4:00pm
S&P rallies back from its lows (~1187) to close higher by 4 points to 1213.
3:58pm
NYT: Reporting that Wachovia (WB) is in preliminary talks with Citigroup (C).
3:25pm
50MA served as support. ES rallying to new session highs.
3:07pm
ES pulling back into its 50MA (1198). Should serve as support.
3:04pm
My bias remains on the bullish side, because we’ve held the 61.8% retracement support level. However, holding positions over this weekend is very risky. You’d be essentially gambling if and how this bailout plan gets done. I’m not playing that game. I’d rather wait for the initial reaction and play the volatility intraday on Monday.
2:56pm
RIMM is down 28% to $70.33
2:23pm
Volume waning on this rally. I’m not shorting, but I’m out of my long day trades.
2:12pm
WB is near session lows to $8.72, down 36.5%.
1:41pm
Yesterday’s high is a logical spot for profit taking for day trades, assuming it gets above a 61.8% retracement (from yesterday’s high to today’s low).
1:20pm
The market has found a bid, breaking above the 200MA. VIX has pulled back well under 36.
1:02pm
House Minority Leader Boehner: Negotiators must seriously consider Republican alternatives. A large number of House Republicans may vote against the TARP plan. Must move quickly, but must also protect taxpayers. Will not agree to a bill that will “sell out” taxpayers.
1:01pm
ES attempting to break above 200MA.
12:48pm
Selling in WB is accelerating. Stock is down 30% to $9.55
12:25pm
Wachovia Bank (WB) is very weak. Down more than 25% to $10.27
NCC down 53%, DSL down 37%.
12:22pm
A $56B economic stimulus package fails to pass the Senate.
12:04pm
Some bearish signs coming into the market now. The VIX has moved above 36. Treasuries have spiked in recent minutes. And the S&P continues to creep lower. The ES is testing its 50MA (1194.50).
11:57am
FYI: I’m getting long a little gold here using DGP (double long gold ETF). This is a swing trade.
11:51am
House approves tax credits for wind and solar companies.
~ Bush has threatened to veto this bill but backs the Senate bill.
11:49am
Treasurer at NCC: Concept of a seizure of any part of NCC by FDIC is “ludicrous”. Currently well capitalized. Remarks they can manage any credit situation, even under “severe” conditions. No fire sales required.
~ Some famous last words here. I think we’ve heard this before…
~ NCC is down 38%
11:44am
VIX making a fresh session high (35.56). Still a lot of fear in this market.
White House: No reason to believe a bailout deal cannot be finished by Monday.
11:24am
The TED spread is improving somewhat, under 285bps, but that is nothing to celebrate. Historically, it ranges between 10 and 50 bps.
~ At least its moving in the right direction…
~ I’m tracking the TED spread on a 5-minute delay at Bloomberg.
11:11am
ES has confirmed a break above the 200MA, but the volume is light.
11:08am
Senator Reid: Rescue bill will be finished and lawmakers will remain in session as long as necessary.
Reportedly, House Republicans have agreed to negotiate over the rescue plan.
10:16am
CNBC: Latest rescue package draft has established a financial stability board.
~ I can see Paulson’s face right now…
10:04am
ES 10-minute continues to test its 200MA. Level serving as resistance.
10:01am
Some financials are performing well today: JPM up 4%. BAC up 3%. USB, COF, WFC, JEF, MER all in positive territory.
10:00am
TED spread back under 300bps, better but hardly healthy.
9:57am
CNBC: CEO of Morgan Stanley (MS) sent a memo to employees recently, moving ahead with Mitsubishi deal. Deal it still days away. Could bring in $8.5-$9.5B.
9:56am
ES rallying into its 200MA (1200.50).
9:55am
Sept. Consumer Confidence Index: 70.3 v 70.8e (73.1 prior)
9:44am
Gold rallying to fresh session highs, just under $900. VIX on the rise near 35.50
9:40am
President Bush: Will get a rescue package passed.
JPM confirmed at $10B offering at $40.50/shr
~ Ahead of the $8B anticipated
9:32am
Wachovia is getting hammered, down 26%. MS down 12%. NCC may not make it, down 20% and under $4.
RIMM down 22% to $76.25. AAPL down 6% in sympathy.
