Look Out Below
By Barry Ritholtz - August 17th, 2009, 6:57AM
Today we will get a real test for whether the recent pullback is merely a buying opportunity, or the start of something more serious.
- Shanghai shares fall the most in 9 months, hitting a 2-month low;
- Nikkei Index fell 3.1%;
- HK shares post biggest drop in 4-½ months;
- Hang Seng falls 3.6%;
- Oil, coal, metals stocks hit by lower commodity prices;
- Singapore dropped 3.2%.
Here is what the Shanghai Index looked like prior to today’s fall:
chart courtesy of Investech
US Futures are down significantly:
Asian bourses fall:
De.li.cious
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August 17th, 2009 at 7:15 am
Nikkei down 3%, Japan GDP up 3.7%… What Gives?
http://finance.yahoo.com/news/Japans-economy-rebounds-in-2Q-apf-2340371503.html?x=0&sec=topStories&pos=2&asset=&ccode=
If the USA economy grew by 3.7%, I don’t think the S&P would be down.
MontyHigh
August 17th, 2009 at 7:18 am
To me, this looks like a couple of things. Both have in common that the fall in everything at the same time means that a coordinated worls wide effort to drain central bank injected is beginning.
1) The Fed has cajoled the rest of the central banks to help lower rates one more time to boost housing by crashing not only the US stock market, but all markets everywhere in everything simultaneously. This, probably. is not, the ‘big one’. It’s just the prelude to the last pump before excessive central bank liquidity is removed world wide.
2) It seems ludicrous for the Fed to pull the rug out one last time in a terminal way. This is only a ‘last call’. The S&P will drop to maybe 850. We will see one last pump, and then, late this year, the liquidity driven aspects of our newest asset bubble will be removed. At that point, the bets for a bottom will be worth making.
August 17th, 2009 at 7:31 am
Well, maybe the problem is we should start a cash for clunkers program to jump start the industry…what could go wrong with that?
http://www.foxnews.com/politics/2009/08/16/auto-dealers-paid-just-percent-clunkers-claims-congressman-says/?test=latestnews
Auto Dealers Paid for Just 2 Percent of ‘Clunkers’ Claims, Congressman Says
‘Rep. Joe Sestak says only 2 percent of claims have been paid and that four of every five applications have been “rejected for minor oversight.” ‘
…..But when the recession is over, our GDP will have a substantial pop…and people are just lining up early, right…er…
http://www.hussmanfunds.com/wmc/wmc090817.htm
“One of the things to notice immediately is that because of demographics and other factors, projected 10-year growth in potential GDP has never been lower. This is not based on credit conditions or other prevailing concerns related to the recent economic downturn. Rather, it is a structural feature of the U.S. economy here, and has important implications for the sort of economic growth we should expect in the decade ahead.”
Well, don’t worry, just take your kids out tonight and have a good meal. Surely spending patterns will allow eating out on a frequent basis…er…
http://www.usatoday.com/money/industries/food/2009-08-16-restaurants-kids-eat-free-deals_N.htm?loc=interstitialskip
By Bruce Horovitz, USA TODAY
The battered restaurant industry is about to go wide on a risky tactic to nudge cash-strapped parents to take the family out for grub: Kids eat free.
Monday, IHOP will unveil plans to offer free kids meals seven nights a week for the next month.
IHOP’s move, unprecedented by a national restaurant chain, is another signal of just how tough times are in the $566 billion restaurant industry. Restaurant operators have reported customer traffic declines for a staggering 22 consecutive months, the National Restaurant Association reports. Families are staying home: Visits from families with kids were down 5% for the year ended in June, NPD Group says.
August 17th, 2009 at 7:46 am
This little “rumble” seems a bit more serious and different than the others….
August 17th, 2009 at 8:14 am
It does seem more serious. Fear of the retailers and consumer. James Stack reiterated his February new bull market call on Friday, now undermined by his charting.
The Fed and the Treasury are at the end of the line sooner or later their balloon starts to leak and gravity will take hold. To mix metaphors, the shaky canal of New Orleans couldn’t handle the liquidity pumped in. Without a sound economic structure, liquidity will seek a lower level.
Next program will be cash for equities; or did they do that already?
August 17th, 2009 at 8:14 am
I agree, AT, looking a little bit more serious this morning. Those that purchased FXP and ZSL last week will get a little reward this morning.
I think all the economic news that comes out in the next two months will be secondary to information about the consumer including that lagging indicator unemployment. For this to be a buying opportunity the consumer has to come back, (see: go into more debt).
August 17th, 2009 at 8:14 am
take a look at Gold this morning as well.
August 17th, 2009 at 8:15 am
May be too big even for GS to stem.
August 17th, 2009 at 8:23 am
Which brings a related question:
Have all the allegations about HFT and manipulation, combined with a migration of free capital to other markets which have looked more promising, pushed the US stock markets into either an equal or even following status in influencing the rest of the world? I don’t know the relative sizes, but could it be that the rally here has been partially or wholly a result of following the near doubling bubble in the Chinese other emerging markets?
August 17th, 2009 at 8:23 am
IMO, what we are seeing now is a direct result of the decision made by the Chinese government about 10 days ago to pull back on additional domestic lending in the Chinese markets. In other words, the Chinese government responsibly took away the punch bowl after their equity markets became frothy. They are trying to stabilize their markets, protect from run-away growth & creating their own bubble.
(Once upon a time, our Federal Reserve did the same thing before it became so politically connected to the fat-cats on Wall Street and in DC.)
However, in this case I think it is a China/US power-play. Like others, I am reading this morning that the Chinese are considering the purchase of Mortgages in the US. Very interesting. Hum…..an under-water mortgage which is tied to a piece of real-estate in the United States. To China, that probably looks pretty good compared to holding a bunch of Treasury bonds, which are tied to the promises of a tax cheat.
China maybe splitting it obligations of the financial needs at home versus the market opportunities presented by crashing real-estate markets here. I think Geithner went begging for help from the Chinese and maybe got it in the form of additional financing. I also read this weekend that the PPIP is now being bounced around again. Two weeks ago, everyone was saying it was dead.
August 17th, 2009 at 8:35 am
Game over..correction came earlier than expected.
August 17th, 2009 at 8:36 am
BG:
I am not sure if I would call what Chinese government is doing responsible. They tried to re-inflate the asset bubble by increasing lending by almost an order of magnitude. Things got way out of hand and now they are trying to put the genie back in the bottle.
August 17th, 2009 at 8:43 am
BG:
Well, the TPIP or whatever the hell it’s called is no great bargain for us. So, the Chinese are only being smart in participating. They certainly have plenty of $’s to play with and make Geithner not look so stupid.
As to the Chinese bubble pricking, it seems they may already have their own bubble, not only in stocks, but real estate and commodities, and they are like the Fed of the 1920′s where they feared any removal of the punch bowl might have been fatal. It is possible that the Fed of the 1920′s was right.
OTOH, this might just be like the early part of the great crash, where hikes in the discount rate were counteracted by private lending. By all accounts, there are two camps in the Chinese government fighting it out at the moment, the bubblers and the anti-bubblers. The bubblers may do some end running to try to reflate the bubble and this may not be a straight down event.
