Pending bankruptcy and halting of New Century Financials stock gave the market early jitters.
A slew of mergers and acquisitions gave the market hope which the bulls were able to ride through the middle all the way to market close.
Is KKR telling us something by their acquisition of Dollar General ? Telling us that they expect worsening economic conditions that will force all of us to shop at dollar stores.
Asset managers were the biggest winners today while builders were the biggest losers.
All indices were strongly in the green. But volume was exceptionally light. Just take a look at the Qs . Lightest volume in 15 trading sessions.
Light volume is an indication traders are on the sidelines awaiting key economic data such as retail sales and business inventories being released tomorrow.
I expect tomorrow to see heavier trading volume. As to which side the market will lean, I do not have a clue. If retail sales are weak, the market could drop as fears increase over a possible recession or atleast, a bigger than anticipated slowdown. On the other hand we could rally strongly because, traders believe a rate cut will be imminent.
Monday, March 12, 2007
Friday, March 09, 2007
RECAP
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.
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.
PRE MARKET WATCH
Stocks are expected to open higher after February employment numbers came in line with expectations . The numbers however were the lowest since January 2005.
The trade deficit slid nearly 4% in January. A weaker dollar and a curbing of the US consumers appetite, for relatively more expensive foreign goods, played a part no doubt.
Overseas markets are mixed.No big gainers in Asia but India was down over 1%. Europe is a mixed bag as well, with a lack of clear direction.
My take: The markets will open strong, drift throughout the day and finish weaker on profit taking ahead of the weekend.
The trade deficit slid nearly 4% in January. A weaker dollar and a curbing of the US consumers appetite, for relatively more expensive foreign goods, played a part no doubt.
Overseas markets are mixed.No big gainers in Asia but India was down over 1%. Europe is a mixed bag as well, with a lack of clear direction.
My take: The markets will open strong, drift throughout the day and finish weaker on profit taking ahead of the weekend.
Thursday, March 08, 2007
RECAP
Strong start to the day as expected by the strength across Asia and Europe. Weak close.
The rumors of New Century Financials pending Chapter 11 bankruptcy soured the bullish mood.
I think Tom Brown is a very brave man. But, there is a very thin line between being brave and being downright foolish. Right now the only mortgage company I would bet on to survive the subprime melt down would be Countrywide . All bets are off when it comes to the other lenders. I wouldn't even count on Freddie and Fannie making it through.
Traders appear to be anxiously awaiting tomorrows job numbers . We could see weakness if traders decide to go cash for the weekend.
I cut back some long positions as I sensed weakness later on in the day. I added to my QID , DXD , SDS and MZZ positions. Took in some TWM as a precaution . Judging by the down, up , down , up trend of this week I expect tomorrow to be a red day. As I mentioned before, neither the bulls nor the bears appear to be pressing their advantage.
The rumors of New Century Financials pending Chapter 11 bankruptcy soured the bullish mood.
I think Tom Brown is a very brave man. But, there is a very thin line between being brave and being downright foolish. Right now the only mortgage company I would bet on to survive the subprime melt down would be Countrywide . All bets are off when it comes to the other lenders. I wouldn't even count on Freddie and Fannie making it through.
Traders appear to be anxiously awaiting tomorrows job numbers . We could see weakness if traders decide to go cash for the weekend.
I cut back some long positions as I sensed weakness later on in the day. I added to my QID , DXD , SDS and MZZ positions. Took in some TWM as a precaution . Judging by the down, up , down , up trend of this week I expect tomorrow to be a red day. As I mentioned before, neither the bulls nor the bears appear to be pressing their advantage.
The US markets are poised to open higher after significant gains overnight in Asia and green indices all across Europe .
Economists are forecasting stronger US economic growth .
Retailers had a lackluster February. 'Unseasonably cold weather' to blame. If the market rallies from here I do think retailers are a very good buy though.
The European Central Bank raised rates from 3.5 to 3.75%. Euro is going to show strength as a result.Long FXE.
Job losses fell but are still showing weakness .
