03 August 2010

Moving Forward

As we have seen before, conduit driven surges slide back. This one slid back quite quickly. But note money went into SAI, pushing it over 17. Whole numbers are always important especially in day trading, just like in forex. I have seen this a lot in the aftermath of the crisis, when the money flow conduit surge falls back, money goes into companies which are interesting investing choices.

That has been a frustrating feature of the market post-crisis, and one whose causes I have been elaborating here. It is where though the computational action of the market is nesting. It is like subtle evidence of a real recovery in amongst the mess of conduit driven money flows and their limitations.

The cause of the hope/despair is precisely the conduit created to give an illusion of hope. But I have been saying is the fall-backs are actually the hope, but real hope, where the market gets its computational teeth into stocks.

An interesting question for me is to what extent is the stock day trading time frame is like a forex market. The chart pattern of SAI suggests a breakout (look at it with candles), but like the patterns in forex there is resistance being provided by the long term tight range it is stuck in. There is a problem with companies which fall from heights, it is hard for them to get back there, to put it mildly. That is the probable cause of those twin spikes.

The problem for SAI is its early promise fell into flat revenue growth. This brought the projections for future revenue built into its high valuations back down to earth (a slightly similar story was seen with that bell-weather of the past, CROX, its fall marked for me the real end of that rise).

But those revenue growth figures look good to me, especially in the recent economic environment and its COA looks fine. This is not an investing analysis of the company, I am looking for structures for the market to potentially computationally hang onto (there are other issues in its balance sheet, but that is something for an analyst to discuss).

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