Stay tuned for today’s video. Should have it posted around 7:30pm.
3:49pm
PIMCO’s El-Arian: The $700B pricetag of the bailout bill is necessary, but is not sufficient
~ That’s not good…
3:48pm
Market on pause around 1265 as we approach the close.
3:13pm
TED Spread remains elevated, 334 bps. Potential double top on the ES.
2:55pm
After the close MOS and MU report earnings. Tomorrow before the open, we see MAR and STZ.
2:44pm
Watch the 1175 and 1187.50 resistance levels. I will entertain a short position on a rally to 1187.50
2:25pm
Gold selling off in the past 10 minutes, back under $880, trading down to $877.
2:20pm
Sallie Mae (SLM) continues to struggle, down 19% today.
1:58pm
The market is trying to wrap its brain around this most recent news announcement. GE back down 3.8%.
~ Initial reaction was a bid in the market. But how good is this news? Isn’t it troublesome that GE needed to raise $15B? Let the dust settle. I do not want to trade this news driven market right now.
1:53pm
GE resumes trading. The stock was down 7.3% when halted. It is now in positive territory.
1:43pm
~ GE announces $12B common stock offering (5% of market cap).
~ Warren Buffet announces investment in GE. Reached agreement to sell $3B of perpetual preferred stock in a private offering to Berkshire Hathaway.
~ Reaffirms FY08 EPS guidance issued last week.
1:28pm
French Finance Minister Lagarde: Denies reports of a 300M euro bailout plan.
~ ES selling off on the remarks.
1:23pm
NYSE CEO: Confirms that the SEC is evaluating whether or not to re-establish the uptick short selling regulation.
~ Also considering placing circuit breakers on specific stocks.
1:06pm
CNBC’s Gasparino: According to SEC staffers, they are leaning towards extending the short selling ban
~ Announcement likely today or tomorrow. Ban was due to expire tomorrow, Oct. 2
~ Ban may be extended for another 20 days
1:04pm
Sigma Finance Corp issues statement: Decides to cease trading, awaiting appointment of receiver. Will not make payments to counterparties.
~ Reminder: Weakness in GE attributed to exposure to Sigma
12:53pm
ES Commission reportedly declines comment on reports of a possible bailout package from France.
~ French Finance Minister Lagarde: Still gathering ideas for a plan. No decision has been reached.
12:50pm
CNBC suggesting that the afternoon rally may be a result of rumors about an EU financial bailout plan.
12:44pm
CNBC: Potential House vote on new bill will not come until Friday.
Natural gas continues to rally. Gold is at session highs. Crude is rebounding back towards $100.
12:41pm
Watch for resistance at yesterday’s high, 1175. After that, look for resistance at 1187.50.
12:31pm
A light volume lunch hour rally is underway in the S&P. The rally looks legitimate after the ES retraced 50%.
12:25pm
ES attempting to break above its 50MA. Needs a confirmation candle.
11:56am
Gold rallying about $8 in recent minutes. USD holding most of its gains but off its best levels.
11:52am
ES 10-minute has moved into its 50MA (1155.65). This level has been resistance all day long. May be a good time for day traders to take profits on long positions or initiate short positioned with a stop just above this level.
11:25am
S&P scalp trade working. ES moving into its 20MA (1253). 50MA (1156) lies above.
Impressive volume on UNG buying. Dare I say that Nat Gas might be done going down…
~ For those that follow StockTock, you know that I’ve been wrong on every nat gas bottom call and currently have a trade turned investment in UNG.
11:13am
WSJ: Senate bill will temporarily allow the FDIC to borrow unlimited funds from the US Treasury, up from the $30B currently.
~ Temporary borrowing would last until the end of 2009.
11:05am
Natural gas (UNG) is rallying on strong volume.
11:00am
Gold may be forming a bull flag on the intraday chart. Crude is weak after the inventory data, trading at 96.50. VIX is near session highs at 42.20
10:55am
ES just made a fresh low and is now bouncing. Could be a double bottom. Might be worth a scalp trade. Exit if we make a new low. Ride the bounce to the 20 or 50MA. ES at 50% retrace (Monday’s low to yesterday’s high):
10:40am
ES trading just above session highs. The economic data has been poor today. Weak ISM data. Larger builds in oil and gas show weaker demand. And credit market spreads remain near their worst levels ever seen. The volume has been stronger this morning on the sell side.
10:36pm
Senator Schumer: Believes new bill will pass House and Senate. Says mark to market needs to be reformed, but expects it will be addressed later in a more thoughtful and thorough bill on regulation. He does not expect it to be included in current bill.
~ The conflicts with earlier reports.
~ Beth Brooke, global vice chair at Ernst & Young: “Suspending mark-to-market accounting, in essence, suspends reality.”
10:35am
Oil Inventory Data: Crude +4.28M v +3Me | Gasoline +901K v -1.8Me | Distillate -2.36M v -1.3Me | Utilization 72.3% v 72.2%
~ Crude selling off to session lows on the data to 97.25. Nat gas also weak on the data.