Of course, I’m wrong a lot :)
August 17th, 2009 at 8:44 am
Not good for the Chinese since a sustained correction this early threatens the hallowed 8% GDP target and increases the chances they redouble the credit.
Panda Put by October? Not so Red?….
August 17th, 2009 at 8:47 am
Yeah, kinda like we did, huh.
The US has a different set of problems that does the Chinese. The Chinese are going to do what is best for the Chinese markets. They don’t owe us a damn thing. Their markets are not saddled down with debt rot from the last 25 years and as a result their stimulus worked ~ all too well. Now, they are unwinding that stimulus. They are now doing the things we used to do.
The Chinese are now doing two things: moderating their markets and investing in areas outside China (i.e. US residential/commercial real-estate) offerring superior returns. They are doing the things that are in the best interest of the China. We are ones who are fucked and only have our own stupid selves to blame. We exploited opportunities of the past and the past is now over! Now, we must deal with it!!
August 17th, 2009 at 8:50 am
emmanuel:
That’s why I think we may see some swings in policy by the Chinese over the near term as the two camps battle it out and the more conservative camp gets panicked by market breaks like this, thus occasionally loosening the reins in an attempt to generate the mythical soft landing. I think most everyone here agrees that hubris is not limited to western bankers.
Keep an eye on http://www.mpettis.com for now. He is in Bejing and some of his students and friends have some info on what’s really going on.
August 17th, 2009 at 8:58 am
I’m not buying this as anything more than a correction. It may be a correction of sizeable magnitude however we need another run up after some volatility to suck in the rest of the morons. It almost seems too predictable but I expect things to play out like last year – fall volatility on fear, Christmas recovery on hope, winter crash on reality. This will probably bring about more stimulus talk and the beginning of the eventual demise of the USD. The next rally market/commodity upswing (spring) should result in stagflation and an uprising by the common people. Fear of fall elections and political survival might actually inspire “real” change – if only for the campaigning period.
August 17th, 2009 at 8:58 am
Interesting new post by Michael Pettis on why treasuries are rising: they are being bought by American savers.
August 17th, 2009 at 9:01 am
well, just got my question from last week answered, TALF has been extended, and obviously there are major problems with CRE based on how long they extended focus there.
August 17th, 2009 at 9:01 am
@ben22
GLD will continue to splutter as Dollar gains strength. Last Friday I noted the bearish Harami on the weekly SPX candle chart. This week we test 960.
@BG
Agree, I think most economies in Developed (Japan, Europe, Singapore etc) and Developing countries (Brazil, India, China) will recover quicker than U.S. We will be sitting on this “fake recovery” for quite some time.
August 17th, 2009 at 9:08 am
@Ben 22:
Ben, if you haven’t had a chance to read the Statistical Recovery, Part II, in the Think Tank…I mentioned this last Friday, but the foreclosure rate predictions look to me as though it will be nearly impossible to get this ship off the ground before 2011 at the very earliest…it is worth a look.
B in T
August 17th, 2009 at 9:08 am
@Mike in Nola:
Yeah, I’m following Pettis more now that the government has snatched Brad Setser away.
Another angle that will help the bubble camp is that most of the Party leadership’s family members are on the boards of the top Chinese companies (the media isn’t allowed to mentions this, I think). I’m guessing 3 months of pain in the ol’ retirement portfolio is gonna bring a lot of phonecalls to the Premier’s Office. Can’t let the kids go po’.
August 17th, 2009 at 9:11 am
The best hope that we have for this *not* being “The Big One” is the plethora of bloggers and pundits either proclaiming or wondering that it is. Maybe a bit of a pullback, to be followed by another rally, but I doubt that things will get “too exciting”. (especially for the large amount of money market cash)
I am not a proponent of the coming recovery — either local or global, due to the shrinkage in global trade. No way that a recovery can happen without increased levels of business activity, and financial trading activity is not the same thing as business activity.
I think that it is muddle-through for now. Next month I may change my tune.
August 17th, 2009 at 9:39 am
If you’re holding VERY LARGE positions that have been weighted towards equities for the bulk of ’09…
…and the equity market has rallied over 50% in a straight line for 5 1/2 months now…
…and the DOLLAR is making increasingly stronger signals of at least an intermediate bottom (which may last for 6-9 months)…
If you had ONE TRADE, what do you think you’d be inclined to sell & what do you think you’d be inclined to buy?
Note: The question IS NOT for day traders…& furthermore I don’t need an answer, the question is rhetorical…
August 17th, 2009 at 9:43 am
I think DH gets it right. The Fed knows it has to crash the stock markets in order that its money-printing orgy, particularly that part directed at residential real estate, can continue to succeed at reflating prices. Unfortunately for the Chinese, juicing treasuries will likely be at the expense of the dollar, which so long as they stay narrow-range pegged, means their economy continues to bubble. The Chinese need a mild correction now or they’re gonna get a severe one later.
Of course, they could just quit out-sourcing their monetary policy to the US Federal Reserve, and allow a much wider float, or abandon the peg altogether. IMO, it would help cure a whole lot of what ails both economies.
August 17th, 2009 at 9:45 am
@BNT,
That letter is sitting in my inbox but I have yet to read it. Those OTB letters have been really good this year, maybe since Mauldin moved out of Rangers stadium he can focus more in the summer time. Thanks for the heads up.
Seemed like this morning and late last night all the Bloom and CNBC interviews were primarily the “buy the dip crowd”…. were they talking treasuries? lol.
Probably going to take some recent purchases gains off the table here this morning. 4 is a long way away right now.
August 17th, 2009 at 9:47 am
The Fed knows it has to crash the stock markets in order that its money-printing orgy, particularly that part directed at residential real estate, can continue to succeed at reflating prices
If they don’t “crash it just right” then there will be no support to continue on this path of reflation and therefore we will finally feel the effects of credit deflation, when it really takes hold, they will not be able to print fast enough. So far, it looks like this is what the consumer wants. Does anyone want to bet on the Fed making the exactly correct moves over the next 6-7 months. They are the group, after all, that got blindsided by round 1.
August 17th, 2009 at 9:51 am
Watch SPX 969… you will have your answer.
Although a bit remiss at having taken the short risk trade off on Friday to take profits, I-Man is content to watch this one play out a bit.
My instinct of course is to channel CV and encourage new shorts to “Be Cool.” We dont want to all go piling in and be fuel for the face ripper squeeze. Actually, I am a bit inclined to wait for a pivot reversal at 969ish and possibly get long, because the squeeze is still a high probability.
I might be enticed to take a day/swing trade shot at SDS on a successful retest of gap support at 47… you know I like my gap support trades…. but only if it retests this morning. If it keeps running higher I wont, if it breaks below 47 when the 10:30 crew shows up I wont.
The setup would be long SDS, stop a little below this mornings open at 46.80 or so. Only on a successful retest of gap support.
August 17th, 2009 at 10:01 am
@I-Man
CV is content to let the shorts ride a bit more because the move has the look of a developing mini 5 wave to it…
I’m more content to lower the “stop out” point from 1014 to 1008 on the other side (at which point at least A LITTLE would be made on that trade)…
In other news…the UUP took out 23.63…Now if it takes out 23.73, I’ll be VERY happy because it would take out the recent high & AT THE SAME TIME, break out of the downward trendline since last March…
August 17th, 2009 at 10:06 am
I would really like to see the VIX hold up above the upper trendline of the bearish channel (daily TF) before getting fully committed on the short side. We’ll call it 27.