9:20am
ECB: Coordinated rate cuts not an option at this time
9:17am
President Bush to speak at 9:35am on the bailout plan. Credit markets are still frozen. TED spread remains above 300bps.
9:12am
ES down about 20 points to 1192, but off session lows (1184.75). Continues to hold support. Check out the 60-minute. I’m interested in buying at support with a stop just below support. If we break, I’ll short.
Good morning.
There was a lot of news after hours yesterday. RIMM missed earnings and got hammered in after hours trading. WM became the largest bank failure in history. JPM acquired the deposits and several assets after WaMu was seized by the FDIC. JPM is also raising $8B in a common stock offering. Lawmakers continued to work on the bailout plan, which seems to have hit a road block. Congressional leaders are meeting at 11am to work on the plan.
It’s becoming more and more clear to me that several members in Congress do not understand the severity of the situation. It may take the beginning stages of a stock market crash before lawmakers feel enough urgency to get this deal done.
Hi Craig,
Been a long time lurker. I disagree with you about Congress not understanding the severity of the situation. The stock market is not the real economy! And this bailout helps Wall Street far more than Main Street. It does nothing to fix the economy. A stock market crash is inevitable. Delaying it by the bailout is like throwing $700b in a black hole. It is a rotten deal and doing nothing is better than this deal.
http://globaleconomicanalysis.blogspot.com/2008/09/take-back-america.html
Please !!!!!!
Tell me if YOUR REAL ECONOMY IS AFFECTED When Big Banks flet down, people loss thei jobs, real state value drop dramatically, mortages can not be pay and industries ran out of credit. Think and then open your mouse !!!
I think his point is that many of us are coming to realize that there is one set of rules for the ruling elite and another set for the serfs. Just because somebody doesn’t agree with you doesn’t mean that they aren’t thinking.
Precisely! Of course there will be a negative impact of banks collapsing on the real economy. But that is unavoidable. The time to do somehting was when the bankers were going crazy with greed and leverage. It is too late now and this bill is only going to put Americans more in debt ($11.3 trillion and counting) without solving problems in the real economy.
Banks haven’t been lending despite massive “liquidity” that the Fed has been providing. Who is to say that this latest bailout will make any difference when Bear Stearns, Freddie, Fannie, AIG did not make any difference. Banks are not lending money because they are insolvent and want to preserve capital. And their insolvency exceeds the $700 billion. Even if it doesn’t there will be a massive problem of moral hazard and two or tree years down the line the inevitable crash will be even bigger.
Completely agree, the cure is worse than the disease. Any nominal amounts they save will be destroyed and then some through the inflation they will have to create.
Another One!!!!
Before talking nonsense, study the effects and the outcome of the Rubin Plan during Bill Clinton’s Administration to bail out the Mexican and Nafta crisis during the 90′s. America Guaranties not only contained the spread of the problem but even the treasuary ended up making some money on it. They got all the money back before the term (two year instead of 4 !!!!) and make a return of about 10% of the total money exposed .
Please, before acting according to your polical views, think and study!!!!
housing is a bubble and bubbles will not reflate….just like tech stocks they are and will continue to crash
if you think these things have such value, then why didn’t the private market purchase them?
Well, look at the Great Depression. There are a lot of similarities. How about you read some? JKG’s The Great Crash is a brilliant primer.
I ask you a simple question. Wall Street paid out 60 billion in executive bonuses last year. If the banks are so broke why don’t they stop paying these bonuses? Paulson himself got 50 million in 2006. Why should the taxpayer always foot the bill while the fat cats get to keep their loot?
This bill is going to mean significantly higher taxes for the rank and file American. If you are happy with that, go for it.
Agreed!!!
Garo,
Wit all due respect, you are a complete idiot! Wall street runs this country’s economy. Anyone who thinks there is no interconnect is out of tough with reality and is extremely naive.
I see that civility and good manners are still alive in this world.
Hey Craig,
I just wanted to give you a shout out. I took some advice you gave recently during one of your video posts. Long story short, after using your advice I show great success. As a thank you, I’d love to donate to your site. Where can I do that?
Thanks again,
Mike Howard
Hey Mike,
Glad to hear you’ve had some success. The sidebar on the right column of this page has links where you can support StockTock through PayPal. You can make a one-time donation, or a recurring monthly donation.