10:26am
Credit worries at GE due to problems at London’s Sigma.
10:15am
US Senate bill has reportedly included provisions to suspend “mark to market” accounting.
10:05am
From Mohan:
BREAKOUT ALERT
SIJ - UltroShort IndustrialsIn yesterday’s comments section I posted an extensive analysis on Industrials:
————
Everybody is now talking about a severe recession. The charts are confirming it. My thesis is that the weakness first reflects in Industrials, it then shows in transports. The consumer is the last to fall apart - IN THAT ORDER.Pay attention to the charts of Industrials (XLI), DJ Transport (IYT) and Consumer discretionary (XLY).
http://finviz.com/quote.ashx?t=xli,iyt,xly&ta=1&p=d
XLI is completely broken - new lows; Major Breakout in UltraShort Industrials - SIJ
IYT looks weak and shaky - close to lows
XLY still holding up above its July low.Yesterday, on a 485 point up day today, XLI was down 1.7% and then flat.
My strategy: buy puts on or short weaker stocks in XLI and then follow-up with puts on components of XLY. SIJ looks very attractive.
10:00am
ISM Manufacturing Index data. Expectations: 43.5 v 49.5e
~ ES selling off on the disappointing data. Gold rallying to $890.
9:58am
I’m watching this DPS which may be breaking out of a long-term cup with handle pattern. I’m going long on a break above 26.50 (Thanks to RayO for this trade idea!). This is a longer-term position for my retirement account.
9:47am
Nat gas rallying.
9:45am
At 10am, we will hear the ISM Manufacturing Index data. Expectations: 49.5e v 49.9 prior
9:33am
VIX back above 40. Treasuries pointed higher. ES selling off at the open.
9:28am
As Washington scrambles to get a plan in place, the credit markets remain frozen. TED spread at 340 bps. This does not inspire confidence. Tough to be overly bullish on equities until we see improvement.
9:22am
NYSE long-term chart:
9:02am
ES may be forming a bull flag. Watch for resistance at the prior support level, 1187.50
8:52am
S&P E-Mini Futures (ES) trading lower by 10 points to 1159. The credit markets remain effectively frozen. Crude oil is trading lower, under $100. The dollar has taken out yesterday’s high.
~ I am becoming more concerned about the euro and Europe’s ability to handle this crisis. The dollar’s strength has nothing to do with the fundamentals in this country, but more to do with foreign central bank’s demand for US dollar. Large short USD and long EUR positions remain to be unwound. The USD Index may break above 80. Eventually, I believe the inverse relationship between the dollar and gold will break, and both may rally together. Check out the weakness in the euro.
10-minute chart
Daily chart:
8:15am
Sept. ADP Employment Change: -8K v -50Ke
Tuesday, 9:29pm
CNBC’s Gasparino reports that some of the House Republicans are preparing an alternative to Paulson’s bailout plan as the group does not favor the government taking a big role in markets
* CNBC adds that components of the alternative plan include requiring the Treasury to guarantee, at up to 100%, bank losses resulting from failed MBS originated prior to the plans enactment. Allow companies to carry back losses arising in tax yrs ending in 2007,2008 or 2009 back 5 yrs. Allow a “repatriation window” for profits earned by US firms overseas; Allow banks to treat losses on shares of preferred stock in the GSEs as ordinary losses and not as capital losses. Suspend the capital gains tax rate for 2 yrs. Limit backing of high-risk loans by the GSEs. Schedule Fannie and Freddie for privatization; Suspend mark to market accounting until the SEC can issue new guidelines that will enable firms to mark these assets to their true economic value. Stabilize the USD by repealing the Humphrey-Hawkins Full Employment Act, which some say diverts the Fed’s attention from long-term price stability to short-term economic growth. Require the Treasury to write rules prohibiting excessive compensation to excecutives of failed companies. Task the SEC with regular, annual audit reports of entities the federal government has brought under conservatorship or now owns.
* Earlier it was reported that the House GOP members were seen supporting the Senate’s bailout proposal
Tuesday, 7:45pm
REPORTEDLY SENATE DEMOCRATS AND REPUBLICANS AGREE ON BAILOUT VOTE TOMORROW; Senate to vote on raising the FDIC insurance to $250K from $100K
* The agreement clears the way for the Senate to take up the market rescue plan.
* The Senate bill would increase federal deposit insurance limits and include several tax breaks; The bill also will include the Senate’s version of an extension to a series of renewable energy and other business tax credits, as well as an extension of a fix for the AMT.
* WSJ noted that Congressional aides expressed hope that increasing the FDIC deposit insurance limit will help attract the necessary votes later this week and 12 more votes would be needed in the House to pass the bailout plan, based on Monday’s vote.
* WSJ added that House Democrats oppose the Senate’s version of the tax package.
* Earlier today, Senator Dodd said that the Senate was mulling expanding the FDIC’s authority over troubled assets and that the next 24-48 hours may yield a positive result on the bailout package with added aggressive support from the White House; Dodd also noted that the opponents to the bailout were having second thoughts.
