As we know I like to look at the conundrums that face us. (different that the Alice in wonderland notions, but they smell similar.)
Banks have to loan:
- Problem is that the reason banks are in trouble is because the market is taking bets on if the loan loss reserves are enough for the bank to survive.
- If a bank Loans out of the loan loss reserve... Less probability it will survive.
- as part of the deleveredging Some of the corporate debt should be next. Think insurance companies, but also some companies that felt they could just borrow short at 3% forever. They now are having to come to terms with the fact that they have to pay 10-15%. It's interesting that the annualized Dow return is also 10%.... 10% seems like a proper equilibrium(realize that there are 10-20 year bear cycles with 10-20 year Bull cycles, so the Return in the bull cycles is 20% per year)
- CFO's will have to get used to borrowing money in the 6-9% range, and just live with it.
8 comments:
(I'm off work today, so I'm going to make a few day trades.)
Tell me if this thesis makes sense:
QQQQ is at the 38% retracement from the 11-4 high, so it is set up for a drop the next couple trading days. If this is the end of a Wave 4, then the wave 5 should go down below the bottom of Wave 3.
If Q's break above 28.5, the thesis is flawed.
Watch the morning action, I'll bet you can short a regional for a Scalp right off the bat, Buyers are coming in at the open every morning, then there is a sell off, especially with down futures.
now, we may get a Gap fade after the open, into a sell off.
I think most probable is a sell off, but just today.
Remember There are only 2 trading days this month, all the Mutual fund money comes in on the first and last day of the month.... First and last day are Friday and Monday.
My "suspicion" though probably wrong, is that we sell off Today, and go up Friday and Monday. (sell the rumor of bad black Friday, buy the news.)
I expected a move to 90 on the SPY, and I think there is still a possibility of that move, maybe this morning....
Or maybe we correct today, then bounce up to 90 again, then Sell off after Monday (I think we get NFP, Not this friday but the next.
I'm still trying to verify this.
Thanks. I actually agree that we sell off... (so i guess we'll get a big rally!)
The regionals are too rich for my blood and they seem to be breaking our to the upside a bit. The Q's are more troubled.
I'm looking to short BRCM for a buck today.
how about another idea... some kind of "Gap Fade" then a sell off, But then it neutrals out at the end of the day, because people just want to get out of the market and have a vacation.
So, are you saying to look at whatever sector go up on the open and take a short position on a weaker stock in the sector?
My euro trade just blew up on me. I'm going to look to sell some of my regionals that I own, and then look to buy some of them back during the day.
I may short the naz after the open
You have to give that idea that since we and everybody we know wants to go short near term, that the move may not sustain itself.
we could see a huge sell off that reverses
That's what i was thinking. Sentiment at the open looks grim; we may see a decent bounce by midday
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