Appreciate the support!
Happy Trading,
Craig
Craig, for someone who says he’s a technician, you spend an awful lot of your time commenting on fundamentals, news items, etc. You also seem to focus on trying to make what the chart says fit your version of reality. I don’t mean to be critical, but you were interpreting everything yesterday as bullish, talking about retraces ,etc. and yet you didn’t seem to acknowledge that last week’s bounce merely brought us back to even on the week. If you look at a weekly chart instead of a daily chart, you get a completely different picture than the one you’ve been promoting for the past few days, one that suggests we are clearly heading lower, even in the short term. It has nothing to do with the bailout or lack of progress therein, and everything to do with that pesky weekly chart.
I think recently you can’t completely trust the charts other then while day trading cause any news events wil just completely evaporate any kind of Technical Analysis.
So what Craig is doing, is exactly whats needed to be done right now.
Ah now that’s not fair! Craig doesn’t have a positive bias. If anything his bias has been more negative than positive over the past few months. He lets his fundamental bias (positive or negative) cloud his technicals sometimes, but then don’t we all. Important thing is to make money and I’m sure he is making lots.
Technically there was a good case to be made for a bounce with low volume selling and what looked like a bull flag. And we may yet get that bounce if and when this bill passes.
Maybe so, but are you familiar with the term “dead cat bounce”? I hope so, because that’s all it will amount to if this bill passes.
A dead cat bounce can be very tradeable. Make no mistake, my mid to long-term bias is negative. I’m holding a core SDS position and some DGP. Just hedging with some calls.
Last week’s chart was the largest weekly bottoming candle since early 2003. We opened at 1250, closed the week at 1255, and put a tail in all the way to 1133. On a purely technical level, it’s fair to say it could be intrpreted as a short term tradable bottom. We’re obviously still seeing a lot of pain this week, stemming from a continued lack of confidence in the credit market, and that’s not always revealed in the chart. Ex. We have short term paper sitting at nearly 0%. Soft words such as ‘confidence’ are really the grease that keeps this system working. People have to ‘buy into it’ all the same whether they are the elite or the serfs.
I agree with the OP. I’m not a good TA, but I don’t see anything to make me think the charts are bullish.
Every stocktock video starts with “where we trust the charts not opinions”. I’m sorry to say, but I’m hearing a LOT of opinion in the videos lately. What is “It’s becoming more and more clear to me that several members in Congress do not understand the severity of the situation.” – I mean what is THAT if it isn’t just a blanket statement opinion?? The lack of opinion was very refreshing to me before and that was distinctive to this site.
If I need a fundamental bias opinion, I’d rather go to someone who does it 100% like Mish, Rubini, and a bunch of other ones rather than rely on a TA site. No offense to Craig, he’s a great TA, but when it comes to fundamentals I think he’s missing 95% of the picture.
These are times like no other in recent memory. TA is useful when the government stays out of the way, but of late that has not been the case. Therefore, you have to modify the manner in which you trade in the short term to maximize profits and minimize losses. If you are not watching the news and its impact on price action, you will not be on the right side of the trade.
I for one, think that what Craig, his team, and posters on this website are doing is fantastic. It is the only way in which I have found that I can compete with Wall Street, i.e. by allowing my trade ideas to be challenged en masse and prior to my putting on a trade that is destined to fail.
I believe it was Margaret Fuller that said – If you have knowledge, let others light their candles in it.
Thank you Craig for allowing me to light my candle here.
Thanks Phil!
how can you trust the charts when the game is rigged? this is a totally manipulated market by virtue of the fact that short selling of some stocks is prohibited. all bets are off when the market topography has changed. i think craig is correct in using his experience to try to interpret that skewed data. ‘analysis’ often involves looking beneath the surface and arriving at conclusions that may not be so obvious.
Buy from the scared and sell to the greedy.
Go LONG early. This is a gift.
(Agreed.) I’ve mostly been adding to and improving my core holdings, many of which are trading at or near book value, and low/mid single digit price to cash flows ratios.
Hey Craig,
Great Job as usual. Do you ever sleep?
