The Deciding Factor

While sentiment is now on the bullish side, there is still room for sentiment to get more extreme whether looking at the put/call ratios, Rydex or the Investors Intelligence survey. The reason I decided to make a stand here on the short side is the shear amount of secondary offerings that are about to hit this market. I believe that the supply will at a minimum give the market pause through the end of the week and possibly takes the S&P 500 back down through 1130.

9 comments:

Chaos! said...

I'm hearing the DB rights offering isn't coming this week. Are you hearing differently?

Tsachy Mishal said...

I believe it was launched but the subscription period lasts for a while. But I suspect most of the money is raised during the subscription period. I doubt people raise the cash at the last possible second.

Tsachy Mishal said...

http://www.db.com/ir/en/download/BFT03426BFT007_BITS_N_1155_M-prefix_English_extract_clean_bannerless.pdf

Tsachy Mishal said...

The subscription period lasts through October 5.

Tsachy Mishal said...

Are there any European readers out there? Don't the rights trade?

Tsachy Mishal said...

Subscription rights start trading tomorrow on the NYSE and XETRA. I suspect that is when the majority of the supply is felt.

Chaos! said...

That's a big sell order!
Thanks

Anonymous said...

Cap, how do you keep track of stock offerings?

Tsachy Mishal said...

There is a calendar in the Markets data section of the Wall Street Journal website. For shelf offerings one must keep an eye on headlines or do a search through news. The DB and PBR offering have been in the news for a long time and I pay attention to those type of things and ignore headlines involving Ben Bernanke or politics.