* Follow Up: Reportedly, Senators Obama and McCain plan to return to Washington for the Senate’s vote on the bailout bill. Also reportedly, the House GOP members are seen supporting the Senate’s bailout proposal.
September 30th, 2008 at 11:17 pm
Before I start, I want to let everyone know that I am the mother of all bears. This one day “rally” that we just watched today has given me pause to ponder though. Remember October 19, 1987 and the rally the next day? It seems to me that we have just repeated history because it (too) was followed by a 5% up day.
Have you noticed that all the “bottom” callers have fallen silent recently? It seems that everyone is saying that we have much faller to fall (now). Was monday the capitulation day? Probably not, but who says we *must* have a catastropic “capitulation day”. Since when, was the market completely predictable? Oh! And by the way, today was a 90.2% up day.
Is *this* the bottom? I don’t think so. Not just yet. But! I can see a short rally following the inevitable passing of some kind of “rescue” bill this week that will last for a few days or weeks. After that, I expect a retest of monday’s lows and *maybe* even a little lower. We may even have our “capitulation” day where everyone is saying it’s the end of time. I wish I could say for sure, but my crystal ball is a little foggy lately with all this damnable government intervention.
For now, I’m hanging up my shorts to dry, picking out a comfy spot on the fence, watching closely, and looking for strong companies to lead the way up. Like 1987, I expect happy days may come sometime in the next couple of months.
Just my thoughts.
[Reply]
September 30th, 2008 at 11:28 pm
A stock that is giving me the “come hither” look.
DPS (Dr Pepper, Snapple) was spun off back in May, has formed a beautiful cup with handle, pretty much ignored monday’s crash, just took Wrigley’s place in the S&P500, and tried to break out today with 5 times average volume on a low volume day. Opinions?
[Reply]
October 1st, 2008 at 1:18 am
Papa Bear say that you’re an embarrassment to the Bears community. One year into this bear market and you’re predicting Monday is a possible 87′ bottom. Today is the beginning of a 30 year bull market run…lol…
[Reply]
October 1st, 2008 at 2:17 am
I never said this is the beginning of another 30 year bull run. I said that I think this correction *may* be coming to an end soon and we *may* be beginning another leg up in a few weeks or months. At least that’s what I *thought* I said. No matter, I’ll be watching from the fence anyway.
[Reply]
October 1st, 2008 at 8:49 am
I’m thinking we close the gap down on Monday open over the next couple of days, This requires a rally to 1220 ish and then we begin slow tumble to test lows.
[Reply]
October 1st, 2008 at 9:26 am
If we rally to close the gap, I may have to sell my 3-5 year hold positions I bought on monday’s close. That would be too quick of a move to not take those profits for me.
[Reply]
October 1st, 2008 at 8:49 am
Ray-O,
Thanks for your analysis. I think your “watching from the fence” is respectable. Even if this is not a bottom, you have to be comfortable in a short postion. If you are not comfortable being short, its perfectly ok (smart) to be on the sideline until things stabilize and you are ready to out money to work.
Thanks for the DPS chart. Looks ready to run…
[Reply]
October 1st, 2008 at 1:03 am
Something we discussed today in a chat room. Funds don’t behave as expected.
http://www.marketwatch.com/news/story/dangers-leveraged-etfs-great-analyst/story.aspx?guid={D9C014C0-71F9-462F-BEAE-23D54B3D8780}&siteid=yhoof
main conclusion is to stay out of ETN’s.
[Reply]
October 1st, 2008 at 8:36 am
Proshares finally emailed me and this is what I got regarding my question about SSO and UYG performance :
“More specifically, the NAV for SSO yesterday was $44.65 but closed (officially at 4:15pm) at $46.50, which is a premium of approximately 4.14%. Investors in any ETF, including ProShares, should be aware of potential differences between daily net asset value (NAV) and closing price. ProShares NAVs are calculated using prices when equity markets close, usually 4:00 p.m. ET. However, like many ETFs, ProShares trade on their respective exchanges for an additional 15 minutes, usually 4:15 p.m. ET, when the equity futures markets close. Please keep in mind that there are additional factors as listed in the prospectus that may also prevent the ProShares Ultra S&P 500 from meeting its investment objective. ”
So -SSO @ 46.50 but NAV at 44.65 because of after market trading. UYG @ 16.24 but NAV at 14.49. That is some screwy stuff and why some of us got screwed. What I do not understand is why or how if I own it over a period of time how these imbalances don’t work themselves out and get right over time.
How can this be corrected? Here are the symbols for SSO nav = SEV and for UYG = UYG.IV (you may have to look this one up on yahoo they said.
Bottom line is I have learned the hard way to check the NAV before placing the order. I have requested a list of the NAV symbols for all proshares etf’s and will forward when I get it. I hope the helps and clears some stuff up. Here is the link to proshares if you have further questions. It took them some time to respond to my inquiry.