August 17th, 2009 at 10:09 am
LB has covered the rest of the shorts but retained a small FXP position with a tight stop. It will certainly be fun to watch, it’s nice to be right, but LB is happy to exit temporarily with a wheelbarrow filled with cash.
The € will probably find support at $1,40 so we are not going to push the commodity shorts here. This move has worked out much as many here predicted, and we are watching the $ from here. SPX 975 area is the near-term support of interest for now, maybe only a weak knee-jerk rally off the better of these dismal retail earnings reports.
Might be fun to see last week’s bear-baitin’ tauntin’ bulls return later this week…
August 17th, 2009 at 10:10 am
I wonder if the Fall in the fall part deux is here and a bit early. Feels a bit “fallish” outside this morning. This certainly feels different to me. Anecdotally, my recent discussion with the wife about the goings on at her company and others with whom I’ve spoken tells me that sentiment is turning. Fear is ratcheting up again. Brown shoots indeed..
August 17th, 2009 at 10:13 am
CV is also welcoming the “Johnny come latelies” to the Jan 2010 “out of the money” TLT calls…
2nd time in the past 2 weeks CV has caught a DOUBLE on that…
August 17th, 2009 at 10:16 am
2 “months”, I mean
August 17th, 2009 at 10:23 am
EUR:USD will probably find support around 1.4025-1.4033 or so, and SPX 975 should hold for now. This last swing was very profitable, and made up for some damage inflicted by prior squeezes.
LB is thinking that profit-taking at the long end makes TBT the trade du jour…. nice work on TLT calls, CV.
August 17th, 2009 at 10:26 am
It would be an opportune time for a global currency crisis to enter stage left…
Lot of rumblings in Eastern Europe that be a cause for concern, not really my area of expertise.
I found it downright laughable the coincidental announcement of the TALF extension this morning as futures were tanking…
Incidentally, that is what got me snooping around for impending global crises.
August 17th, 2009 at 10:32 am
Manhattanguy is glad to have sold his sugar trade last Friday. But added some CZZ in the morning on a 10% correction with tight stops ofcourse. Sold half of $DUG as well (was holding for a while).
Just doing LB, CV impression :)
August 17th, 2009 at 10:33 am
” Does anyone want to bet on the Fed making the exactly correct moves over the next 6-7 months.”
No. In fact, I’ll go just the opposite, and bet that whatever they do will be just what shouldn’t be done to promote long-term economic viability. They are spinning in place, chasing their own financial tails, while the real economy slowly slips away. The Fed is as hubristically confident that monetary mischief can change the world as Goldman Sachs is that the world exists for their pleasure.
August 17th, 2009 at 10:33 am
This could be the beginning of the big one. As I mentioned on Fri the Chinese market was below 50day MA with support still far far below.
OTOH, this is OpEx week. So big moves are not all the surprising.
OTOH, pundits are advertising to “buy on dips” on TV. That’s encouraging as a bear.
Levels I am watching for SP500 as per Yahoo Finance.
21day MA : 987
50day MA : 946
200day MA : 877
Watching oil and copper as well. I believe a burst in copper bubble will precede a larger crash in SP500.
August 17th, 2009 at 10:35 am
Time for another Stimulus program:
Democrats, realizing the success of the President’s “Cash For Clunkers” rebate program, have revamped a major portion of their National Health Care Plan.
President Obama, Speaker Pelosi, and Sen. Reed are expected to make this major announcement at a joint news conference later this week. I have obtained an advanced copy of the proposal which is named….
“CASH FOR CODGERS” And It Works Like This…
Couples wishing to access health care funds in order to pay for the delivery of a child will be required to turn in one old person. The amount the government grants them will be fixed according to a sliding scale. Older and more prescription dependent ‘codgers’ will garner the highest amounts.
Special “Bonuses” will be paid for those submitting codgers in targeted groups, such as smokers, alcohol drinkers, persons 10 pounds over their government prescribed weight, and any member of the Republican Party.
Smaller bonuses will be given for ‘codgers’ who consume beef, soda, fried foods, potato chips, lattes, whole milk, dairy products, bacon, Brussels sprouts, or Girl Scout Cookies.
All ‘codgers’ will be rendered totally useless via toxic injection. This will insure that they are not secretly resold or their body parts harvested to keep other ‘codgers’ in repair.
August 17th, 2009 at 10:41 am
Put a toe into TBT. Those who follow LB will know that this is a hedge against our Treasury longs. The strategy for the rest of the day is to put one’s feet up and wait for the pump.
August 17th, 2009 at 10:42 am
Black lady on CNBC is telling us what’s going up today! I think we should buy those.
Does she do the opposite on up days?
August 17th, 2009 at 10:43 am
I-man says:
I found it downright laughable the coincidental announcement of the TALF extension this morning as futures were tanking…
You and me both. I was wondering last week how long they would wait to take action on this, it seemed almost certain if we tanked and they waited until it was supposed to stop in October it would have been too late. I’m thinking we can see what panic mode they are in still, China tanks and then we get this early this morning.
They are throwing wet noodles at the wall to see what sticks. I don’t think they have a damn clue. The Fed only reacts, another example.
August 17th, 2009 at 10:45 am
@Mannwich 10:10 am
“I wonder if the Fall in the fall part deux is here and a bit early.”
same thought i’ve been entertaining this summer, many want to get a jump on red october?
friday’s nibbles on tza and zsl have been tasty
August 17th, 2009 at 10:49 am
@LB
I’m inclined to let at least half of the OTM TLT calls ride…
The last batch I bought at 40 cents there was another purchase of 6,500 contracts the same day…
I’m happy taking a 150% gain on half (they’re selling for a buck today), but those 6,500 contracts have not been closed out yet (to my knowledge)…
August 17th, 2009 at 10:51 am
Curmudgeon said:
“They are spinning in place, chasing their own financial tails, while the real economy slowly slips away. The Fed is as hubristically confident that monetary mischief can change the world as Goldman Sachs is that the world exists for their pleasure.”
So true. And maddening to watch unfold. My attitude now is one of resignation. Well past the anger state now. The Fed fiddles while BananAmerica burns. Heckuva job, BananaBen.
August 17th, 2009 at 10:51 am
@ben22
Your ZSL calls must be having a PHI-ne day! :-)
August 17th, 2009 at 10:52 am
@Manny
karen “spins in place” all the time (with Hercules)…I doubt she’s chasing her tail tho…
karen for Fed Chief!
August 17th, 2009 at 10:56 am
http://www.bloomberg.com/apps/news?pid=20601085&sid=aGIATunT3Aao
Pension Funds Pare Stocks, Ignoring Economic Rebound (Update2)
“Aug. 17 (Bloomberg) — The world’s biggest pension funds lost confidence in stocks as the best long-term investment, cutting holdings or leaving them unchanged during the steepest rally since the 1930s.
Funds overseeing money for California teachers and public workers, Dutch government retirees and South Korean private- sector employees reduced their target weightings for equities this year, data compiled by Bloomberg show. The rest of the 10 largest kept them the same. U.K. pensions have cut stock allocations to the lowest since 1974, according to Citigroup Inc. Managers handling Oxford and Cambridge University professors’ assets have been selling shares as the MSCI World Index posted a five-month, 51 percent rally.
