I sold one narrowly held (meaning not everyone owns it) name at the open that is up 20% in the last day and 10 minutes.
Could we close flat today? Is this type of open ripe for a fade?
What do you think?
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11 comments:
I faded in my tactical account; strategic account is hedged to the gills. YMMV
NO way do we get a follow thru today to the upside !! no way Jose !
I was caught short MS and blew out half my tactical account.
This isn't a lifesaver (closing in on a trillion dollars of "liquidity" injected or promised one way or another by central banks since the Northern Rock failure in January) it is a fleet of life rafts.
This is a push-me / pull-you beast: the Fed can't stop market liquidation without the financial institutions using the money to fuel speculative investments in the market. They aren't lending it to home owners, car buyers, ....
As for Un-intended consequences, our leadership can't even see the near-term consequences: the bond market is tanking today. Rates, which the Fed needs to see go down, are moving upwards dramatically. I do not recall being taught that we can have low interest rates and high inflation. The latter must come from either our creditors (where's the Fed going to get the money), or from having deflated the dollar.
American consumer indebtedness inflated the bubble, the national debt cannot produce a soft landing.
As to the Close, i think there are more people that want to get in at the 'Bottom' than there are people selling into rally. The biggest factors short-term: Tax losses for end of year and mutual fund window dressing.
Wow, SEF totally blew up: Trading halted right as I was setting up an arb (rats!).
This has got to be the mother of all government induced short squeezes; see http://tinyurl.com/44nott
I love the smell of volatility in the morning!
Roger, first...thanks for so much valuable insight over the past 6 months - I found your site during my fast learning phase about the market, along with seeking alpha (tough place!). I've always needed a big picture first before I had any chance of learning about something and you've shared a lot.
All I can add is if you're asking - it must be very strange from your well schooled mind. It's sure a wild and wooly time for me in learning mode!
I've bought and sold so much WFC and CTBK over the last few months I have a hard time believing any kind of rally will stick now.
I started out simply focusing on names / stuff I knew were beaten down and paid good dividends. Tried to be diversified as possible and to apply your advice by allocating some for volatility - more after sell offs.
I owe you (at least) a fine dinner if you're ever in Maine. Great luck has been with me for those two picks esp. since I bought again a few days ago. I'm cashing most of those out - way too fast a ride for me!
I have been pretty bearish and I do not think we are out of the woods by any stretch of the imagination. But 800 billion for mortgages, 400B for money market funds, 85B for AIG, 30B for Bear, 200B for fannie and freddie.
Oh I almost forgot a few hundred billion loaned by the fed to banks over the last year.
While I have not turned bullish exactly I did go from 99+% cash to 75+% cash today. While I have never seen what happens when the government throws 1+ trillion at the market, I think it might sustain a rally for a while.
I could be wrong but I am up 13% so far this year and increasing my equity weighting seems reasonable. I think I picked a horrible day to enter but with all this volatility and a vacation next week it seemed necessary.
seg
There's a good chance we saw an intermediate term bottom on Wednesday, but I'll be following my timing model religiously when it comes to adding equity exposure. I also believe the market will bounce around a lot during the next few weeks, but there are just too many indicators out there that point to higher prices over the next 1-3 months.
Roger, I hope you're joking. Surely you're not making day trades with your accounts :)
i don't completely follow,
in and out or out and in day trades, no, but i did sell a tad into the glee
IMO it is not clear if we go higher from here or if Tom K is right and we bounce around and retest first, but no shorting and trillions being thrown at wall street is not a negative for the markets in my mind.
Next year we could see another leg down but there seems to be lots of mojo heading into the year end which normally gives us a rally.
Looks like I need my laptop this vacation.
seg
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