Wednesday, January 30, 2008

Fed Shmed

So we are all going to sit around all day and wait. That is the feeling I got from an institutional broker yesterday. He said his clients are doing nothing. I guess they have better things to do than make money. I see tons of opportunity in this market, whether long, short, or neutral. It all depends on your style, risk tolerance, and ability to get liquid.

By the way, I'll take the Giants with a 50 basis point cut.

Tuesday, January 29, 2008

Duke and Duke

Buy, Buy, Buy. Please don't ask again what I think the markets doing. When the local news yesterday morning had a "Global Market Sell off" with Europe down 1% as one of the top stories, it reaffirmed my instincts. I strongly subscribe to the shoeshine/cab driver theory. We are poised for a new high this year.

Sunday, January 27, 2008

Lord I was born a Ramblin' Man.....

So Societe General decides to unload a $7 billion loss onto one trader. They say he hacked into their systems and created offsetting trades to make the position look smaller. I executed trades for their prop desks in the past, and would take a beating by them if we were off on a couple of hundred shares. Trust me, they know of every position on every desk at the bank. They have risk controls for how many rolls of toilet paper are used in a week. The only way I see this as a "rouge" trader, would be if he ran up commissions with one of his broker buddies. A couple of thousand euro Bordeaux's on an expense report would be the first place to look.

So back to the market. A classic panic and rally to end the week with some consolidation. Feeling the bottom is near as the public is getting chills of 2001 all over again. Remember fear and greed are the real drivers of financial assets. Right now fear is on top, then greed will take over once the easy money is made at these levels.

Trade long here until April Earnings. Then I would look at shorts as that will draw the public back in.

Wednesday, January 23, 2008

I am the walrus, goo goo ke choo.

I guess that was the reversal. Breadth never went positive so it was hard to close up on the day, but opening down 400 on DJIA and trading up to -50 was a pretty good rally. With the 2yr yield below SPX dividend yield, it is easy to make the case that stocks are cheap. Still in for a bumpy ride, but the trend will soon change and new highs will be in the cards for 2008. A close above 1400 SPX will be an all clear signal.

Wednesday, January 16, 2008

Happiness is a warm gun

"Sell at the sound of trumpets, buy at the sound of cannons." Not sure where that quote comes from but we are under artillery fire now. Looking for a reversal bottom any day soon. Probably today as we are in an expiration week and the dealer community is probably short gamma at these levels.

Thursday, January 10, 2008

Back in the USSR

So I have been a little too premature in picking the bottom of this market. As we bounced of support at 1380 SPX, we have not damaged the weekly chart too bad. A close above 1435-1440 would be the springboard to a nice rally. Still waiting for those mutual fund flows to come in.