“Given the storm in financial markets that we have seen, the name of the game is risk management,” said Dirk Popielas, head of the Pension Advisory Group at JPMorgan Chase & Co. in Frankfurt. “The majority of pension funds have not finished taking risk off their portfolios. Some have not even started.”
August 17th, 2009 at 10:58 am
market forecast:
… cloudy, with a chance of anvils.
August 17th, 2009 at 11:03 am
Cvienne, I want to be the Crude Czar… looking at the mini dbl top in crude last week (second week of June hit 73.90, second week of august hit 73.92, look at $wtic candles on a weekly..) DTO has been painful but worth it every time so far.. looking to part with some dxd around 40.55 and fxp, still holding for now. SRS and FAZ still ugly for me. Betting LB was a few points early on TBT, btw.. looks like 46 will be tested again..
August 17th, 2009 at 11:06 am
@I-man:
http://ftalphaville.ft.com/blog/2009/06/02/56497/waiting-for-latvia-to-devalue/?source=rss
Latvia has to choose between deflation and devaluation. Since its debts (specifically mortgages) are denominated in euros and its economy is in the crapper, it may default on its debts.
default on debts -> bye-bye Sweden? -> contagion spreads to European banks?
August 17th, 2009 at 11:07 am
@karen
I don’t usually like to go against lefty, but I think you’re right on TBT (being early)…It was just a small “hedgie” I think tho…
I’m sure I closed the half of the TLT calls I was holding early (even with a 150% gain)…It already looks like its rounding 2nd base & heading for a triple…
I want to raise some cash and play around tho…
August 17th, 2009 at 11:08 am
cvienne,
I’m 3/3 on shorting silver this year for nice gains. I know everyone wants to play stocks but that market has been far more predictable over the last couple of months. My dollar long via UUP is actually now in the money as well if I use my average basis. My accountant is going to love my transaction details this year. I can envision my fee increasing…
August 17th, 2009 at 11:09 am
LB has been known to be a few points early.
Faster than Usain Bolt sometimes, well, OK – no-one is THAT fast. Never seen anything like it. Awesome.
“Managers handling Oxford and Cambridge University professors’ assets”
Those guys would not be dummies, Bruce. Wonder if their US counterparts are that smart? Hahvahd?
“The majority of pension funds have not finished taking risk off their portfolios. Some have not even started.”
LB has been talking about this for months, and this is why it could be a VERY Red October™.
August 17th, 2009 at 11:12 am
An incredibly reliable contrary indicator:
Aug. 17 (Bloomberg) — The U.S. recession is ending “right now,” said Abby Joseph Cohen, a senior investment strategist at Goldman Sachs Group Inc.
The economy may grow by 3 percent in the next couple of quarters and expand by 1.5 percent to 2 percent next year, Cohen said. While consumer spending is likely to rise, it probably won’t increase as fast as at the end of prior periods when the U.S. was emerging from a recession, she said. ”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0sLU2hOmYZ0
August 17th, 2009 at 11:21 am
@LB:
Well, B in T’s pension fund has been in callable cd’s all the way down and for the pop since March..But with a little luck, this fund will be cashed out for 2010 and B in T will join the grasshopper class..(one reason he has been Sooooooo conservative…)
I love the Abby Joesph Cohen post, too…
August 17th, 2009 at 11:22 am
Please, no one fall out of your chair upon reading this “surprising” news item: BofA credit card defaults edge higher in July http://news.ino.com/headlines/?newsid=68965478174791
August 17th, 2009 at 11:23 am
agree with TBT retesting the 46 range. I am watching TMV closely at 70. My sugar trade CZZ got stopped out. Will enter later in the afternoon after another wave down. $FUQI looks like a great buying opportunity as well.
August 17th, 2009 at 11:26 am
@karen: regarding credit card default rate – I am surprised to see COF still holding up very well…thanks to Mr Lampert and Johnson.
Anyone watching VIX?
August 17th, 2009 at 11:26 am
@karen: Capital One’s defaults edged higher as well. What’s in your wallet?
August 17th, 2009 at 11:27 am
ben22:
be thankful you have need of an accountant increasing his fee
Interesting video someone sent me this morning. Shot in my hometown. Obamatrons might want to give it a miss:
http://www.youtube.com/watch?v=ivpshw2yn4g
Love Abbey, too. Sorta like Dennis, but w/o the nastiness.
August 17th, 2009 at 11:33 am
@karen
I have a BofA credit card…No balance, don’t use it (except for the occasional internet purchase)…But I do get the monthly paper statements…Mostly I just file them away but I happened to open the one this past month and noticed that the interest rate had jumped from 9% to 27% out of the blue…
Imagine if that is happening to people with BALANCES…
August 17th, 2009 at 11:35 am
cof hit a brick ceiling on friday and vix is done being 24.. the market may actually attempt to reflect fundamentals this week.. what a novel prospect.
August 17th, 2009 at 11:36 am
@cvienne: It IS happening and I’m guessing A LOT of people are seeing that and just not paying as a way to stick it back at them. What are the cc companies going to do – - repossess that dinner and trip? Ah, the ironies…..
August 17th, 2009 at 11:36 am
Re: AJC
So Goldman Sachs is hoping to play the “buy the dip” chatter…
Which officially means we’re in “sell the rip” territory from here forward…
August 17th, 2009 at 11:37 am
Interesting morning folks. Will be fascinating to see if this is “a” correction or “the” correction. Question – how does one (if at all) determine the difference?
August 17th, 2009 at 11:39 am
@Manny
What I’ve heard also is that the “cash advance” aspects that used to be available with these cards is either no longer available (or EXTREMELY limited)…
I guess they don’t want people writing themselves big checks and troddling off to Mexico! :-)
August 17th, 2009 at 11:39 am
@Karen: Re: TBT. Hope you’re not suggesting that LB might be PREMATURE? SSO, for a bounce anyone?
August 17th, 2009 at 11:40 am
Thor:
It’s like the end of recession; you don’t know til you see it in the rear view mirror.
August 17th, 2009 at 11:40 am
@Thor
“Question – how does one (if at all) determine the difference?”
We’ll tell you in six months! :-)
August 17th, 2009 at 11:41 am
I-Man just bought the dip.
Long SSO @ 29.74… Stop @ 29.54
Not married to it by any means, but if it pays me… WTF?
August 17th, 2009 at 11:41 am
@cvienne
I think the rates only went up for people who didn’t use the cards.
They want you to cancel it and save on administrative cost.
August 17th, 2009 at 11:42 am
LOL Leftback…
Just saw your 11:39. What are we? Clones?
:)
August 17th, 2009 at 11:44 am
@LB
“SSO, for a bounce anyone?”
Not for me…I’m only selling RIPS now, no dip buying (and “stops” on short positions still in place are getting moved lower)…
Probably the right spot for a bounce tho…
August 17th, 2009 at 11:45 am
@beaufor
Maybe…But none of my other cards (AMEX) changed anything…
August 17th, 2009 at 11:48 am
If the economy were as strong as some of these pundits say it is, the fed would have REACTED and raised interest rates already, maybe just .25 or so but they would have raised imo. Instead we got an extension of TALF this morning. All the people who have been consistently wrong about all of this are getting a moment in the sun right now due to the countertrend rally in the stock market. In the fullness of time, they will look like fools all over again.