[Reply]
October 1st, 2008 at 8:41 am
Thanks Shanky
[Reply]
October 1st, 2008 at 8:47 am
The other thing to keep in mind is the volatility of the index (SPY for SSO as an example). The more volatile the index, the less your performance over time. If an index goes straight up 5% over say 3 months you have a better return than say an index that falls and rises with high volatility and then ends up 5% over the same 3 months. Proshares gives a good example of this in the prospectus. This is why One trading strategy bantered about on one of the Yahoo message boards is to short both UYG and SKF equally dollar amounts and you will come out ahead over the long run. The more volatile, the worse these ultra ETFs will perform.
[Reply]
October 1st, 2008 at 8:52 am
I’m jonesin for a video. I feel lost and confused. Kinda like starting the day without caffeine. This sucks. I hope daily commentary makes up for no vid.
[Reply]
October 1st, 2008 at 9:05 am
Definitely will get a video out tonight!
[Reply]
October 1st, 2008 at 9:09 am
Thanks in advanced for that.. And good morning to you all..
Good luck today!
[Reply]
October 1st, 2008 at 9:21 am
Better be 20 minutes to make up for lost time.
[Reply]
October 1st, 2008 at 9:25 am
Not possible on YouTube. Capped at 11 minutes.
[Reply]
October 1st, 2008 at 10:16 am
You will just have to talk twice as fast. Pretend you are a politician.
Keep up the good work Craig. You picked the most fascinating time in the market to launch the site, and we are glad you did.
[Reply]
October 1st, 2008 at 10:33 am
Can’t wait to launch StockTock Social. Its going to be sweet. Live chat, and you guys can post your own articles, charts, and videos. Will be much easier to share information.
[Reply]
October 1st, 2008 at 9:40 am
The floor pivot for SPY is down around 114.30 or so. that is where I would expect intraday support.
the Q’s are bouncing on their pivot, and IWM looks to go down to S1 at around 65.90.
Gold is back up into its consolidation range.
[Reply]
October 1st, 2008 at 9:42 am
also looks like GDX is trying to violate a descending triangle on the 10-min
[Reply]
October 1st, 2008 at 12:11 pm
Whats the ETF thats 2xGold? Do you see a breakout coming?
[Reply]
October 1st, 2008 at 12:14 pm
DGP. I like gold but the timing of a rally it a bit hazy with the dollar’s rally. I’m long and buying more on weakness.
[Reply]
October 1st, 2008 at 9:41 am
I just jumped into some coal stocks.. JRCC and ICO
I $ should pullback a bit, might give these commodities some well needed push higher..
JRCC: 20.73
ICO: 5.86
Stops aren’t too far down.. Cause I don’t trust the $ nor this market..
[Reply]
October 1st, 2008 at 9:47 am
New trade just put on this morning by Citibank.
Recommended going short EUR/USD at 1.4005
stop loss at 1.4180 and a take profit at 1.3377 (200 week moving average)
Good luck,
Pete
[Reply]
October 1st, 2008 at 9:56 am
UNG putting in a topping candle with relatively high volume..
Longs watch out..
[Reply]
October 1st, 2008 at 9:57 am
Gold just broke through 886, the 50% retracement from its highs in March. We might be at 900 for gold by 10:30AM.
[Reply]
October 1st, 2008 at 10:00 am
All,
MAJOR BREAKOUT ALERT!!
SIJ - UltroShort Industrials
In yesterday’s comments section I posted an extensive analysis on Industrials.
Craig, can you post the following at the top of this note? Thanks.
————
Everybody is now talking about a severe recession. The charts are confirming it. My thesis is that the weakness first reflects in Industrials, it then shows in transports. The consumer is the last to fall apart - IN THAT ORDER.
Pay attention to the charts of Industrials (XLI), DJ Transport (IYT) and Consumer discretionary (XLY).
http://finviz.com/quote.ashx?t=xli,iyt,xly&ta=1&p=d
XLI is completely broken - new lows; Major Breakout in UltraShort Industrials - SIJ
IYT looks weak and shaky - close to lows
XLY still holding up above its July low.
Yesterday, on a 485 point up day today, XLI was down 1.7% and then flat.
My strategy: buy puts on or short weaker stocks in XLI and then follow-up with puts on components of XLY. SIJ looks very attractive.
[Reply]
October 1st, 2008 at 10:04 am
Good thing about playing industrials is that with the exception of GE (may be there are two other stocks), none of the individual stocks in the list are being manipulated by SEC.
[Reply]
October 1st, 2008 at 10:55 am
I like this, but after bill passes. I think we get a slight bump up. Then things get nasty whit horrible earnings over the next two weeks. I’m not sure if the relief package is already priced in the market (run yesterday), but earnings are not.
[Reply]
October 1st, 2008 at 11:02 am
Agree with most of your thesis. But, I seriously doubt if there will be any major rally (200 pts top) after the bill passes. In addition to earnings, there are other important data due out soon.