Economists are forecasting stronger US economic growth .
Retailers had a lackluster February. 'Unseasonably cold weather' to blame. If the market rallies from here I do think retailers are a very good buy though.
The European Central Bank raised rates from 3.5 to 3.75%. Euro is going to show strength as a result.Long FXE.
Job losses fell but are still showing weakness .
Wednesday, March 07, 2007
MARKET RECAP
We were making decent progress till the markets took a dive in the last hour. Kind of tells you how many people want to be long. Homebuilder D.R. Horton CEOs comments that '2007 is going to suck' probably played a large part. Perhaps the moderate to sluggish economic growth around the country as revealed by the Fed beige book also played a role. Nonetheless, I expect tomorrow to be a red day all around unless, Blackstone buys the S&P 500 at a 30% premium.
The oil sector did really well today. As to how long this strength will last I have no idea. Its notable that the oil sector has the least correlation, to the overall markets.
The Bank of England and the European Central Bank will meet tomorrow to decide interest rate changes. A rate increase by the BOE or the ECB would likely have a bearish effect on the overall markets.
These were the big hedge fund losers in February. The guys ( and gals) who got caught with their pants down so to speak. Question: How can you be a hedge fund without being hedged ? Seems to be the case these days with Amaranth, Red Kite and so on.
The mortgage blowup has spread beyond subprime. Reminds me of a memorable Dennis Gartman quote " When they raid the house of ill repute, the good girls and the piano player also go to jail".
The oil sector did really well today. As to how long this strength will last I have no idea. Its notable that the oil sector has the least correlation, to the overall markets.
The Bank of England and the European Central Bank will meet tomorrow to decide interest rate changes. A rate increase by the BOE or the ECB would likely have a bearish effect on the overall markets.
These were the big hedge fund losers in February. The guys ( and gals) who got caught with their pants down so to speak. Question: How can you be a hedge fund without being hedged ? Seems to be the case these days with Amaranth, Red Kite and so on.
The mortgage blowup has spread beyond subprime. Reminds me of a memorable Dennis Gartman quote " When they raid the house of ill repute, the good girls and the piano player also go to jail".
MARKET UPDATE
We have no clear direction today. The indices have been bouncing around all day. Red one minute, green the next. The Bears are shell shocked from the drubbing they took yesterday. Meanwhile, the Bulls are still in recovery from the massacre from last Tuesday through Monday. Neither side wants to push their advantage. I will pay attention to the markets 2:30 EST onwards to get a sense of where we are heading. In periods of indecisiveness it pays to be fully hedged or in cash. You do not want to be caught leaning the wrong way as a lot of bulls learned last Tuesday (and many bears learned yesterday).
Paulson is in Asia. Trying to calm things down I suppose.
Look whose back ! Is he going to keep doubling down to regain his losses, like he did last time around ?
Asia is mixed but Japan is down. The US markets tend to correlate strongly with Japan so we could see some downside. Europe is mostly in the green .
Expect the bull prepare for the bear.
Look whose back ! Is he going to keep doubling down to regain his losses, like he did last time around ?
Asia is mixed but Japan is down. The US markets tend to correlate strongly with Japan so we could see some downside. Europe is mostly in the green .
Expect the bull prepare for the bear.
Tuesday, March 06, 2007
Remember the Bull
The bulls took over and never took their foot of the pedal . My stock today was NYX. I had almost forgotten I had this in the portfolio till it took of after 2pm. Short squeeze or whatever it jumped nearly 6 points. The indices closed near the highs of the day so I expect more upward momentum tomorrow unless ofcourse, we have a sea of red in Asia and Europe.
MARKET UPDATE
The bulls are going great guns. The indices are at a daily high. Can we go higher from here or will the bears crash the party ? On a personal note the portfolio is soaring. NTRI,TZOO, BLUD and GOOG are all up over 2%. QLD, DDM and SSO are adding to the green. Will add some SDS, DXD , MZZ and QID for insurance.
