week rally.

Monday weakness may lead to late week sweetness.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Jury Still Out on Market Bottom 10-10-05

Good Morning.

Overseas markets were mostly positive helped by the deal reached in the German Government regarding Angela Merkel. Oil is down however, this is not providing any comfort to the stock market. Xilinx (XLNX) had weak guidance and caught a downgrade which is putting very heavy pressure on the stock. This is spilling over to most of the Semiconductor names which is in turn dragging down the NASDAQ.

The NASDAQ is likely to chop around between 2069 and 2120ish. The sudden downward pressure that the market is experiencing since 8:50am this morning is largely due to the tepid buying interest from the Bulls. They have been so badly beaten last week that they are easily spooked and the XLNX news is as good an excuse as any. Traders looking to sell are forced to dump positions into a vacuum.

Remember, the process of making a bottom is exactly that; a process. Several failed attempts by the Bulls should be followed by more positive divergences on each attempt. Declines such as this morning provide us with an opportunity to analyze whether such divergences are materializing. This decline will be our first indication as to whether or not the stock market is indeed searching for a bottom or simply pausing before a more accelerated decline. Currently, the dearth of buying, although expected, is an indication that too much fear and skepticism still exist. Therefore, it is too early to deploy a significant percentage of our cash into this decline. We will be looking for stronger internals than we are currently experiencing before we get more aggressive. We are however, encouraged to see bottom-fishing interest taking place in recently badly beaten up names such as Dell (DELL) and Yahoo (YHOO).

Overall this decline has afforded us the opportunity to nibble slightly on Merrill Lynch Semiconductor Holders (SMH), but we are keeping the rest of our powder dry.

Still 65% net long.

Hope You Trade Well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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How High Can a "Dead-Cat" Bounce?

The stock market managed to put in a small relief rally. The good news is that most traders believe this is merely a Dead-Cat bounce. Therefore, a contrarian would say it may have a little more room to run. The Volatility Index (VIX), although down did not show its usual sharp decline for an up day. This indicates that fear and skepticism still abounds. The breadth was decent at around 17:12 advancers over decliners on the NASDAQ and 19:12 on the NYSE. The Small Cap sector outperformed all of the major averages up +0.8% and the Semiconductors were up a respectable +0.6%. Unfortunately the volume was very light which further shows lack of convictions.

Despite the fact that this Dead-Cat bounce may go further than traders believe; make no mistake about the fact that more retests of yesterdays lows are likely in the near future. Nimble traders may choose to short into further strength that is likely to surprise traders and materialize on Monday. However, due to the fact that the stock market is in the process of setting up what could be a significant bottom; aggressive short sellers need to take quick profits. Overall, our significant fundamental Bullish views will keep us from being too cute by shorting aggressively around these levels. Should we decide to entertain any short-selling, we will take profits quicker than Paris Hilton can pick up her skirt.

On the other hand the likelihood of a "V" bottom is not very high. Bottoms usually require multiple retests with heightened levels of fear thrown into the mix. Most young Bovines have learned to recognize a classic "W" shaped bottom. Accordingly, those bottoms rarely pan out. Shakeouts and inverted "W's" as well as Triple Bottoms are more likely due to the fact that there are so many recently made "experts" gaming the market nowadays. The old rule book has become as useless as Paris Hilton's chastity belt…(okay, enough picking on "Poor" Paris).

If You Held a Taser to Our Head:
We are maintaining a Bullish net long position of 65%. We intend on using possible "unexpected strength" on Monday to book some recent profits. However, we do not intend on bringing our exposure below 40% net long unless the internals show severe deterioration.

Have a Good Weekend. See You on Monday.

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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"The Age of Aquarius"? 10-7-05

Good Morning.

Overseas stocks were weak largely in sympathy with the U.S. Markets yet again. Non-Farm Payrolls were released this morning, surprisingly stronger than expected. In addition, prior revisions showed further increase in jobs added. Importantly, the prices paid component was less than expected at 0.2 versus 0.3. Despite the fact that the full effects of Katrina have not yet been factored into this report, there is no doubt that the U.S. Economy was showing stronger underlying growth than expected prior to the storm. This certainly provides a stronger safety net for when the final impact of Katrina ripples through the economy.

This is quite important due to the fact that downward momentum in the real economy now has less of a chance to be sparked. Remember, most economic downturns are no different than a stock market decline which feeds on itself with negative momentum that gets out of control. Prohibiting the "ignition" of downward momentum can go a long way for long-term economic stability. Therefore economists will be relieved to see the prior robust nature of the economy before Katrina.

The stock market over the last few months seemed to relish bad news. Perhaps the low volatility in the markets have been so burdensome for traders over the years that any opportunity for short term gyrations was welcomed. Nonetheless, the market finally succumbed to inflation talking Fed Heads. Jaw-boning from the Fed is usually too much for even the most steadfast Bulls.

The stock market needs to stabilize around these levels. If the Bulls can manage to accomplish that over the next two weeks, a tremendous opportunity exists for the badly Beaten Bulls over the last five years. The NASDAQ is likely to chop around the 2069 and 2120 levels. At least a couple of tests of NASDAQ 2169 are in order. Should the market form a base within this range with improving internals, the stage will be set for a major rally.