August 17th, 2009 at 11:50 am
@cvienne: I got notices from AMEX a couple of weeks ago raising my rates and late fees and called them to question it. The “supervisor” claimed they were doing this for all customers. Gee, maybe he lied to me? He would never do that, would he? I think the safe assumption now in our economy when doing business with any big corporate entity is that you’re being lied to until proven otherwise. What a most excellent and sustainable model for the future.
August 17th, 2009 at 11:52 am
@ben22: No problem though. Those “fools” will just blame Obama or some other person/extraneous factor/event. There are no penalties for the royals even if they are disastrously wrong.
Love live The Tyranny of the Incompetent.
August 17th, 2009 at 11:58 am
@Thor – “Will be fascinating to see if this is “a” correction or “the” correction. Question – how does one (if at all) determine the difference?”
Assuming you don’t know a whole lot about technical analysis, if you watch charts, there will be areas of possible support on the way down. Sources of support include 1) Chart areas that provided resistance going up 2) important moving average lines and 3) other traditional support/resistance areas such as determined by Fibanacci ratios (the top of this last uptrend corresponded with a failed attempt at an important Fib ratio).
Depending upon where you expect the difference to be between “a” correction and “the” correction, look to see how the market responds when it gets to these possible/potential support areas. If it blows right through the early ones, we could be in for “the” correction. If instead various support levels kick in and provide a break on downward momentum leading to a reversal before a whole lot of damage is done (basically enough to move the things away from “overbought” status on other indicators), then it will merely be “a” correction.
The big areas to keep an eye on is S&P 950ish and S&P 880. The latter was a HUGE resistance area on the way up.
August 17th, 2009 at 12:00 pm
@Mannwich,
Sadly, that’s probably exactly what will happen. I long for the day that people like Don Luskin will not be on tv claiming they called the bottom to the day for clients.
August 17th, 2009 at 12:01 pm
I haven’t had any changes to my Amex card in the last year however, we have a biz american express card and there have been plenty of terms changes on that card. plenty.
August 17th, 2009 at 12:02 pm
@Mannwich
I have the creepy feeling they are not fools at all judging by the rapidity of bonus distribution when the bailouts came.
And executives dumping their shares?
now, why would you do that, maybe because you can tell it’s not gonna work
August 17th, 2009 at 12:05 pm
I agree with beaufor – I carried a balance on my Amex (for SPG points) up until January when they arbitrarily cut my credit limit to within 500 bucks of the amount I had on the card. I wrote a check for the balance the same day and closed the card. M best friend also had his limits changed and his interest rate go up – he carried a very low balance.
I think they’re trying to get rid of the customers who aren’t making them enough money.
August 17th, 2009 at 12:12 pm
Wonder where E2C is or if he’s coming back. Now would be a very good time for him to rub last Friday in my face. I’d happily take the beating too! :-)
August 17th, 2009 at 12:12 pm
I’m going to make a guess here that whatever bounce we get isn’t going to extend past 988-989…
I keep remembering that phenomenon at the turn back in March that the rally wouldn’t let anybody in…
Likewise, the selloff might not let anyone out…
I’m moving my stops down to 990 from 1008 (which would still be 6% profitable)…We’ll see what happens…
August 17th, 2009 at 12:16 pm
Stopped using credit card 2 years ago. But I see a purge coming in cc offerings. We have way too many credit cards in the market.
The Fall correction we were anticipating may have started earlier. But once the correction (100 points on S&P) is over, we might bounce back sharply. I am predicting S&P 1100 by year end.
August 17th, 2009 at 12:20 pm
@Andy T @ ben22
Both of you know that $23.73 is an important level to break for dollar bulls…
FYI…There was a 500 contract purchase on the UUP Sept 24 calls this morning…On Friday it was pricing in a 20-1 shot…Odds are now 4-1…
The thing is too…Taking out 23.73 probably makes Prechter’s call right…I might even add a little if it can inch its way down to $23.57…
August 17th, 2009 at 12:21 pm
@manhattanguy
I can’t see making 1,000 if the dollar stays bullish…
August 17th, 2009 at 12:23 pm
@manhattanguy
I use the AMEX card because I get 1% back on all purchases…I figure, why the hell not?
August 17th, 2009 at 12:25 pm
@cv
I said 1100 by year end. We will see a rally later this year.
Re Amex card: I get 1% from my citibank debit card. Why use a credit card when I can use my debit card and get the same benefits ehh? Only time I am forced to use my credit card is when I rent a car.
August 17th, 2009 at 12:27 pm
@manhattanguy:
If you have a Schwab account, you get 2% back on everything with a Schwab credit card…not just gas, hotels, etc…
August 17th, 2009 at 12:29 pm
sorry no credit card for me. Will never use it except when I am forced to. I am happy with my debit card.
August 17th, 2009 at 12:31 pm
@manhattanguy
261.8% of today’s low vs. the top would be 914-915…So I’m with your “100 point drop” call (about a 10% correction)…
I’d buy into to seeing bounce there, but being that we’d then be UNDER the 233 day MA, I’d be looking for all kinds of overhead resistance there…
So for me personally, I wouldn’t be willing to make that aggressive of a call until I was able to “feel” the landscape at that moment…Some of it might depend on HOW FAST we might get to 914…
August 17th, 2009 at 12:40 pm
@manhattanguy
BTW – I’d have us hitting 914-915 (maybe 919 is the number) around the week after Labor Day (9/16 to be exact)…
If that happens, it “may” set up a H&S off of 919 (so that “could” be a catalyst for your 1,100 call)…
That’s 3 chess moves ahead, but all things considered, it’s too early to call at this point…
August 17th, 2009 at 12:42 pm
…oh and to GOLDBUGS out there…
Things ain’t lookin’ too hot…
August 17th, 2009 at 12:46 pm
Re: CC and rates. I have a Chase card from way back that I don’t carry a balance on (no cc balance carried on any card) but used for a while for 2% cash back rewards. No rate raise on it at all. Still at the same rate since it actually went down a point back in Nov 08 (I just looked back to see what the rates had done since I don’t usually pay any attention). No rate raises on my USAA cards either in the last year. And the Pen Fed Credit Union card I currently use (5% back on gas, 2% back on groceries, 1% back all else) hasn’t changed since I got it in March.
All are apparently are prime + something. Again, I don’t usually pay attention as I don’t carry a balance. I’m kind of surprised that JPM Chase hasn’t cut my credit limit down or raised the rate, as I’m one of those “deadbeats” that they make no money on (or at least very little based only on transaction fees). They’re all running scared for good reason, IMO.
They have huge exposure out there and with jobs still going away and people living on credit as their emergency funds (which was all too many peoples’ plan all along), there’s huge default potential that’s going to build not fall, regardless of what the recent numbers have shown. I think that a lot of cash flow has been freed up by people stopping payment on their mortgages, and paying on CCs instead. Kind of backwards from the usual advice but with RE continuing to depreciate it’s the right call in many cases these days.