Thu night they vote, Friday morning employment nos out. With two hurricanes and Wall St turmoil, credit crunch, I think that the nos will not be pretty. Expected un-emp rate 6.1%. Is this market priced for a major surprise.
[Reply]
October 1st, 2008 at 11:34 am
Bump up pre market and early tomorow then fade off late. I’m planning on dumping most longs there. I believe financials will lead (they are up today) because they are main beneficiary of plan but broad selling outside of that. I’m adding to UYG ahead of the next few weeks decline.
[Reply]
October 1st, 2008 at 11:14 am
bucy and tdw remain my backbone stocks for day and swing trading. Honest stcoks - they move on market data , rarely take wild intra-day swings, and are traded relatively lightly which allows good day movement. On days w/ economic data stay out until the data is released and digested. TDW’s down over 2 bucks this AM. Talk about sticking my neck out…look for it to move up from here.
[Reply]
October 1st, 2008 at 10:06 am
CAT is breaking down
[Reply]
October 1st, 2008 at 10:22 am
My ideas for synthetic plays:
All of us may not be able to trade currencies, commodities etc. I was thinking about synthetic plays for some scenarios:
Long Dollar = Short Oil, Vehicles = DUG, DDG
Short dollar = long gold; Vehicles GLD, DGP and shares of gold miners
Short Euro = Short Oil: Vehicles = DUG, DDG
Recession in US = Short producers in emerging markets, industrials
What do you guys think?
[Reply]
October 1st, 2008 at 10:26 am
DIG/DUG actually represent a basket of oil stocks. To play the price of oil, I use DTO (double short), DXO (double long).
[Reply]
October 1st, 2008 at 10:28 am
Those are dangerous imo. The correlation is not historical. It is a case of choosing the right bet and using the wrong vehicle. Sure UUP/UDN suck but they are safe bets.
Plus emerging markets are down 75% from their peaks. And they are extremely oversold on stochastics and other momentum indicators. Sure, they may go lower. I would rather stay asleep at night rather than watch the hk index on bloomberg going down.
[Reply]
October 1st, 2008 at 10:49 am
Good point about emerging markets.
Most emerging markets such as Korea has a lot of exposure to consumption in Europe, US and other emerging economies in Asia. Tankan survey released last night showed contraction in Japan manufacturing for the first time in 5 years. It is possible that emerging markets have already priced in this news.
Now that weakness in Qs indicating slowdown in tech spending It is time for price wars, anyone?
As with sleeping at night, I TRY to separate my feelings from trading.
[Reply]
October 1st, 2008 at 10:52 am
TAN is pure solar ETF - may get boost from news of being included in bill and I believe value is there. Sure is easy way to pick up some priecy names in the industry.
Link - http://www.claymore.com/etf/fund/tan
[Reply]
October 1st, 2008 at 11:06 am
Shanky,
I think caution is in order about playing stocks long on such news. I think with oil being weak, Solar stocks are being sold off. It looks like some hedge funds are dumping solar stocks into every small uptick.
[Reply]
October 1st, 2008 at 11:07 am
Craig,
Are still holding to you AUY?
[Reply]
October 1st, 2008 at 11:10 am
Yea, I still like the gold miners, though I think I picked one of the weakest ones in the group. I’m long GDX calls. And I own DGP. My gold positions are longer term trades. I am dollar cost averaging on weakness.
[Reply]
October 1st, 2008 at 11:12 am
USO forming a small H&S on the 1 min chart. Possible measured move breakout puts it to about $79 if it follows the move in UNG. Move would be counter trend but could happen.
[Reply]
October 1st, 2008 at 11:29 am
Wow, nice call
[Reply]
October 1st, 2008 at 11:31 am
That a boy, StockJock!
[Reply]
October 1st, 2008 at 11:19 am
‘I am becoming more concerned about the euro and Europe’s ability to handle this crisis. The dollar’s strength has nothing to do with the fundamentals in this country, but more to do with foreign central bank’s demand for US dollar. Large short USD and long EUR positions remain to be unwound.’
- That’s correct. You don’t see this opinion often in the mainstream press, but it is the way it must play out if a recovery is to eventually take place. Other nations will also have to inject liquidity into their own markes, and currency trades are relative. The U.S. has been first into the slowdown, and have been cutting rates for over a year. The rest of the world stil had heatly growth rates until lately when the first EU and Chinese rate cuts were announced. The U.S. will lead the recovery out, and there will be demand for US dollars as (and before) that happens. The strengthening of the dollar, assuming it occcurs, will be a multi year play for the ultra patient and in the long term will have an inverse effect on the value of hard assets.
[Reply]
October 1st, 2008 at 11:54 am
WSJ: Senate bill will temporarily allow the FDIC to borrow unlimited funds from the US Treasury, up from the $30B currently.
~ Temporary borrowing would last until the end of 2009.
- They copied Ireland from two days ago.
[Reply]
October 1st, 2008 at 12:06 pm
Look at C, JPM and BAC.
