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.
Friday, March 14, 2008
BYE BYE FINANCIALS
I now fully believe the market has enough of a catalyst to test the lows and maybe make new ones. There will be more hedge fund blowups on the horizon in my opinion. When a major investment bank (BSC) says basically that they are out of business it doesn't bode well for market confidence. Rumors are around today that UBS will announce more bad news and rumors that (CYN) City National may halt dividend and is facing a near term liquidity crisis. Stay tuned. Will the Fed come to the rescue and just buy all the bad debt?
How about the President of BSC saying things were ok with CNBC the other day? Can we trust anything in here? Do you want to be long finacials in here? He said liquidity was just fine. How come I heard European banks were not taking Bear Stearns business on Tuesday and Alan Schwartz the President didn't know.?Give me a break.
How about the President of BSC saying things were ok with CNBC the other day? Can we trust anything in here? Do you want to be long finacials in here? He said liquidity was just fine. How come I heard European banks were not taking Bear Stearns business on Tuesday and Alan Schwartz the President didn't know.?Give me a break.
BEARS STERNS IN MEGA TROUBLE
Told you guys we are in trouble. Bears Sterns news just out of the FED RESERVE lending them monies for 28 days because they are in a liquidity crisis. What does that mean! Means they are in bankruptcy on their balance sheet. Lets see what happens in a few, will update..
CPI: Have the bulls returned
Some mildness was reported in the CPI but many are questioning the numbers as it showed decrease in gas prices which raised some suspicion in the number itself. As I have been saying I would love us to rally to the 1378-1400 area on the S&P so I can short and sit back as I do believe the path of least resistance is down. If we do get a lift today next week alot of shorts might cover into options expiration.
I think they are still trying to save the investment banks but who knows how much it will do.
Will be back after the open
I think they are still trying to save the investment banks but who knows how much it will do.
Will be back after the open
Thursday, March 13, 2008
Totally news driven
Today was a prime example of a news driven market. The market are looking for any news via the fed, mortgage derivative, hedgie etc to trade on. It almost seem too fake how we just trading off news in a hope of a rally or a crash. Here today I have to give it up to the bulls as the overnight lows didn't make a big impact on the final numbers. Tech, bios and agro stocks seem to have found some buying or short covering from the open to pan out a gain.
Well good to know Standard and Poors are on top of the market as usual. They claimed today that most of the bank write offs are coming to an end and we should be out of the woods soon. Well I have so much faint that I had my $5 in Enron when Standard and Poors said they were AAA rated, PLEASE lets be real here. Folks at Standard & Poors are a bunch of idiots and we will see soon enough if we are near the end.
Do you really think the Carlyle group is the only hedge fund out there that is using 32:1 leverage and got burnt. I think not but we will see soon enough.
Right here I am taking it easy as the FED action thru a money wrench in the setups i was looking at.
Remember next week is option expiration week and we should get some nice movements monday and tuesday. I am definitely not trading next friday as I haven't been having too much luck on options expiration days.
Well good to know Standard and Poors are on top of the market as usual. They claimed today that most of the bank write offs are coming to an end and we should be out of the woods soon. Well I have so much faint that I had my $5 in Enron when Standard and Poors said they were AAA rated, PLEASE lets be real here. Folks at Standard & Poors are a bunch of idiots and we will see soon enough if we are near the end.
Do you really think the Carlyle group is the only hedge fund out there that is using 32:1 leverage and got burnt. I think not but we will see soon enough.
Right here I am taking it easy as the FED action thru a money wrench in the setups i was looking at.
Remember next week is option expiration week and we should get some nice movements monday and tuesday. I am definitely not trading next friday as I haven't been having too much luck on options expiration days.
When will they get it!!!!!!!!
Carlyle Capital margin call, Bear Sterns lost of confidence, bad retail numbers and news of 20% job cuts on Wall Street, YEN is now at its highest level in 13 yrs are some of the news that are pounding us this morning. The news is nowhere good and that's why I am a perma bear long term. Yes we will get the bear market rallies but come on we heading lower much lower.
In the next few months most stocks will have made 52 weeks lows and many will make multi year lows. The FED is powerless against this spiral and SHOULD not try and help the markets as bear markets and recessions are a natural process of cleansing, just like we have natural disasters such as hurricane which are nature cleansing phenomenons.
Well for today we will see how far the gap us down. I would love ot see a huge gap down in certain stocks so I can play the bounce for the day but today if we dont bounce hard enough the bears might take it to the bulls and drive us way down.
I will be watching the financials closely today for reaction. Expect a big spike in SKF, wish I had step back into that play, oh well! that's how it goes.
Good luck
In the next few months most stocks will have made 52 weeks lows and many will make multi year lows. The FED is powerless against this spiral and SHOULD not try and help the markets as bear markets and recessions are a natural process of cleansing, just like we have natural disasters such as hurricane which are nature cleansing phenomenons.
Well for today we will see how far the gap us down. I would love ot see a huge gap down in certain stocks so I can play the bounce for the day but today if we dont bounce hard enough the bears might take it to the bulls and drive us way down.
I will be watching the financials closely today for reaction. Expect a big spike in SKF, wish I had step back into that play, oh well! that's how it goes.
Good luck
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