RALLY
I expect nothing less than a strong rally in the US markets today. Asia is a stream of green arrows. India up over 2 % , China up nearly 2 % , Japan up 1.2%. Europe is very strong too and the momentum, should carry across the Atlantic.
The Yen has seen a big decline which should help us plenty since, it was this 'unwinding' of the carry trade and subsequent appreciation in the Yen, that was a big factor in the stock market plummet.
The economic data released today has been pretty crappy. Lets see if that puts a lid on US equities. Productivity is down and same store sales stink.
Greenspan is at it again . Now there is a 1/3 chance of a recession. Hmmmm. How does Mr. smarty pants figure that out. 1/3. Why not 2/5 or 1/6 or 30% or............
Will bad debt from the sub prime mortgage fall out be limited ? Paulson certainly thinks so. I do not.
The plan today is to expect a rally. Nothing less than 100 points on the Dow, 25 on the Nasdaq and 15 on the S&P 500. And we have Bernanke speaking . Will he spark of a huge rally ?
The Yen has seen a big decline which should help us plenty since, it was this 'unwinding' of the carry trade and subsequent appreciation in the Yen, that was a big factor in the stock market plummet.
The economic data released today has been pretty crappy. Lets see if that puts a lid on US equities. Productivity is down and same store sales stink.
Greenspan is at it again . Now there is a 1/3 chance of a recession. Hmmmm. How does Mr. smarty pants figure that out. 1/3. Why not 2/5 or 1/6 or 30% or............
Will bad debt from the sub prime mortgage fall out be limited ? Paulson certainly thinks so. I do not.
The plan today is to expect a rally. Nothing less than 100 points on the Dow, 25 on the Nasdaq and 15 on the S&P 500. And we have Bernanke speaking . Will he spark of a huge rally ?
Monday, March 05, 2007
GOING FISHING
I am going to find some issues to go long today. There is too much doom and gloom out there. Picking some high beta names. Some NTRI, a bit of BLUD, a little AKAM, a pinch of CELG and a topping of HANS. I think I'll toss in some TZOO and a helping of GOOG for good measure.And I'll close out that blasted AAPL short position for good measure. Maybe we'll rally, maybe we won't. But if we rally I think I may outperform. If not I will just dump 'em all.In a bear market its best to position for a rally before the actual rally because, once you spot the rally its usually too late.
Slowdown in the service sector. What do you expect ? Tightning of credit leads to reduction in demand, which equates to an economic slowdown. Add in the real estate slump and the inability of consumers, to use their homes like ATMs and you have a recession dead ahead.
More on the subprime blowup . And people couldn't see this coming ? Seriously, if you could breathe, you were entitled to a home loan. With all those marginal consumers getting home loans and equity lines of credit, an accident was waiting to happen. And this is far from over. The worst is yet to come.
Oil prices extend decline. Makes sense since global growth is slowing, based on the economic data we have seen and oil prices are likely to pull back, with a reduction in demand. However I do not see oil prices falling below $40 over the next 12 months.
Is he going to be the poster buy for the leverage buyout excess of the 2000s ? With a cover on Fortune the chances are pretty high.
This could go a long way in displacing the US as the world's technology leader. If the brains no longer want to come here, the chances are the next great technology companies, will be conceived in Bangalore, rather than Silicon Valley.
The restatements continue.Lucky for me I am short RIMM. Could all these restatements be a result of option related expenses or could fradulent accounting be playing a part ? I wonder.
More on the subprime blowup . And people couldn't see this coming ? Seriously, if you could breathe, you were entitled to a home loan. With all those marginal consumers getting home loans and equity lines of credit, an accident was waiting to happen. And this is far from over. The worst is yet to come.
Oil prices extend decline. Makes sense since global growth is slowing, based on the economic data we have seen and oil prices are likely to pull back, with a reduction in demand. However I do not see oil prices falling below $40 over the next 12 months.
Is he going to be the poster buy for the leverage buyout excess of the 2000s ? With a cover on Fortune the chances are pretty high.