All making new highs. Buy rumor/sell the news on the bailout?
John
[Reply]
October 1st, 2008 at 12:13 pm
we are in a bullish falling wedge from 1300 on SPX since all of AUGUST.
Connect the short squeeze friday thru now on SPX, DIA, AND QQQQ.
head and shoulders on SDS, QID, and DXD forming.
Dollar will make new highs, GOLD and OIL new lows. Prove me wrong.
I do think banks are too expensive nonetheless.
[Reply]
October 1st, 2008 at 12:19 pm
Bullish divergence on XLE. May be worth a trade.
[Reply]
October 1st, 2008 at 12:20 pm
Looking at the 30min chart.
[Reply]
October 1st, 2008 at 12:20 pm
Expert option traders,
Why are there 2 different options for SDS with same strike price, but different premiums?
Example: SDS OCT08 75 Call
http://finance.yahoo.com/q?s=SBJJW.X
http://finance.yahoo.com/q?s=SRJJW.X
TIA.
[Reply]
October 1st, 2008 at 12:31 pm
There was a capital gain 3.82 paid out last week. Caused all sorts of havoc and options did not trade for half a day. Eventually the old options became non-standard options that have a strike price 3.82 below said price. You’ll find a difference in price of about 3 bucks for the same strike price options.
[Reply]
October 1st, 2008 at 12:40 pm
Thank you.
[Reply]
October 1st, 2008 at 12:24 pm
watching UAUA again.
[Reply]
October 1st, 2008 at 12:41 pm
Short opportunity now?
[Reply]
October 1st, 2008 at 12:53 pm
nope, buy on pullbacks or stay neutral. it may retest to near 9 dollar mark, but its a break out of the falling wedge>
[Reply]
October 1st, 2008 at 12:54 pm
Ty. How closely does it trade in relation to oil prices?
[Reply]
October 1st, 2008 at 1:00 pm
with oil and also with transports, and stocks in general.
Buying in the transports is bullish for stocks ans bearish for oil (and vice versa via the correlation). also see fdx, ups, cal.
[Reply]
October 1st, 2008 at 12:37 pm
watching AAPL and QLD
[Reply]
October 1st, 2008 at 12:38 pm
Anybody knows why market is rally so strongly, in particularly for financial stocks? What happened?
[Reply]
October 1st, 2008 at 12:44 pm
Hope
[Reply]
October 1st, 2008 at 12:58 pm
Hope for a pass of bailout? If it is really passed, so the effect is already priced in today…and tomorrow will sell off on news?
[Reply]
October 1st, 2008 at 1:00 pm
Hope for a bailout plan here. Hope for a bailout plan in Europe. I’m bearish, but not shorting here. I would try a short position on a rally to 1187.50
[Reply]
October 1st, 2008 at 12:46 pm
Stocktockers,
What are your current outlooks on oil? It seems to me that USO won’t stop falling until support at roughly $68. Same with highly correlated stocks like SU, COP, and XOM with there relative support levels.
If fear of inflation comes back into play, then I think it’s likely we see a reversal in energy. I would love to hear anyone’s thoughts on this, because I believe there is a great deal of opportunity on the horizon here.
[Reply]
October 1st, 2008 at 12:53 pm
Mohan - CAT is rallying back up strongly. Any ideas on short entry? Thinking of buying some puts around 60.
[Reply]
October 1st, 2008 at 2:31 pm
I am really getting whipsawed with this news driven markets. Just don’t know what to do even though I see CAT clearly being broken.
I think CAT has a lot of problems with demand and financing unit. Last week they raised some money through debt offering - paying over 6%. Expensive, if you ask me. Given the news with GE, I think CAT is probably in much worse shape than I imagined.
May be take a 1/3 position now and add to it on two more up days. This is the best I can tell/advice in this news driven market where fundamentals and charts no longer matter.
[Reply]
October 1st, 2008 at 4:04 pm
Thanks. It reports earnings in the week of Oct 23rd. I’m thinking of splitting between some Oct puts and Nov puts with a view to getting out of the Oct puts at the first big drop. I got caught by the late morning whipsaw too but look at how it has drifted lower since. And the downtrend that started with the Friday closing candle hasn’t really been broken.
[Reply]
October 1st, 2008 at 12:57 pm
GOLD in bearish falling wedge near resistane. UUP in bullish falling wedge.
[Reply]
October 1st, 2008 at 1:02 pm
I meant GOLD in bearish RISING wedge.
[Reply]
October 1st, 2008 at 1:18 pm
/YM kissed right off of a 61.8% retracement level that it could not break yesterday. Doesn’t look like it will break that.
Let’s see if selling begins to pickup into the close, if it does, my bearish mood will get even more confident. I don’t care what the senators do, I’ll let the charts let me know where we are going. They have worked for me thus far, I will continue to trust them. Vix will spike past 50 and thats when I’ll sell and go back into cash.
This market is overbought right now. Look at 1 hour chart. It’s been working great.