August 17th, 2009 at 12:46 pm
au contraire, cvienne.. some of us would love to see gold under 900 : )
August 17th, 2009 at 12:51 pm
“BTW – I’d have us hitting 914-915 (maybe 919 is the number) around the week after Labor Day (9/16 to be exact)…”
I am with you on that. We should see a bottom soon after labor day with heavy volume. That might be a time to go long.
August 17th, 2009 at 12:53 pm
@karen
You know what I’m saying…
Hell, I’d like to see it under 840…I’d be on the phone…
August 17th, 2009 at 12:55 pm
LB is with cvienne here on SELLING rips. But smells a bounce. GDX? DIG? SSO?
FYI, fearless TRADERS, LB’s TBT position is green. NOBODY schools LB on govies.
Thor said: “Now would be a very good time for him to rub last Friday in my face. I’d happily take the beating too! ”
LB thinks that might be OT, WTMI and OTT my friend…!
August 17th, 2009 at 1:00 pm
Poor Annie, can you imagine accumulating 24 million in debt? Bill Gross coulda bailed her out rather than purchase that $23 million tear down on Harbor Island.
http://nymag.com/fashion/09/fall/58346/
http://www.ritholtz.com/blog/2009/08/bond-guru-bill-gross-living-large-in-california/
August 17th, 2009 at 1:03 pm
sorry, another link, because now I’ve heard everything:
http://www.marketwatch.com/story/builders-confidence-inches-higher-in-august-2009-08-17?siteid=bnbh
August 17th, 2009 at 1:10 pm
@LB
CV doesn’t have the massive cojones that SchAsMgmt does…It sometimes takes CV 6 weeks to show green on a trade…
But his “extra base hits” ratio is pretty good…
August 17th, 2009 at 1:10 pm
btw, GS is on the line for a portion of AL’s $24 million loan..
“Goldman Sachs, which helped finance the loan, now seems to be distancing itself from Art Capital and reaching out to Leibovitz. “We are deeply troubled by recent developments concerning Annie Leibovitz and Art Capital,” says Goldman spokeswoman Andrea Raphael. “Goldman Sachs owns a portion of the loan underwritten by an affiliate of Art Capital to Annie Leibovitz, but we have no involvement in the current sales-agreement dispute between Art Capital and Ms. Leibovitz. We have proposed to Art Capital that we terminate the current loan agreement with their affiliate so that we can work directly with Ms. Leibovitz to help her resolve her financing needs.””
August 17th, 2009 at 1:12 pm
Macy’s & SPG puts only took 3 days though…
Have rounded first and are legging their way to doubles…
August 17th, 2009 at 1:17 pm
ah yes, Macy’s puts.
August 17th, 2009 at 1:19 pm
LB – I’m just showing public humility ;-)
August 17th, 2009 at 1:24 pm
CV: That’s why you are the CLEAN-UP batter on this TBP ball club. The team:
I-Man would be the speed at lead off, LB puts the ball in play both ways at 2, then the power comes up with the golden bat of Karen, CV (lots of options there) and Manhattan in the engine room. Onlooker at 6, Hoffer, certainly at 7; Bruce in TN behind the plate at 8, ben at 9 – more speed to set the table. Coaches: BR and Jack McHugh.
August 17th, 2009 at 1:29 pm
Jack McHugh… the Skippah!!!
Thor can be ball boy until he books his first trade. :)
August 17th, 2009 at 1:30 pm
@LB
Nice side there…:-)
Now who gets the stadium naming rights?
Note…Good managerial move there to put karen in at the 3rd spot…You see, the opposing pitchers are SO AFRAID to pitch to her she draws a lot of free passes…
For the grace of karen, they can’t pitch around me so I get a few lollipops to take to Jack City and go Yard with!
August 17th, 2009 at 1:36 pm
as long as I get to be #22 I don’t care where I bat.
Cue some Fogerty.
along the lines of the retail space, while I would be short that space, there could be trades for a few brave souls on some BTE numbers out from 2 or 3 of them.
August 17th, 2009 at 1:36 pm
Lefty:
A true story…I played baseball actively until in my 30′s…you put me behind the plate… wrong-O!……when I was 10 years old, my coach put me in at catcher..a position I had never played and didn’t play again after that day…anyway, I didn’t like the bat coming at my face, and in the second inning the umpire went over to our bench and told my coach, ” Coach, you gotta get this kid out of the catcher’s box, he’s scared of the bat and every pitch is hitting me. I won’t have a square inch of skin that isn’t bruised in the morning if you don’t get me some relief. He hasn’t stopped a ball all night.”……
August 17th, 2009 at 1:41 pm
Someone spoke of potential trouble spots in Eastern Europe. There is also one one in the West; Iceland still hasn’t repaid guarantees of deposits as promised. Many Britsh had put money into the Icelandic banks that failed and the UK guaranteed those investments. They owe 4B Euro’s to the UK and and Netherlands. This is a country of 300k. Sorta like New Orleans being on the hook for that amount. The debate sounds a little like WWI reparations, with the Icelandic Parliament only willing to pay with a bunch of conditions attached.
If that deal unravels, there could be some trouble. It’s not just the 4B but all the other funding Iceland needs to keep from going bankrupt. No Pay, No Play.
August 17th, 2009 at 2:00 pm
@Bruce N Tenn
I started out as a catcher early on too…I liked it though…
But I did get crowned in the head a few times (so maybe you had a point)…Note: the ball coming at your nuts is 10x worse than getting crowned in the head…
Plus, one time in warmups, I was kind of looking the other way and the pitcher I was warming up didn’t notice…I turned just in time to have a fastball hit me square in the face and break my nose…Lots of blood loss when you break your nose…
This was back in the 70′s though so no namby pamby crap…I simply switched to outfield that day (and hit two doubles)…Found out I had a broken nose two days later…
August 17th, 2009 at 2:03 pm
A follow up to Barry’s Hampton’s post yesterday. Couldn’t wait for the “10 Links” post.
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/6040965/Houses-go-for-a-song-in-the-Hamptons.html
August 17th, 2009 at 2:04 pm
BTW – ben, LB, Andy (other dollar watchers)…
The “options” activity on the UUP today has been interesting…
Lot’s of call buying at the ASK at the 24, 25, & 26 strikes for March 2010…
Plus, (speaking of “22″ ben), there was a 2,000 contract purchase for the September 22′s (at $1.70)…which is IN THE MONEY, but notionally AT THE MONEY as we speak…
Little $340,000 bet there by someone…
August 17th, 2009 at 2:07 pm
That makes 3 former catchers on the same team… interesting. Did I tell you my childhood hero was Fiske?
I saw my lax coach take a ball to the nose in practice once… it was like a blood waterfall.
To pull this full circle…
I wonder if the SPX will go “blood waterfall” down to the 50 d EMA on the daily charts? It would be nice to get a real gap down between this week and next week’s candles.
Too bad I am on vacation next week, and promised Mrs I-Man that I would not trade… maybe she wont notice a closet phone call order… :)
August 17th, 2009 at 2:14 pm
@I-Man
I don’t know how they do it these days (maybe Bruce could tell us)…
But back then, to “reset” a deviated septum, to numb it first they took 3 rods each dipped in cocaine and jammed them up my nostrils…It was the most painful thing I’ve ever endured in my life (I was only 12)…I think the leather armed chair I was sitting in still has my fingernail claws in it…
Good thing though is…It cured me of EVER wanting to do coke at any time thereafter…
August 17th, 2009 at 2:17 pm
Has anyone noticed there ain’t a lot of volume out there? Will be lucky to hit 4B shares on the SP. Not looking like a panic to me and low enough to be easily manipulated by GS. Thay may be all that’s going on today, with GS trying to engineer a short squeeze.