Corporate fundamentals, combined with an opportunistic macro environment, seasonality, and an extremely attractively setup stock market have allowed the moons to align for such an event. Mind you, the moons have aligned before only to collide. Therefore, we need to check stubbornness at the door and be prepared to bail if our thesis is proving wrong. The difference this time in our trading risk management versus the past few months is that we will allow slightly looser stops.

Stay alert.

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Home Sweet Home…We Think

The stock market acted like Vincent Price and gave us a little bit of "Fright Night". The volume was heavy at over 2billion shares on both the NYSE and the NASDAQ. However, the breadth was only around 2:1 negative; lighter than you would imagine on a capitulation day. Furthermore, the Small Cap Sector outperformed the Semi's which indicates some speculative buying under the surface. The Semiconductors retraced most of their recent gains. The Volatility Index (VIX) got a little bit jumpy but resembled more of a Mexican jumping bean than a Kangaroo. Oil declined and closed under $62/barrel yet that did not even help the stock market.

There is no more powerful force in the market than that of the Federal Reserve. Even minor players such as Richard Fisher (Dallas Fed President) have the ability to cause severe market reactions. The stock market was already in a downtrend and Mr. Fisher's comments accelerated the selling. The Fed seems to be going out of their way to remind the market that their job is not done. A true contrarian should welcome this news and start to believe that as the jaw-boning of the fed increases the resolve of the fed to actually raise rates may decrease. However, this is not enough of a reason to make a substantial contrarian bet.

Regular readers will know that your Friendly Neighborhood Kcap Team has been eyeballing NASDAQ 2077 as our target for the capitulatory rinse. Many of you have been reminding us to be careful of what we wish for. Indeed our adrenaline has been pumping as we have added significant exposure into this panic sell off. We scaled into numerous positions with the NASDAQ averaging 2077. Our new net long exposure is 60%.

If You Held a Taser to Our Head:
We are not declaring that the market has reached the ultimate bottom at this point in time. We are simply suggesting that a window of opportunity now exists that we MAY have reached the ultimate bottom. Over the next few days we will observe the stock market's reaction around these levels and whether or not more significant selling pressure is ahead. We will be analyzing the internal health of the stock market i.e. the makeup of bounces, leadership, breadth, fundamental news flow, etc. in order to get a full determination. This is the markets first trip down to these levels since the London Bombings in early July. A bounce and at least one retest are likely before the market blasts off. For this reason our 40% cash hoard will remain safely tucked into the money market until we have the proper evidence. We will not hesitate to hedge our positions if we feel uncomfortable with the action in the market over the next couple of days.

See You Tomorrow…We're getting horny!

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Are We There Yet?

Panic selling is definitely happening. The rinse we've been waiting for is likely upon us. Start your buys, move slowly, don't buy all at one level, but definitely start to buy. The NASDAQ may do its final rinse down to 2070ish. As long as you maintain at least 50% cash, scaling your buys into this decline between 2085 - 2070 is prudent. However, the 50% cash that remains should be used to buy as the market is going up. Keep in mind, when the market finally goes back up, the internals have to look relatively healthy as well.

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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Starting to Piece In

We are starting to buy in small pieces the following names BRCM, DELL, ECA, HAL, INTC, MOT, WFMI, XLE, CHK, IM, HAL, QCOM, and CHK. The NASDAQ is currently around the 2085 level. It's time to start buying but don't shoot your load all at once.

We've moved our exposure from 18% to 30% net long.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Danger, Will Robinson! 10-6-05

Good Morning.

All overseas markets were down big, especially the Nikkei which was down around -2.5%. This was on the back of the large negative continuation of the down move in U.S. Markets yesterday. Oil has been trading lower and has breached key support level of $62/barrel. Breadth was awful yesterday and volume was very heavy.

Jobless Claims came in higher than expected this morning at 390k versus the 350k expectations which is keeping the fear of stagflation alive. Of course all the jaw-boning that the Federal Reserve Governors have been doing about inflation being at the high end of the range is not helping matters. No doubt about it, some real selling action is taking place in the stock market.

The Volatility Index (VIX) has been pushing higher indicating complacency is fading. When it starts to get more jumpy, perhaps near the 15 range we would be able to declare that fear is ruling the roost. We're just not there yet. Furthermore, although the investor intelligence polls are showing a decline in Bullishness we have more room to fall before we can exclaim that sentiment is too Bearish.

The S&P 500 has breached its 1200 (the simple MA) thanks largely to the significant weakness in energy related shares. Technicians will be watching for another close below 1200 before they start chatting about further downside in the S&P. In Tech Land the Semiconductors are finally starting to find gravity which is further ruining the speculative juices.

Although the NASDAQ has just retested 2095 and has done a quick bounce, there are too many negatives floating around to capture our buying interest. Sure, many traders will claim that the market has done a double bottom and a successful retest, especially if the market has a strong close this afternoon. In fact, should that event occur, the market would attempt to suck in more buyers and perhaps rally 1% - 2%. However, it is too uncertain at the moment to determine if that is likely to occur. Indeed even if it did occur, the 1% - 2% upside does not offer a good risk/reward ratio if you are wrong.

