Friday, March 09, 2007


We got of to a flyer today with a big gap up open . From there on it was pretty much a fade the gap story. We recovered at the end to finish 15+ on the Dow , less than 1 on the S&P and slightly red on the Nasdaq.

Fed Governor Susan Bies made the headlines today, with her remarks about the subprime melt down only being the beginning. I'm on the same page as her. The mortgage and real estate industry will only get worse from here. In related news, over 500,000 homes could be added to current inventory based on, the rise in defaults and foreclosures. You also have Bernanke taking a hard line on Fannie Mae and Freddie Mac. You can be sure that the Fed and company are very worried about the mortgage/real estate situation. They may not act like its a big deal but, deep down inside they know its a problem and in their subtle and not so subtle ways, ( case in point Bies) they are acknowledging its a serious issue that must be reckoned with.

China is forming a fund to invest its $1 trillion in reserves. Lets hope they don't use the proceeds to short the US equity market.

Wasn't it barely a year ago when AMD was the darling of Wall Street ? My, how times have changed . All that talk about AMD eating Intel for lunch and now this. On a personal note, I think AMD is a buy at current prices .

Smartmoney has my favorite sector tracker tool. Steel was tops for the week. Year to date Tires are up a whooping 33.59 %. Starting Jan. 2nd you could have invested in the tire sector and be done for the year.

Why India's mind boggling growth could come to a screeching halt . Maybe this is a good contrarian play.

Is the volatile market wrecking havoc on Goldman Sachs ?

Option expiration is next week. Could make for good volatility. I am confident the Dow will trade somewhere between 5,000 and 15,000 next week. I hope I am right.

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