[Reply]
October 1st, 2008 at 1:27 pm
buy DZZ DTO or SHORT Gold and OIL
[Reply]
October 1st, 2008 at 1:27 pm
Craig,
I am responding to your comment on GE/Sigma at he top of this note. Is the market ignoring rising CDS premiums on GE debt at its own peril? Or, the mere fact that GE is not going down to new lows is an indication that this will be a non-event?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGw05ovoVo14
I know this may be over simplification of the situation… but here is what I think. GE traded a tad below its Monday’s low of 23.10. At present at 23.64. Neverthless, we have to watch GE closely. If it closes below this past Monday’s low (23.10), it means that this news is very significant and perhaps the bailout will not immediately solve GE’s problems.
When CDS spreads were widening for GS, the stock held up for a bit longer than other financial stocks. But eventually it caved in. When GS caved, everything cratered. That’s why we have to pay attention to GE news much more closely…
[Reply]
October 1st, 2008 at 1:30 pm
Wow did you guys hear Rick Santelli? As always he is the man.
[Reply]
October 1st, 2008 at 1:31 pm
I missed this news completely. Does anybody have any take on defaulted Argentina’s bonds?
Argentina’s Defaulted Bonds Trade at Three-Month High (Update1)
By Drew Benson and Lester Pimentel
Sept. 30 (Bloomberg) — Argentine defaulted bonds traded at a three-month high after the government said it will give creditors a chance to restructure the $20 billion of securities they held out of a 2005 settlement.
The government is working with Citigroup Inc., Barclays Plc and Deutsche Bank AG on details of the exchange and expects to complete the transaction by year-end, Cabinet Chief Sergio Massa said last night, flanked at the presidential palace by representatives from the banks. He said investors will have to put up cash for new bonds to participate in the swap, part of a government effort to cover growing financing needs.
The securities were little changed today at about 29 cents on the dollar, according to Exotix Ltd., a London-based brokerage that specializes in distressed securities. They rose 1 cent yesterday, a contrast to the tumble in most emerging-market assets fueled by a widening global financial crisis.
The offer is “very attractive for the people who are sick and tired of dealing with this,” said Alberto Bernal, head of emerging-market research at Bulltick Capital Markets in Miami. He forecasts at least half of the creditors will participate. The new cash requirement isn’t “that big of a constraint. The upside you’re getting still makes for a decent return compared to what you have right now, which is a piece of paper.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=anbiBcQDhzpE
[Reply]
October 1st, 2008 at 1:34 pm
Maybe instead of coming up with arbitrary shorting rules that have only hurt the market, the SEC should consider investigating the insider trading and Rumor mongering that seems to be going on constantly.
This market is completely manipulated, time to get back on the sidelines until things settle.
[Reply]
October 1st, 2008 at 2:10 pm
911 was an inside job! We’ll never investigate anything.
[Reply]
October 1st, 2008 at 1:34 pm
I don’t normally believe rumors until they are officially denied.
Friends, pay close attention to trading in GE today.
——————————–
GE Spokesman: Commercial Paper Funding Has Gone Smoothly
Last update: 10/1/2008 12:27:58 PM
By Bob Sechler and Romy Varghese
Of DOW JONES NEWSWIRES
General Electric Co. (GE) said Wednesday that demand for its commercial paper remains solid, adding that it’s unaware of a reason for a substantial rise in the price of its credit default swaps.
“Despite current market disruptions, our (commercial paper) funding has gone smoothly,” GE spokesman Russell Wilkerson said in a prepared statement. “We have overfunded every day over the past several weeks, including today, with good demand for our paper in term maturities and good pricing.”
Credit default swaps on GE - which are privately negotiated contracts - hit a record high of 740 basis points earlier Wednesday and are now trading at 650 basis points, according to broker Phoenix Partners Group.
That indicates that the annual cost of protecting a notional $10 million of GE bonds against default for five years is now $650,000, a substantial jump from the $555,000 annual cost seen Tuesday, according to credit default swaps levels from credit information specialist CMA DataVision.
Meanwhile, GE shares were trading recently at $23.50, off $2, or 7.9%, from Tuesday’s close.
The spike in the credit default swaps is a further indication of “the rising risk in these operations,” wrote Tradition Asiel Securities analysts, who also noted increases for the financing arms of several other industrial firms.
“Financing costs remain prohibitively high, forcing these operations to offer credit at a potential loss or risk losing a potential sale,” according to Tradition Asiel.
Meanwhile, another market participant attributed the CDS moves to possibly being a “one-way trade,” while others cited the concerns over GE’s ability to access the commercial paper market, an important source of funding for companies’ short-term needs such as payrolls and rents.
Regardless, “We see no reason for the defaults widening,” Wilkerson, the GE spokesman, said in a prepared statement, referring to the CDS moves.
GE unveiled a number of dramatic steps last week to shore up GE Capital, its big financing arm, and protect the company’s triple-A credit rating. Among other moves, GE reduced its third-quarter earnings outlook, suspended its stock buyback and announced it will keep its dividend flat for the first time since the 1970s.