Just when you thought a fascinating couple of weeks could not get more fascinating, it does. The emotions in the Washington and for those following the process are at fever pitch, and the emotions on the street match them. The wide swings on the daily charts over the past couple weeks document the wide swing in emotions. Incredible. But we all also know those famous aphorisms that are trotted out at times like these. “Buy when there is blood in the streets” “Keep your head while everyone else is losing theirs” Buy when everyone else is selling, and sell when everyone else is buying”, etc. I am sure others can add to the list. They are aphorisms, precisely because they are true. The important point is that tremendous opportunities exist during times like this and fortunes have and can be made. The Buffets, Rosses, Dimons, SWF’s and others that HAVE capital are in the cat birds seat and the same is true of us traders. Those with capital will have the ability to take advantage of the opportunities that will appear. They key is TO HAVE CAPITAL! Don’t let the market whipsaw at your capital. I have NO idea where any market or security will be tomorrow, next week or the following month. Can I make educated guesses? Sure. Am I willing to bet the farm on those guesses? No. Risk management is key, especially in this truly historic market. I appreciate you sharing ur ideas and trades with us, and especially appreciate how you scale into positions and how willing you are to re-assess your thoughts on the markets as the data develops. I come to this site because your presentation of the technicals is clear and consise, and the disussion of market events by yourself and other traders is presented in the same fashion. Thanks again for all the hard work. The effort is appreciated.
Just a question — If we take out the lows from last week at 1133, where is the next support? Your chart on RIMM last nite showed it breaking long term support (and it would appear to be decisively so today with huge price move down with heavy volume) I see CSCO, INTC, and MSFT at rather low prices, as with GE, GM, and others. If very long term trend lines are being taken out where are support levels in the big picture? I know some technicians are looking at the 200 month moving average on the decade long charts and some are calling for the market to revisit that trend line in this bear market. I believe the last time the S&P came back to visit the 200 month ma was in 1977. Overdue? I would love to hear your analysis of those longer term charts of the DOW, S & P and NAS if you get a chance to pull some up this weekend.
Thanks again for all the hard work!
Thanks Brian, appreciate the kind words and all your contributions on the site.
Good idea on looking at the long-term charts. I have not calculated the long-term support levels but I will take a shot at it this weekend.
1133 held the trendline from August 2007. Pos divergence on the MACD and RSI daily are very strong. Odds favor we won’t breakdown below the trendline imo. A trip to the 50dma at 1256 is very likely.
‘I know some technicians are looking at the 200 month moving average on the decade long charts and some are calling for the market to revisit that trend line in this bear market.’
- Great point. We’re already there and below for many names. I mentioned this last week. On a valuation basis, this opportunity hasn’t presented itself in a very long time. If the credit market siezed will it go lower? Of course. For true long term investors who have the time to wait for the turn, this is an opportunity to accumulate.
Welcome aboard all the new contributors. Stocktock is becoming more addictive by the week.
i think your right craig i think were going to retest the lows b4 they pass something
UNG is getting smoked pre-market….
Folks,
Stop complaining about Craig’s bias. We are all grown up here. If you can’t take the heat, get out of the kitchen. Every trade has an implicit bias, or else it is just a coin toss.
I am a swing trader, and most of the times, I see Craig to for then against my bias 5-20 times before I close out my trade.
Chill out folks…if you disagree, state your case. Leave the personal insults and jabs aside. We’re here to learn from each other. Like most professional traders, Craig is great but not God. He has been wrong, and he have admitted his mistakes. But that’s normal for traders, if you right 75-90%, you’re pretty dawn good.
If you are a nervous wreck, you are probably betting too much money, and the stress is getting on to you. There’s always opportunities in this market. Take some money out and relax. Chill folks…chill…be cool.
Have a great trading day!!!
It’s great that Craig states his opinions.
Then please stop saying “where we trust charts, not opinions” at the beginning of every video because that’s not true here.
Well, everyone read the charts differently. Hourly charts have a different picture than daily or weekly. He’s a day trader so he’s looking more at 10/15/30 min. or hourly charts. I see a different picture sometimes because I am more concern about daily/weekly/and hourly charts.
As I have said, every trade has an implicit bias.
Craig,
Are you pointing a gun at some people here ordering them to buy or sell? Shame on you!
I added an additional SSO at 1188 pre-market. I woudlnt be surprised if we peirce the 61.8% today if there is no sign of a compromise, this should help squeeze lawmakers.