This could go a long way in displacing the US as the world's technology leader. If the brains no longer want to come here, the chances are the next great technology companies, will be conceived in Bangalore, rather than Silicon Valley.
The restatements continue.Lucky for me I am short RIMM. Could all these restatements be a result of option related expenses or could fradulent accounting be playing a part ? I wonder.
Friday, March 02, 2007
California Dreamin
Wow. That was one wild week. Lots of opportunity to make money. Even more opportunity to lose money. With that close today you could smell the fear. Nobody wants to be holding going into this weekend. I can't blame them. As for me I'm going back to Cali for some R & R. And work on some market 'strategery' as Dubya would put it.
Our boy Bernanke is scheduled to speak today at 11pm EST. I would look for a slight rally.
Now Poole says there could be a recession. Then in Greenspan like fashion, he hedges his bet and says the central bank does not forecast one. Hmmmm.
Goldman , Merrill and Morgan Stanley 'almost' junk ? Not surprising considering the majority of their profit comes from trading , derivatives and other 'higher' risk activities.
The plan today is to play for a rally but stay alert for more downside. I am leaning towards a green finish on all indices but, there is the possibility of a selloff in the last hour of trading as traders fear holding over the weekend, in these volatile conditions. Than again Bernanke could spark of a major rally.
Now Poole says there could be a recession. Then in Greenspan like fashion, he hedges his bet and says the central bank does not forecast one. Hmmmm.
Goldman , Merrill and Morgan Stanley 'almost' junk ? Not surprising considering the majority of their profit comes from trading , derivatives and other 'higher' risk activities.
The plan today is to play for a rally but stay alert for more downside. I am leaning towards a green finish on all indices but, there is the possibility of a selloff in the last hour of trading as traders fear holding over the weekend, in these volatile conditions. Than again Bernanke could spark of a major rally.
Thursday, March 01, 2007
Paulson Says U.S. Economy Is `Healthy' and Job Market Is `Firm' . Hmmmmm. What else what he going to say ? The economy is 'unhealthy' and the job market is 'wobbly' ?
Some insider trading news. What else is new ? I would suspect anyone with an IQ of over 100, has a less than a 1 in 10 chance of being busted for insider trading. With those kind of odds can you blame them ?
Countrywide sees a rise in delinquent sub-prime loans. Wow. Big surprise there (Not).
Greenspan does a 180 on a US recession. Way to hedge your bet Alan ! Now either way he is right.
Some insider trading news. What else is new ? I would suspect anyone with an IQ of over 100, has a less than a 1 in 10 chance of being busted for insider trading. With those kind of odds can you blame them ?
Countrywide sees a rise in delinquent sub-prime loans. Wow. Big surprise there (Not).
Greenspan does a 180 on a US recession. Way to hedge your bet Alan ! Now either way he is right.
SHOTS FIRED
The bears did a Tony Montana on the markets this morning but now the bulls are trying to answer back. A pretty wild swinging day. I would think a short term bottom is in and we rally for a week or two till resistance which is Dow 12450-12500 or so.
I have lightened up the portfolio on QID, MZZ, SDS and DXD the double inverse indices. I have added QLD, DDM and SSO - the double bull indices into the mix. Have not lightened up much on the stock holdings yet because I still expect a rally. Still holding gold and the Euro via FXE. Looking to add more Yen as a hedge.
If we end in the green today, the excitement will likely spill over onto tomorrow. The first shots have been fired but the war is not over yet. I believe a change in market direction from bull to bear is on the horizon.
Wednesday, February 28, 2007
Lets see what the last 2 hrs bring. Will the Dow close above 100 ,will we see 50-80 or will we see a sell off ? I put stops on some DXD, MZZ, QID and SDS positions in case the market runs up and continues the momentum tomorrow. I added into NYX judging the strength throughout the day. Pullbacks on NYX have been on lighter volume which is a factor to note. Right now I am trying to balance my longs and shorts to see what direction the markets take. I do not want to get caught leaning too much in one direction lest I get burned. The key is too find stocks showing relative strength and go long and to 'hedge' by finding relative weakness and shorting those.
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