August 17th, 2009 at 2:21 pm
@Mike in NOLA
That makes me happy…
I’d love to see a little move back to 989-990 in the last half hour…I’d re-up on the short side a little at 3:59…
August 17th, 2009 at 2:23 pm
Ditto!
August 17th, 2009 at 2:25 pm
Too bad I am on vacation next week, and promised Mrs I-Man that I would not trade… maybe she wont notice a closet phone call order…
I-man, don’t do it. I did that on my honeymoon and I’ll never ever live it down now. Just take the week off. It will all be here when you get back.
August 17th, 2009 at 2:28 pm
ben22…
ON YOUR HONEYMOON????
As sheep boy would put it…Baaaaaaaaaaaaaaaahhhhhhhhhhhhddddddddddd!
August 17th, 2009 at 2:28 pm
@ben22: I second that notion. Taking a step away from this is pretty damn healthy if you ask me. I thought I’d miss it while on vacaton a couple of weeks ago, but if anything, it did me a world of good.
I-Man – take your vaca. You can still keep one eye on it from afar but for me it felt good to not worry about having to watch it all day.
August 17th, 2009 at 2:32 pm
@I-Man
Or you could just be like f411 and arrange your vacations to go take pictures of the entrance to Goldman Sachs…
August 17th, 2009 at 2:32 pm
IN case you’re wondering, Andy T is our ace on the mound and Mike in NOLa is the closer.
Thor is short relief, with otto and hobo in the bullpen. DL is our specialist, just to get rid of lefties.
Ben, I guess you’re in the rotation as well – #22? Palmer?
August 17th, 2009 at 2:32 pm
On another note, I wonder if Steve Barry is still lurking and if he still has his QID holding. It could be turning here. NAZ up ~25% YTD. Can that continue?
August 17th, 2009 at 2:34 pm
Sold my DUG a short time ago. Hanging with DTO for now. Small amount though. Would love to short Macy’s at some point. Should have done that last week!
August 17th, 2009 at 2:40 pm
@Manny
I’ve been looking at manhattanguy’s (12:16) call a little closer…He may be right on that…
If he is, and the market ends up bouncing down around 918 or so then there would be another chance to get in to that Macy’s trade…
I’m keeping my “puts” riding tho because I’m in to the 2011 OTM…I’ll probably end up just trading around that position as she goes…
August 17th, 2009 at 2:41 pm
Seems to me everyone waiting for that final hour PPT kick-save and short-covering. It seems to me that once we get a few days where that no only doesn’t happen, but the market sells off badly into the close, this massive fake rally is over and done with. Of course, I’m probably wrong about this!
August 17th, 2009 at 2:42 pm
Crude is looking surprisingly strong today… shoulda played the bounce on that instead of SSO.
August 17th, 2009 at 2:43 pm
BTW, notwithstanding a little TBT day trade action, LB is in agreement with Mish and Gary Shilling (and ben):
http://globaleconomicanalysis.blogspot.com/2009/08/us-treasuries-yields-where-to-from-here.html
August 17th, 2009 at 2:46 pm
@Manny
Re: Macy’s
BTW – I’m only working with a small position there…My biggest fear is a 2009 version of what Treasury & Uncle Ben did for the banks last year…that a TARP program will get applied to CRE & Retail this year…
August 17th, 2009 at 2:49 pm
@LB (2:43)
The OTM options have been a great way to play that…Special thanks to Hugh Hendry for seeding that idea months ago…
August 17th, 2009 at 2:50 pm
cvienne,
I agree, however, my honeymoon was last July and I had an oil long with leverage in one of my accounts that HAD to be sold along with a few other stocks. I was scared shitless to leave for a week at that point and it ended up the week I left basically nothing at all happened. My wife has a 7 and 66 and works with me but not with clients, we picked about the most stressfull time ever to get married.
August 17th, 2009 at 2:54 pm
@LB,
Nice link. I have taken up reading a lot more Mish lately, the client letters you can get for free on the site are also very good. They had a pretty solid year last year but I was a little unhappy to see that the commodity fund from Sitka was down roughly 15% last year despite the fact that Mish did that public lashing of Peter Schiff. Maybe it would have been more fair for him to say that Peter Schiff got it MORE wrong. I know down 15% wasn’t that bad last year, but the way I read Mish’s blast of Schiff I would have thought they got everything right last year.
August 17th, 2009 at 2:59 pm
Schiff may be in store for a couple of tough months…
August 17th, 2009 at 3:00 pm
ben: Oddly enough G Soros cost me more than Mish or Schiff last year, with a wrong way bet against Treasuries. Like a lot of people, LB didn’t completely get the deleveraging safety trade and consequences of carry trade unwind.
Learned my lesson about gold also (can trade both ways, remarkable !!). Infinitely wiser and more Macro-oriented.
August 17th, 2009 at 3:00 pm
Best line from the article:
I frequently hear the complaint “who wants to hold treasuries for 30 years?” Well, certainly not me. Indeed, one needs to be cognizant that the bottom in treasury yields may be in and that the 30 year bull market in treasuries may be over. However, there are ample opportunities for swing trades in either direction, and this is an opportunity that may last much longer and go much further than treasury bears think given the misguided worries about inflation.
I get this from clients a lot, and have to give a nice long explanation of why we use something like TLT instead. As I heard Schilling say recently (not his exact words): Who gives a shit what the yield on the treasuries are, I’m buying them for appreciation, you think anyone really buys stocks for the yield….
August 17th, 2009 at 3:02 pm
@LB
Anything close to a pullback in gold (like we saw last year)…& I may make my first bullion purchases since 2004…
August 17th, 2009 at 3:07 pm
@LB,
I have never followed Soros so close b/c I never know what the hell he is really saying. I thought I read somewhere that he just barely made his targeted 10% gain last year with a couple big correct bets on the dollar right at the end of 08.
I saw an interview with him late in the year where they asked him about the dollar and his response was something like: I know exactly what will happen with the dollar, of course not disclosing which direction exactly he knew it would go.
This is one reason I always laugh at people so willing to shout out positions on tv, nobody that is any good actually does that.
August 17th, 2009 at 3:09 pm
also been trying to read more macro man as I saw some people keep talking about it here, also a very good site, and MM is very active in the comments section which is cool. Lots of insight there as well, and a blogger nemo that is pretty in touch with the China scene.
August 17th, 2009 at 3:14 pm
@ben22
Now THERE’s a strategy…
Combine the wisdom of a few of these guys (MM, Mish, Hendry)…
go long on a PAIRS trade against a short on the likes of (Wesbury, Luskin, & AJC)…
August 17th, 2009 at 3:20 pm
As I look at stuff like this more, don’t think this is the big one. Everyone is waiting for it.
http://www.cnbc.com/id/32448965
August 17th, 2009 at 3:23 pm
Readers Digest plans to file for Bankruptcy..
http://finance.yahoo.com/news/Readers-Digest-plans-to-file-rb-2943457922.html?x=0&sec=topStories&pos=3&asset=&ccode=
As they say 2040 will be the last year for any printed content.
