Where should I start!!!! I will first start by saying I told you so and secondly PEOPLE need to goto JAIL over this crisis. World markets are just opening overseas and are locked limit down as the news of Bears Sterns total collapse and sell out to JP Morgan for $2 a share is sending markets downward. Imagine this stock was $159 last yr WOW. There are obviously serious problems going on at Wall Street and this will no doubt be the first of a number of collapse that will occur in coming months.
Anyone think Bear Sterns was the only firm doing highly leverage trading in the market are totally wrong. Hedge funds, mutual funds and trading institutions use these highly leverage tools to make more money on smaller capital requirements everyday. I dont know what will happen at the end of day tomorrow but I am sure some time tomorrow we will be down over 380 points on the Dow.
What I see happening in the US markets is the same exact thing that happened to Japan in the 90s of massive inflation, devalued Yen, real estate bust and increase unemployment. The most important note we should take away from the lessons of Japan's 90s financial mistakes is that it has taken almost 15 yrs to fix the problems.
I will be a very interesting week and I think this week will be a week if you are a excellent trader to make lots of MONEY. This news should gap us down limit down tomorrow morning, Fed meeting on tuesday and options expiration on Friday will make this a roller coaster week for sure.
Tonight I am going to sleep very sound knowing this week WILL be a great week for volatility and some wonderful trades.
I will try and post some trades as fast as I can but I am sure it will be a fast spaced news filled week.
Sunday, March 16, 2008
CONFIDENCE
Obviously we are experiencing a crisis of confidence on Wall Street in the past few weeks. The FED has been working overtime to make sure Wall Street the gears of America keep on going. Monday we will see how much was done over the weekend to amend the collapse of Bear Stern. Personally I dont think anyone in their right mind who manages money wants to be the first one to try and bet against the current crisis.
Last week there was substantial put buying in Bear Sterns, Morgan Stanley and Lehman Brothers. The puts on Bear Sterns were spot on and I think the put buyers in the other might also be spot on. No way as I said before that the mortgage meltdown just end in write downs, they should end in one of the banks going under due to cash crisis due to massive liquidation or a flat out Bankruptcy.
Today I will be looking at some charts to plan out the trading for this upcoming week, remember this week is option expiration, which usually brings in the manipulators of the high volume traded equities. This week tuesday is also the FED meeting which could pose well for high volatility with everyone guessing what the FED will ultimately say about the current market situation.
I hope we bounce hard some time in here because it would set up a sweet short opportunity as I see too many BEAR flags forming on the longer term charts.
What OIH here, it looks like it wants to break down out of the toppy pattern and I might go out on a limb here to also say the Euro looks extremely toppy and is dead at my target noted last month of 1.57. A break down from here can send us right back to the 1.38 area, which would be good for a OIL and Gold price pullback, we will see soon enough.
Last week there was substantial put buying in Bear Sterns, Morgan Stanley and Lehman Brothers. The puts on Bear Sterns were spot on and I think the put buyers in the other might also be spot on. No way as I said before that the mortgage meltdown just end in write downs, they should end in one of the banks going under due to cash crisis due to massive liquidation or a flat out Bankruptcy.
Today I will be looking at some charts to plan out the trading for this upcoming week, remember this week is option expiration, which usually brings in the manipulators of the high volume traded equities. This week tuesday is also the FED meeting which could pose well for high volatility with everyone guessing what the FED will ultimately say about the current market situation.
I hope we bounce hard some time in here because it would set up a sweet short opportunity as I see too many BEAR flags forming on the longer term charts.
What OIH here, it looks like it wants to break down out of the toppy pattern and I might go out on a limb here to also say the Euro looks extremely toppy and is dead at my target noted last month of 1.57. A break down from here can send us right back to the 1.38 area, which would be good for a OIL and Gold price pullback, we will see soon enough.
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