Market Observations 08/14/06

In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.

Today a UN brokered cease fire in Lebanon sparked a early triple digit rally as the price of crude has fallen 5% from its high 3 weeks ago on "easing" tensions.

It's time to break the pig out of his poke....SOOHEY PIG PIG AWARD: Cisco +2.8% on a Barrons recommendation. After quarterly report on 08/09 Cisco jumped 15.3% as they beat the number.

Investors are being led to believe that good times are ahead for Cisco and by association, tech in general. Cisco revenues +$1.4B for a 21% YOY increase. Good news??

Not so fast Joe ...... Inside the number: Receivables +$1.1B for a +50% YOY increase; sequentially revenues +9%; receivables +10.7%. What looks like Tech sizzle is real fizzle, SOOHEY!!!!

Despite the cease fire and falling crude, todays early rally slipped as all indices hit max pain on short covering and flushed the weak hands. Bonds were down again and borrowing costs are on the rise.

All major indices & market leaders (small, mid-cap, metals, energy, commodities) showing weakness and lack of conviction. In the shadows: TUE PPI; WEN CPI & Capacity Utilization.

Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!!!

Comments