As an aside, I wouldn’t want to be fielding questions tonight if I’m a candidate for president if a compromise can’t be reached for this crisis. This compromise has to happen. Also the short sell ban on financials is until Oct 2.
Washington mutual – Had this hit the FDIC reseve, it would have been a disaster… We have now had a major Commericial Bank go under. JPM picked the scraps for pennies, just as Barclays took some of the LEH assets after they declared BK. Both Goldman and MS need to significantly increase their reserve requirements to meet commercial bank tier 1 ratios. Look for them to bottom feed, or even pay premiums for some mid size regionals.
Truth be told, JPM was insolvent 2 weeks ago, and pulled a razzle-dazzle with $138B of bad Lehman paper with the help of “friends in high places.”
Hmmm. So interesting that CNBC did not cover this little scam.
http://www.financialsense.com/Market/daily/monday.htm
I’ve read elsewhere that it was actually citi that was the counterparty because that was the exact amount of their debt exposure to lehman. how could the fed loan out $138 B without it showing up on any documents especially after they promised not to use taxpayers money in lehman’s death.
Hey Craig,
I have been reading your site and enjoy your analysis. It has helped my trading immensely. I see that you mostly trade levered etf’s…. is that the case or do you dive into stocks as well? I trade the etf’s but love the volatility of midcaps. Thanks
Hey Bankroll,
Glad you like the site. I trade anything I can get a technical read on without a lot of risk. Sectors trade with more predictability than individual stocks, so I lean towards trading ETFs, but I’ll trade individual stocks as well. Which mid-caps to you watch?
maybe someone is trading on the rumour that, the bill is going to get passed today/this weekend.
Major spread between the ES and cash on the S&P again.
Inverse head and shoulders on the S&P (10 minute) past three days.
Yup, measures up to 1260. Nice.
What neckline do you have? Possibly the 61.8% retracement? This may tank HARD if nothing happens by lunch.
OK… but you can also see a regular head and shoulders forming as well.
STO on 10m back to oversold, so we will go higher on News. Tank up for a break of yesterday’s high, perhaps.
What stochastic settings do you use?
I’m looking at the ES 10-minute Fast Stochastic (3,10) and its around 82 (over bought, not oversold).
FullSTO @ 14,3 on StockCharts Real-time. I’ve noticed your MAs do not match StochCharts at all.
SPX; 10m
========
200sma=1215
50sma=1206.8
20sma=1204
This jives with other programs so perhaps your SoS is using 1m averages on a 10m chart (?).
Tom
Tom,
That’s because I use the S&P E-mini Futures contract (ES). Those moving averages include pre-mkt and after hours trading. SPX only tracks price action between 9:30 and 4:00.
Perhaps, but some major differences. I wouldn’t think they would be so far off from each other, especially the 200.
They often are far from each other because the E-Mini trades 23.5 hours a day. I’ve found these moving averages to be more useful than SPY or SPX.
But, different strokes for different folks.
yeah very true.. there is also a head and hsoulders with 61.8% retracement.. you really want to see volume pick up before 12, like daniel says. My neckline for the inverse hsoulders is around 1224.
GS formed a bearish shooting star on the 15min. on strong volume
if GS goes down, the S&P will follow..
Wait, I don’t see the inverse, I only see the normal H&S, and that’s what I thought you saw as well. I don’t know, I don’t think this deal will happen today. Maybe monday, but not today.
The inverse is before the head and shoulders… we are now making the final V, we have the inverse start at the end of 3 days ago….
the inverse should be happening in the next hour or else it’ll probably become a head and shoulders…
I also drew an scending line under the 10 minute candles that servced as support. If that breaks i’m getting out of my long.
Is it a good time to start to accumulate RIMM? or wait?
Bought calls. Can’t believe I am going long on this POS. Hoping the gap will be filled sooner than later…then I am shorting again.
And this is what makes a market — I bought the Oct 60 puts. Just a gut feel that this is going to have a 6 handle on it in the next few days. End of quarter dumping, possibility of fund liquidations, and the realization that tech is not immune to the downturn. I had puts going into Dell’s earnings a few weeks back and covered them after it gapped down significantly into the low 20′s, only to see it go down another 25 percent over the next few weeks. I always leave money on the table, but with short term to expiry options, I don’t get too greedy. Don’t know what is going to happen here, but I have been punished often enough catching falling knives, and am joining the bandwagon for a quick trade. Good luck to all, either way.
