February 17, 2013
Weekly Market Outlook
By Keith Schneider
Most global stock markets posted a weekly gain in a boring, relentless, low volatility rally. This makes it seven consecutive weeks. A sweat has not even been broken and a glass of water was not needed to refresh this market. Many believe we are in nosebleed territory; however, the market internals are not even close to being overbought. We spoke of a paradigm shift recently and you can see it unfolding as Gold and Bonds crater. The punch bowl of lower rates has been removed, yet the market has not flinched. While the market grinds higher, we have been entertained by the face-off between two billionaires, Carl Icahn and William Ackerman over Herbal Life. The personal grudge match playing out thru HLF (Herbal Life) has been most amusing. Ackerman went public with his massive short position claiming that HLF is a Ponzi scheme, while Icahn has amassed a huge long position at bargain prices after Ackerman’s disclosure tanked the stock. The scoring goes something like this:
Icahn calling Ackerman a loser is a -1 for Icahn (anyone that runs 12 billion successfully for years is no loser).
Ackerman's meticulous research that concludes HLF is a Ponzi scheme versus Icahn's claim HLF is a great growth story is +1 Ackerman.
Ackerman's disclosure of his research after shorting 20 million shares -2
Icahn claiming that Ackerman is hurting the little guy -1 for Icahn as he certainly is no altruist
Icahn looking to take the company private +3 for Icahn (he could do it personally from petty cash)
Anyone familiar with stock market legends, look no further than the Piggly Wiggly corner of the shorts back in 1922. My bet is with Carl, regardless of stock fundamentals. This is where some old fashioned tape reading comes in handy. Sit back, enjoy the show, as this is great theater as well as educational. Watch as each one of these players pull out the stops and bust their best moves.
Meanwhile, in this week's video we will get into the bigger picture, especially gold and bonds.
Have a Great Weekend!
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