Wilkerson said Wednesday that GE has successfully reduced its commercial paper to below $90 billion at the end of the third quarter, “in line with the target we communicated” during last week’s announcement.
“Our (GE Capital) commercial paper program and investor base remains diverse with 15 programs and issuance in the U.S. and 10 other currency markets,” he said.
GE Capital’s bonds haven’t deteriorated as significantly as the unit’s credit default swaps.
The most active bond listed on Market Axess is a 4.125% note due Sept. 2009 that has a risk premium of 441 basis points. On a 5.875% bond due Jan. 2038, the risk premium has increased by 61 basis points to 452 basis points on seven trades.
-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com
-By Romy Varghese, Dow Jones Newswires; 201-938-4287; romy.varghese@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today’s most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=cN9izTttzEYnp%2BVDiKDWSA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
October 01, 2008 12:27 ET (16:27 GMT)
[Reply]
October 1st, 2008 at 1:44 pm
Craig, what are is thought on AAPL for a quick play?
[Reply]
October 1st, 2008 at 2:06 pm
Don’t really have any. The trend is lower. I do not want to call a bottom here.
[Reply]
October 1st, 2008 at 2:15 pm
I’m not sure it is worth the risk. May get bump thru tomorrow, but I think all retail is dead for sometime.
[Reply]
October 1st, 2008 at 2:05 pm
http://img180.imageshack.us/img180/3777/picture6ky4.png
Tanking forthcoming.
[Reply]
October 1st, 2008 at 2:22 pm
I am going to assume you are referring to the break of the fib line with this chart? If so its not uncommon for a shake out under the break and then a move higher. A form of bear trap if you will. It doesn’t mean it isn’t a valid break and we’re not going to head lower from here but you have to be aware that it could be a false move.
If you are going to play very long term charts then you could take a partial positoin on the break and add to that position once it has confirmed the break. Alternately if it does end up being a bear trap then you could cover with a smaller loss. Just a possible risk/captial management suggestion, trade it the way you are comfortable.
[Reply]
October 1st, 2008 at 2:10 pm
Craig, is that an H&S pattern on the minute chart JRCC?
[Reply]
October 1st, 2008 at 2:14 pm
Only if you kind of squint at it and tilt your head a bit. You could make the argument that there is one forming but that is being a little optomostic.
Long trade on JRCC is also a very high risk play today with daily and long term trends both being down. Not impossible just a lot higher risk.
[Reply]
October 1st, 2008 at 2:14 pm
Could be. More reliable at the top of a rally as opposed to the bottom of an extended selloff. Not a pattern I would trade on.
[Reply]
October 1st, 2008 at 2:19 pm
Thanks guys, I’ll leave it alone..
[Reply]
October 1st, 2008 at 2:28 pm
Wauw Sure glad I asked you guys..
JRCC rallied from 19.89 to 20.56 in a couple of minutes..
Right where I wanted to go short.. Saved me a bunch there
Thanks..
[Reply]
October 1st, 2008 at 2:29 pm
Hey Ruben looks like you got the call right. Break out from the downtrend line (neckline). It also broke the horizontal with excellent volume expansion. It would still have been a very risky trade but looks like it might have some legs after all. I would watch to see if it can hold that 20.45 horizonal support. It’s still going to be a risky trade.
Classic example of risk management keeping you out of what would have been a profitable trade. Don’t let this example fool you because 7/10 times risk management is going to save you from a bad trade.
Nice call on the price pattern, I guess I will need to get some new glasses or something.
[Reply]
October 1st, 2008 at 2:32 pm
StockJock,
I think Ruben was looking to short.
[Reply]
October 1st, 2008 at 2:39 pm
Jock,
Craig’s right.. I was about to short it on a H&S pattern..
I had to ask here cause I was very sceptical on the pattern aswell.. But these patterns are seldomly picture perfect.. And this one didn’t make the move..
Huge volume there though.. 50MA is also reversing upwards on the 5min..
Not taking any overnight positions, but I’ll keep an eye on this one tomorrow..
[Reply]
October 1st, 2008 at 3:15 pm
Ok larger H&S got it now. Wow maybe I really do need new glasses.
JRCC is a very large moving stock, which is why i like to play it for daytrades, just make sure you consider your personal risk tolerance and take a suitable sized position knowing that this is a high beta stock.
Cheers
October 1st, 2008 at 2:16 pm
AUY looks good on 60min. AEM and GG have better daily charts.
[Reply]
October 1st, 2008 at 2:19 pm
Thanks Mike. I agree with you. I think AEM looks the healthiest.
[Reply]
October 1st, 2008 at 2:26 pm
there goes gold and oil
[Reply]
October 1st, 2008 at 2:27 pm
If GE has to raise 15 billion to thwart credit problems, and faced some hurdles in doing so, how many more companies will even make it through this crisis?
Also, did anybody catch Buffet saying “we are in terrible, terrible, terrible” crisis?
[Reply]