I unloaded all my Jan10 LEAPS too soon this morning. Vix is high, so I am waiting for Vix to come back down into the 18-20 to reload on my LEAPS puts.
I’m not touching that. Breaking long-term trendline.
Thank you for your reply.
McCain attending the debate. This should be favorable that a bi-partisan resolution is not far away.
Divergence between the strong banks and weak banks is apparent in the price action today. Up are WFC, JPM, BAC, and USB; down are NCC, WB and C. While the weak banks jump the most with increased prospects for a rescue plan, but the more I think about it, in any plan, Paulson is going to favor consolidation and will work most favorably with the strongest. Not sure what happens with the big whale, C, but the market priced it under 13 last Thursday. Not involved in any of the financials, but it is interesting to watch the action.
TED deteriorating again
The Bear Market from 1972 to 1974 had S&P500 P/E ratio as low as 7.
We are at 15 now which is historically pretty average. Fundamentals much worse this time around.
hi
This was also true in the very early 80s, but both of these cases had something that we do not, – high inflation , especially wage inflation in the 70′s, along with very high inteterst rates. Why did this happen then? Because of inflation, unions (who had three -four times the membership that they do today) used price esclalators when negotiating wages in their contracts. Bonds became attractive instruments paying into the mid double digits for some high yields corporates. There were viable alternatives to put money. Today, we have very, very low relative inflation. This is one of the factors in whether we end up seeing mid-single digit P/Es in most major stocks. (Notice it didn’t happen in 2002/2003).
Look for realtive inflation. This will be the key in whether we reach those levels.
Two points here:
1) While inflation is lower it is understated by the gubbermint. So while you get money flowing into equities because there aren’t other attractive alternatives, you still get the other negative effects of relatively high real inflation.
2) The E bit in P/E ratios is going to come down hard over the next two years. I think the trailing S&P earnings were $62 as of last quarter. I would look for $40 in 2009-2010.
PS: We all know why lots of things we were expecting didn’t happen in 2002-03. Thanks be to the Greenspam housing bubble.
Very low inflation by official goverment statistics; that to be honest, doesn’t compare with the way inflation was calculated back then. AND rate policy that certainly is feeding to the inflation as is. As non US resident while I’m bit tempted about cheap dollar, the p/e (where ‘e’ will drop still) being this high really scares me away, lot of good european companies with p/e below 10….
Bull flag on GG?
Yea, I like the setup on the daily chart.
SPX
The high from yesterday to todays low has retraced exactly 50% to 1,203.5. The next fib is 61.8% at 1,207
Massive volume just happened on Wachovia. 5.85 million shares traded on a green candle, not a massive one though.
Ah! nothing like going to lunch and getting your sell stop triggered 2 cents below the days high. Still holding 3 SSO from 1207-1213. Will reload one more goign into the weekend if we sell off later to the previous lows of the day.
WB is next to go…
Without govt’ intervention next week, I would agree; however, they will be one of the first to get help, as the FDIC cannot handle much more than regional banks at this point. I think WB is a strong buy. Time will tell. Good luck!!
Buying the 10 calls in the front month when my signals hit, which should be in about 30 minutes. . . Good Luck!!
the game of dominoes will utimately come to end… if Congress doesn’t complete anything over this weekend, expect to see a crazy monday.
i also just went long on oct WB $12.50 calls. a friend of mine who works in IB for WB just went all in the stock, and evidently a lot of others who he works with are doing the same. good enough for me
You bring up a very good point which highlights the real threat to mainstreet. Even a mid-sized regional bank that fails or has the FDIC step in, who doesn’t have a willing private investor, would hit the FDIC reserve very hard. It doesn’t have to exceed it to really cause a panic. IndyMac a few months ago was nearly 10B. There has been a public campaign over the past two weeks or so to stress FDIC = ‘your first 100K is safe’. If the perception is that the FDIC reserve begins to be depleted, it could start a panic run. We’ve already had a muti-billion dollar panic run in the money market funds, because one of them temporarily broke the buck, and WaMu was hit with one over the past week.
I think the government is well aware of this, and here is why we are seeing major finanicials take the weaker palyers for pennies on the dollar. I’ve said this before, in any other time, there would be screams for Anti-Trust, but this is the best alternative in a worsening situation.