Our downside target for the NASDAQ remains around 2077 as we outlined in prior posts. We are comfortable with our Bearish 18% long exposure and will use any strength above 2120 to put out more shorts.

We recently wrote about the Pop and Drop scenario and that is what the market is experiencing. Don't be in a rush to time the bottom of the drop.

Defense!

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Just a Little Wrap-up From Out of The Office

"We said what we meant and we meant what we said." Pop and Drop for sure! For those who missed it, you can read the "If You Held a Taser to Our Head" section of our most recent post. This market is not done going down especially if it does a pathetic bounce tomorrow.

Stay tuned for our analysis in the morning.

Defense!

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Morning Post 10-5-05

Due to the Holidays there will be no posts today. However, please click here to read our most recent posts for our latest stock market views. Currently we are still whistling the same tune. We will resume our normal schedule tomorrow morning (10-6-05).

Be very careful out there.

The Kcap Team

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Morning Post 10-4-05

Due to the Holidays there will be no posts today. However, please click here to read yesterdays posts for our latest views.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Stock Market may Pop and Drop

The stock market accomplished its job perfectly today; nobody was happy. The Bulls are nervous that the internals were not overly impressive despite the solid performance in Semiconductors. Just when the market looked like it was going to blast off, it fizzled. Even though the volume was heavy and breadth was slightly positive the Bulls sense that the market is living on borrowed time.

Over in the Den, the Bears experienced another annoying day of a market that refuses to crack. They just know that danger lurks but that "Darn SOX" (no pun intended) keeps hope alive. All in all, the stock market is providing enough confusion and frustration for all participants to feel on edge.

The Biotech Sector is maintaining a bid, most likely due to rotation out of other speculative areas. When Bullish vibes exist overlaid by significant skepticism, the Biotech sector is often rationalized to provide growth in a non cyclical manner. Traders looking for Macro-Growth plays will often gravitate towards technology stocks. However, speculative long side traders lacking confidence in the economy seek out the beta of the Biotech Industry.

If You Held a Taser to Our Head:
The stubbornness of the market which refuses to decline in the face of many potential concerns is wearing on the Bears. The possibility of a capitulation from frustrated ursine's seems imminent. We would not be surprised to see a pop and drop scenario play out mid this week. The problem with this scenario is that the pop will be light - like diet soda - and the DROP will be heavy - like DEAD!

Risk/reward still unfavorable, be careful out there.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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Growth and Inflation 10-3-05

Good Morning.

Overseas markets were mixed with Asian markets under some pressure and European markets in a good mood. Economic news released this morning at 10:00am were the ISM and Construction Spending. While the Construction Spending was essentially inline up +0.4% the ISM number was much stronger than expected coming in at 59.4 versus expectations of 52. What is very notable is that the ISM report was the first major national data point since Katrina. Its surprising strength along with the severe increase in Prices Paid component of 78 gives little comfort to the Fed doves. The New Orders component was also up very sharply at 63.8. All in all, this report showed growth and inflation as opposed to stagflation which we have been seeing recently.

While the Fed may take this as a queue to continue hiking, market participants should consider celebrating the fact that the alarm of stagflation may have been misused. However, one report does not make a trend, so we will have to watch closely. Nonetheless, this is a step in the right direction for our long term Bullish thesis for the NASDAQ.

The stock market spiked up this morning as it likes to do every Monday morning, but it quickly faded on the release of the ISM report. Concerns that the Fed has more tightening work to do spooked the narrow minded traders. Furthermore, realization that the stock market has not broken out of its downtrend along with the fact that end of quarter markups need to be unwound, is fueling some selling pressure.

Semiconductors continue to annoy most traders due to their persistent strength over the last few days. Clearly their levity is skewing the averages and holding the NASDAQ up which is denying it a good rinse. The SIA has announced that inventory levels for chips are very low. This may be fueling some of the recent move. Keep in mind that Semiconductors are not the best leading indicator of end user technology demand. We much more prefer consumer oriented appliance sales i.e. personal computers, cell phones, and high-end electronics for a better indication of end user technology demand. Furthermore, end of year corporate spending plans much more accurately reflect infrastructure build-out potential.

The stock market is also being slightly buoyed by merger news. NRG Energy (NRG) is buying Texas Genco, RH Donnelley (RHD) is buying Dex Media (DEX), and NTL (NTLI) is buying Telawest Communications (TLWT). Mergers of any sort indicate that someone is finding value and willing to step up and buy.

The Rosh Hashanah Holiday starts tonight and may be providing psychological pressure on the market. Despite the fact that so many Jewish people work on Wall St. the Exchanges choose to stay open. Perhaps this is why the old adage has developed, "Sell Rosh Hashanah and Buy Yom Kippur".

We intend on maintaining only a 20% net long position due to the high risk we foresee for this market. Unless other internals show improvement, we will grin and bare it if the market moves slightly up without us.

Hope You Trade Well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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