Picks from thursday are moving up nicely today in the early going
SKF now 124 bought @ 109.9
AMZN short 68.60 now 63.28
Great moves in 2 days
Monday, March 3, 2008
Sunday, March 2, 2008
March is upon us!!!
Well February is over and March is here but the Market seems still to be in limbo with the possibilities of more fatal mortgage derivative news and that of stimulus from the now inadequate Fed . I have been thinking for the last three days of how to explain this weekend on the BLOG the mess we are in. After three days of hard thoughts I think I MIGHT be able to sum it up in a few paragraphs so if it seems like rambling I apologize.
I must say I wish I was not a trader and had Millions or Billions to set in motion which I BELIEVE will happen. There is just not a chance in the UNIVERSE the markets wont see new lows this year. Listening to Bernanke last week for two days set in motion quietly that many banks are currently under capitalized in their present structure, meaning they will have to raise substantial capital to stay afloat. The banks and Brokers are trading like they are on a death bed. Citibank is a noticeable stock here as they have lowered their dividends in the last 2 months and raised capital overseas and seem as if they might have to lower dividends and raise capital once more. Now I have no idea which banks Bernanke think are under capitalized but if Citibank was to go insolvent or had to be bailed out we are in a world of trouble.
Banks are just so loaned out with leverage that if the derivative markets dont turn around in a timely manner they will be shot. I believe the banks will see much lower prices and also the wall street heavy weights like Lehman and Goldman will see yearly lows. GS is currently trading at $169 but $150 is long term support, when GS breaks this $150 level I would not be surprised if we head back to summer 05 levels of $100. Don't get all so scared on this prediction as presently housing prices in the once boiling real estate areas are now back to 04 levels.
One of the greatest performing stock in this time is surely the internet giant GOOGLE, which should also trade back to its summer 05 level of around $250. That's almost a 50% cut from current prices but that's where I think alot of these stocks are heading. I have been hearing from people living in once hot areas of the country in real estate about massive sales signs and blocks of pre foreclosure housing seeking buying. What I DONT understand is in all of this chaos the FED seem to think we will avoid a recession by pumping the most money ever in the economy. What is happening here is a self fulling prophecy and old school economics of yesteryear. A short history note here: the 1929 depression was caused my money supply constrains. The FED suppling massive currency in the system is to fight the effects of this but where this is different in todays time is that the supply is not being filtered out because tighter credit is being applied to transactions. Where does that leave us? Leaves us in a situation that the FED is ineffective, devaluing the currency and ultimately having a little confidence by the financial institutions.
People it is time for us to get real about the situation of how we live in America. Wishful thinking is not going to protect you or make money in any market. This crisis is indeed a real crisis and it will not be fixed by giving out checks from Washington. We are going lower much lower, people who are calling bottoms here are just ridiculous and I see no bottom within the next 3 years. With all that in mind if you are long stocks in your IRA you will be in a world of hurt in the next few quarters. Being short or long ultrashort shares is the way to go. I knew I would start rambling but I will continue on this next week when I will share some information on trouble in the MUNI- BONDS world.
Talk to you tomorrow morning have a great trading week.
http://marketjedi.blogspot.com/
I must say I wish I was not a trader and had Millions or Billions to set in motion which I BELIEVE will happen. There is just not a chance in the UNIVERSE the markets wont see new lows this year. Listening to Bernanke last week for two days set in motion quietly that many banks are currently under capitalized in their present structure, meaning they will have to raise substantial capital to stay afloat. The banks and Brokers are trading like they are on a death bed. Citibank is a noticeable stock here as they have lowered their dividends in the last 2 months and raised capital overseas and seem as if they might have to lower dividends and raise capital once more. Now I have no idea which banks Bernanke think are under capitalized but if Citibank was to go insolvent or had to be bailed out we are in a world of trouble.
Banks are just so loaned out with leverage that if the derivative markets dont turn around in a timely manner they will be shot. I believe the banks will see much lower prices and also the wall street heavy weights like Lehman and Goldman will see yearly lows. GS is currently trading at $169 but $150 is long term support, when GS breaks this $150 level I would not be surprised if we head back to summer 05 levels of $100. Don't get all so scared on this prediction as presently housing prices in the once boiling real estate areas are now back to 04 levels.
One of the greatest performing stock in this time is surely the internet giant GOOGLE, which should also trade back to its summer 05 level of around $250. That's almost a 50% cut from current prices but that's where I think alot of these stocks are heading. I have been hearing from people living in once hot areas of the country in real estate about massive sales signs and blocks of pre foreclosure housing seeking buying. What I DONT understand is in all of this chaos the FED seem to think we will avoid a recession by pumping the most money ever in the economy. What is happening here is a self fulling prophecy and old school economics of yesteryear. A short history note here: the 1929 depression was caused my money supply constrains. The FED suppling massive currency in the system is to fight the effects of this but where this is different in todays time is that the supply is not being filtered out because tighter credit is being applied to transactions. Where does that leave us? Leaves us in a situation that the FED is ineffective, devaluing the currency and ultimately having a little confidence by the financial institutions.
