Comments on: Good Reversal Day on Bad News …

By: TrickStar

TrickStar — Mon, 08 Dec 2008 22:31:13 +0000

As I was just relishing the rare opportunity for me to brag about success, I realized that I haven’t traded the volatility in two weeks. Why? Because I haven’t seen a single sign that I could interpret as offering a me solid hypothesis. We’re in no man’s land – but getting close for a short opp, I think.

By: DP

DP — Mon, 08 Dec 2008 22:21:01 +0000

Sometimes it’s nice to just be wrong, specially when you bet against yourself.

By: TrickStar

TrickStar — Mon, 08 Dec 2008 22:17:07 +0000

TrickStar Says:
November 24th, 2008 at 4:32 pm

Last Monday nite on BP, I called for a 500 pt. one day drop in the next five trading days.

While I never got my 500 pts., two days over 400 exceeded my expectations.

On Thursday of last week, I called for the 15%-20% dead cat. As of today, that came true as well.

The beauty of this market is that even a joker like me can get a few right.

Oh, by the way, the equity markets hit bottom at 750 last Thursday. They don’t ring the bell.

Calling it out. 750 was the bottom.

Who do we have to thank? Well, us, the US taxpayer.

750 was the bottom.

By: leftback

leftback — Mon, 08 Dec 2008 18:49:58 +0000

You have to fade these rallies, but not at 3.
Try 3.59 instead.

By: kantie

kantie — Mon, 08 Dec 2008 17:25:40 +0000

You write: ¨Why ? Because given the regularity of bad news this did not catch anyone by surprise and is now most likely discounted.¨

The bad job numbers DID catch the more than 70 economists/analysts Bloomberg and Marketwatch had approached by surprise. The pre-8:30 estimates were around – 350.000 jobs; nobody had estimated even close to the headlined 533.000 job losses. How could it have been discounted?
Also, look at this:
September: initially published – 159.000, later revised to – 284.000 and now revised to – 403.000 !!!!
October: initially – 240.000, now revised to – 320.000, next month revised to ? !!
November: initially – 533.000, next month revised to ? and later on revised to ?
Hence, the Bureau for Lies and Statistics had to increase their initially published number for September by 150%! No economist/analyst had expected such a hugh correction: how could that have been discounted?

On top of that: the market did react negatively: Dow dropped 200 points for the first hours of last Friday.

In addition, you mention an S&P500 haircut of 50%. But do you not agree that the S&P500 high was way over the top? The GDP growth of the last 10 years was fully debt financed, i.e. no growth at all. So perhaps only a more realistic 10% haircut till last Thursday.

Given all this, could it be that helicopter Bernanke is using ¨the second arrow in the FED´s quiver, i.e. the provision of liquidity¨ by buying equities in the hope of giving the market a boost up (which then might run on for a while as people start talking about a rally, and nobody wants to miss out on one)?

By: DP

DP — Mon, 08 Dec 2008 17:09:56 +0000

I suspect there are some hedge fund managers out their rubbing their hands with glee at a chance to fade this at 3pm. I hope I’m wrong and still mostly long (commodities, so having a good day after a very bad week last week), but just don’t believe in these pops anymore. Would much rather see 1% a day for 10 days.

By: Boomer

Boomer — Mon, 08 Dec 2008 16:54:34 +0000

So last week or so you thought if we hit 900 this would be a tradeable rally, think that is still is the case?

By: Chief Tomahawk

Chief Tomahawk — Mon, 08 Dec 2008 15:58:27 +0000

So long SRS! Hellooooooooooooo TBT!

With all of the money which has flowed into the ten year recently, and additional supply coming later this week to feed “Bailout Nation”, etc., equities would just love that money to come back.

By: John Borchers

John Borchers — Mon, 08 Dec 2008 15:47:24 +0000

Easy money.