I’m probably in the minority in this view, but I’m not sad to see the investment bank-broker model go. Or any other organization that’s allowed to carry 32:1 (BSC, LEH) or even 66:1 (FRE/FNM) levered ratios. Over leverage is the catalyst that magnified the underyling problems the same as it was in1929.
This is my assessment as well and is why I think you can trade the XLF right now, as they understand the urgency and are now getting frank with the Republicans and why a deal will be cut this weekend. This would have been done much quicker if Paulson had given them a plan that was amenable in the first place.
I too am glad to see the over leveraged IB model go. I enjoy your comments and appreciate your sharing your thoughts with those of us that are novices and/or have not been in the game as long as you have.
I think it is finally safe to buy the fear at this point, but watch those fib lines and be ready to go short again post election.
Regards, Phil
To Craig, how long will hold DGP? I just check it but feel that it looks like to have some downside instead of upside. Today it hit weekly MA20 which is falling. Just a reminder. Good luck with your trading and take care!
Thanks. I’m looking to hold this for 3-6 months. I’ll exit if it breaks below its rising 20-day MA.
It’s a positions that I’m scaling into on the way down.
Looks like some buying into the close due to a likely gap-up Monday.
Well my bet on WFC is paying off…
Are u guys buying into close?? Or just sidelines??
Sidelines. Too risky for me.
I got LONG early, as posted, and will hold. You can’t make money on gaps if you’re not in.
I’m in also 3 blocks SSO at 1207-1213. I won’t add more today unless we somehow tumble to a session low in the next 45 minutes.
I’m in SSO @ 52.89 for the weekend.
I’m also holding over the weekend.. But I got in too early yester at 53.50
I can sell now for a small gain, but I think I’m holding over the weekend.
We’ll see how far this rally pushes.. if my gains reach my expectations, then I’ll sell.
I also jumped the boat on AUY today at 9.13 which is the .618 retracement.
It pushed down alot more then expected.. now I’m hoping it doesn’t trigger my stop loss..
Ruben, I started buying some AUY under $9.
I’m seeing a 61.8% retrace at $8.68
Yea sorry.. I meant .50
I wished I waited for the .618 though.
I tried the 50% at 9.11 but I placed the order when it bounced a bit off it..
Let’s hope we catch a bid next week.
Btw. Craig, Thanks for fixing the account..
Glad I can make some posts here again..
AUY is one stock I watch regularly. My other 1/2 position stopped out at 9.65 yesterday. I’m a little hesitant to get back in, but I’ll watch key support at 8.70 & 8.50.
I am playing Goldman sachs both ways.
If it tanks hard, I’ll make a killing.
If it rallies, I’ll offset my losses with my long positions.
*I only trade options.
As a guideline. Buffet’s warrants to buy the common from hsi recent deal are ~115.
Right, but he has 5 years to exercise. Doesn’t mean Goldman won’t go to $70 before it goes back to $115.
You are still betting against buffet and at this point against the market. The easy money is on the long side. I don’t understand trying to fight it.
Agreed. No matter how good you are — If you try to catch every little swing you won’t make big money in this market. Jesse Livermore realized this and so have I. Think about how it messes up your odds.
CNBC reporting (via NY Times):
Wachovia and Citi are in preliminary talks of some sort of business combination.
Look at the closing candle on WB, unbelievable!!!
Have a great weekend everybody.
Papa Bear say that If you take out the Friday/Monday “bail-out” candles, the SPY daily is still showing a downward trend. We may be headed for a double bottom formation or a new low.
I think the action in USO today has helped paint a pretty clear pennant formation. The buying at support has stayed consistent in this triangle formation, while the sell volume has dropped substantially. Breakout on Monday? Any thoughts?
http://img204.imageshack.us/img204/768/usokx3.jpg
Didn’t mean to reply to Hulu, sorry.
Maybe this seems moronic but why doesn’t the fed just open their own fed run bank and supply liquidity to the markets that way? Then everyone gets what they want, markets are liquid again and all of the banks that took on bad risks go under.
Fed has been more than generous with their lending, but they are running out of money to lend. Treasury print and borrow money buy selling gov. bonds, fed don’t have that capacity.