People it is time for us to get real about the situation of how we live in America. Wishful thinking is not going to protect you or make money in any market. This crisis is indeed a real crisis and it will not be fixed by giving out checks from Washington. We are going lower much lower, people who are calling bottoms here are just ridiculous and I see no bottom within the next 3 years. With all that in mind if you are long stocks in your IRA you will be in a world of hurt in the next few quarters. Being short or long ultrashort shares is the way to go. I knew I would start rambling but I will continue on this next week when I will share some information on trouble in the MUNI- BONDS world.
Talk to you tomorrow morning have a great trading week.
http://marketjedi.blogspot.com/
Friday, February 29, 2008
SKF- update!!!!!!
For a long term play bought yesterday SKF is SMOKING!!!!!!!!!
right now it is +$9. I am holding this along with AMZN short which is up $4.20
Said it here any times this market is so dead it just doesn't know it yet. I expect SKF to goto 130 in a rush if more bad news come out on the munibonds. Lets see how the close settle but presently we are down 295 points on the DOW and the S&P at its lows of 1333
right now it is +$9. I am holding this along with AMZN short which is up $4.20
Said it here any times this market is so dead it just doesn't know it yet. I expect SKF to goto 130 in a rush if more bad news come out on the munibonds. Lets see how the close settle but presently we are down 295 points on the DOW and the S&P at its lows of 1333
TRADE CALL Updates
SKF up nicely, I am holding this though it is +$5 in one day. I think it goes higher.
AMZN short is also nice +$2.50 on it from yesterday but I am also going to hold it.
Lets see what today brings.
AMZN short is also nice +$2.50 on it from yesterday but I am also going to hold it.
Lets see what today brings.
Thursday, February 28, 2008
Friday
For Friday I am looking for a low volume day to finish off the week. Today I was very disappointed in the bull action and I will be writing a thesis this weekend as to where I think the markets will go in coming months.
Most of you know I think the markets are in trouble but it just doesn't know it yet. Commodities seem to be on fire and how much higher will we they go is anyone's guess. Gold definitely seem like $1000 is the target and the EURO$ seem like it wants 1.57.
I will be giving out a few stocks in the next week which I think will have a hard time in the next 12 months. The first one I will mention now is GS (Goldman Sachs), it has been the saving grace of the brokers but I think its time is near and I think there is a good shot for GS to trade below $100 in the next 12 months.
Watch out Sunday night for an in depth analysis and some stocks which I believe will be 1/2 their present value in a year.
MARKETJEDI
Most of you know I think the markets are in trouble but it just doesn't know it yet. Commodities seem to be on fire and how much higher will we they go is anyone's guess. Gold definitely seem like $1000 is the target and the EURO$ seem like it wants 1.57.
I will be giving out a few stocks in the next week which I think will have a hard time in the next 12 months. The first one I will mention now is GS (Goldman Sachs), it has been the saving grace of the brokers but I think its time is near and I think there is a good shot for GS to trade below $100 in the next 12 months.
Watch out Sunday night for an in depth analysis and some stocks which I believe will be 1/2 their present value in a year.
MARKETJEDI
TRADE CALLS!!!!!!!!!!!!!
Make three calls here.!!!!!!!!!!!!!
These are longer term plays
Long SKF @109.90 here - This i am keeping as a long term swing (months)
Short AMZN @ 68.60 here. This i am also keeping but I have a mental stop and might add to the position.
Short SOV @11.25. This is also longer term play.
I will update on the weekend
These are longer term plays
Long SKF @109.90 here - This i am keeping as a long term swing (months)
Short AMZN @ 68.60 here. This i am also keeping but I have a mental stop and might add to the position.
Short SOV @11.25. This is also longer term play.
I will update on the weekend
Thursday
Employment number came in 8:30 on the rise. Proof that recession is close if not here already. All numbers now point to a downturn in the economy and with commodity prices rising we might just be at the beginning of it.
On to the technicals: It was a narrow range day for the markets yesterday, from the opening to the close anyway, as we did see some whippy moves intraday, but at the end of the session we closed near the unchanged level. Wednesday’s doji day in fact formed an NR 7 bar, the narrowest range of the last 7 days and often suggests a big move the next day, so we could have that to look forward to today.
If a big move is coming we need to be prepared to go either direction, although my short term bias is now to the upside, so that would be ideal trend for Thursday. Either way, I probably look to get aggressive on the first sign of a trend either way. If we coil early and breakout let’s look for momentum trades. If no discernible patterns present themselves early, then we can look for a break of the first hour’s range for a hint to the possible trend of the day. If the NR7 scenario plays out, we could have a nice trend day for Thursday.
On to the technicals: It was a narrow range day for the markets yesterday, from the opening to the close anyway, as we did see some whippy moves intraday, but at the end of the session we closed near the unchanged level. Wednesday’s doji day in fact formed an NR 7 bar, the narrowest range of the last 7 days and often suggests a big move the next day, so we could have that to look forward to today.
If a big move is coming we need to be prepared to go either direction, although my short term bias is now to the upside, so that would be ideal trend for Thursday. Either way, I probably look to get aggressive on the first sign of a trend either way. If we coil early and breakout let’s look for momentum trades. If no discernible patterns present themselves early, then we can look for a break of the first hour’s range for a hint to the possible trend of the day. If the NR7 scenario plays out, we could have a nice trend day for Thursday.
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