August 17th, 2009 at 3:25 pm
@Mike in NOLA
As soon as they finish funding the 2 trillion for 2009, I’m pretty sure then we’ll begin to know…
August 17th, 2009 at 3:25 pm
@manhattan: I think their “last year” for printed content is going to come far sooner than that.
August 17th, 2009 at 3:26 pm
It’s 3.30pm kids …. are you ready to play PUMP or DUMP with Giles Straightarrow?
Jolly good. Well, Giles here, down in what they used to call the “Boiler Room” at 85 Broad because well, it actually was a boiler room until we put the big computers in here. Since last Fall, unknown to Johnny Retail, the NYSE has actually not been functioning, maintaining the appearance of actual trading activity merely for CNBC and other TV purposes. The US equity market is in fact now run 50% of the time from the basement here and 50% of the time by Dimon’s guys. The problem is, everyone who knows how to run this thing is away and we’re not 100% sure of the output lately, so we’re hoping that things don’t get too messed up before the big boys get back after Labor Day, lately when we press the PUMP button, it’s not always 100% clear that the futes are going to respond by rallying.
August 17th, 2009 at 3:30 pm
Crude could be faring better than the SPX today because of the hurricanes (kinda dumb when you think about it because of the amount already in storage – but old habits are hard to break)…
Plus, it hit a 50% FIBO…bubba…
Speaking of “bubba”…It’s way too early to tell, but Hurricane Bill, if it keeps on its track, could make its way to the Hamptons by next week!
August 17th, 2009 at 3:33 pm
cvienne: maybe The Day After Tomorrow
August 17th, 2009 at 3:34 pm
@Mike
LOL
August 17th, 2009 at 3:36 pm
@Mike: I don’t think this is Red Foxx’s Sanford & Son “Big One” (“I’m coming to join you, Elizabeth!”) either…..more dip buying by bag holders coming first.
August 17th, 2009 at 3:37 pm
Shut up Giles… you’ve said too much.
August 17th, 2009 at 3:38 pm
BTW –
It’s nice to have a thread titled “Look Out Below”
Then, we don’t have to feel guilty for being OT when we talk trading all day…
BR…you sly dog you!
August 17th, 2009 at 3:40 pm
The house of Dimon & House of Blankfein must be saying about now…
“Listen – we’ve conditioned all you dogs to buy these dips at 3:30 all summer by buying them ourselves…Why won’t you come out and play?”…
August 17th, 2009 at 3:43 pm
Buh-bye SSO… it was fun knowing you…
August 17th, 2009 at 3:43 pm
I-Man: Oh no, I’ve said too much. I haven’t said enough. I thought that I heard you laughing….
August 17th, 2009 at 3:43 pm
Who was it who looking for a big sell-off into the close?
August 17th, 2009 at 3:45 pm
No pump until we see low 900s. Not going to catch the falling knife. Glad to see Financials breaking down finally. Have some $FAZ, $SRS and $DUG trade positions.
August 17th, 2009 at 3:47 pm
@Thor
This isn’t really a big selloff…It’ll probably get minor support at 976 if it keeps going lower…
August 17th, 2009 at 3:47 pm
@ LB:
Oh SSO… you were just a dream… just a dream… dream.
August 17th, 2009 at 3:47 pm
cvienne: Think you have it about right on the mind reading. My conspiracy theory:
My scenario may be wrong, but: A moderate drop on the SP. Get many to go short and then roll them up by pushing the prices up. Then everyone thinks the correction is over and rally will continue. Goldman can then distribute (is that the term they used back in the pool days?) their shares and let the market plummet while it goes short.
August 17th, 2009 at 3:52 pm
@Mike in NOLA
Yeah, it pretty much looks to me like after the little moonshot from 870…Anything in the 925 – 1018 range is Lloyd’s way of saying “thank you for playing” sold to you!
August 17th, 2009 at 3:56 pm
Giles here, must pump, Mister Blankfein said.. must defend… 975, c’mon boys. Pump !!
August 17th, 2009 at 3:57 pm
Such a nice way of putting it :)
August 17th, 2009 at 4:06 pm
Phew, what a relief. William Weaselheimer just told me what happened to the last trader who manned the NYSE market simulator in January. Can’t tell the details but it involved John Thain, Charlie Gasparino and a commode.
If the market didn’t close above SPX 975, it would be bye-bye Giles… Wall Street is stressful, I tell you !
August 17th, 2009 at 4:07 pm
Nice solid black candle on S&P. Tomorrow will be either a repeat of today or a doji then followed by a slight recovery and then continue on with major declines.
August 17th, 2009 at 4:20 pm
LB expects we will see a Turnaround Tuesday, and then would seek to re-engage with the market from the short side, perhaps around SPX 995-1000. We will not be getting involved on the long side here, at least not until we see the 875-910 area, where the 200DMA will be located. We will not fear the cold steel as much as we did in July.
It would not be unexpected to see a rally in EUR:JPY, equities and commodities tomorrow. FXE was rallying all day from its morning lows. We would be selling into that rally, as we believe the dollar bulls have the upper hand now.
Treasuries will probably see some profit-taking tomorrow, here we are at 1.00% on the 2-year.
We will continue to check in with Giles Straightarrow and his quant buddy Gopal Sankaranaramakrishnan, down in the basement at at GS, for up-to-the minute reports direct from the Market Manipulators.
August 17th, 2009 at 8:29 pm
@LB
Yeah…I’ve been noticing a lot of crazy activity in the SPOOS in the AH…Mostly what cvienne believes to be “seek & destroy” initiatives…
I count 11 in the last 40 trading days (with today’s AH being the most violent)…
Reading the tea leaves, the “notional” move tomorrow would be a bounce higher (I’m going to say 997-999 on the SPX, but about 100 on the SPY)…Then…look out below!
We might be talking 950 by tomorrow or Wednesday…
Andy T…GET ON IT Brah!
(Including the AH prints that have been going on)…We just formed a PERFECT equilateral triangle where the point reaches September 21st @ 975.92 on the SPX (the Monday after Sept opex)…
The top of the triangle starts at the 1018 high…The bottom starts at the 6/23/09 low and intersects the GAP opening of 7/15…IT’S AN EFFING PERFECT EQUILATERAL…976 is the finishing point on 9/21…
cvienne thinks there is some meat on that bone…
BTW – cvienne thinks a BREAK of that wedge will undoubtedly occur…to the downside…with the end of the break co-inciding with the tip of the wedge …
For those bubbas not interested in geometry…That’s 919-920 on 9/18/09…
Now I’m ready for some football!
August 17th, 2009 at 8:55 pm
BTW –
What’s “disgusting” about that (8:29) post is, if it happens…
It sets up a CLOSE on 12/31/09 of between 1052 and 1078…
Right in the wheelhouse of the GS call of 1060…
Grrr….
August 17th, 2009 at 8:56 pm
Trade the tape that you SEE not the one that you WANT…
August 17th, 2009 at 10:51 pm
cvienne-
third person??? okay leftback- by the way-
redskins will suck this year by the way- bears look good for the playoffs- cardinals sketchy
September 7th, 2009 at 5:00 pm
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