Friday, November 21, 2008

Early European Trading


c - Citibank +21%
cs - Credit Swiss +16%
gs - Goldman Sachs +6%
Ok, my take on why the market is not able to rally from the mid day decline.
1) The level of 777 which we EYED as a very possible stop level for the bear market has not been reached. Now, this is about the area that stopped the 2002 bear market as well. So, it was clear that our confidence in having BOTTOM was never very high until this level was reached. We thought , here and there that we could get away without getting there, but never declared bottom in place. Now, this level was known to us for a very long time and there was nothing surprising in it being reached. We alos, know from YBR , that nor was the time portion entirely complete until our Last YBR date for next 6 months, which , actually flows into next year!
2) The late rallies do not happen among other things because there is a big contingent of retail that is trying to buy the market as soon as there is a little sign of a rally in the market. So, the sopitalists abort every rally. Now, it is entirely possible that to prevent the RETAIL getting on the stock market moving up, SOPITALISTS will rally the market not from INTRADAY low ( historically how it was done), but overnight, which is how it may work today, where market is up almost 4% from the lows of yesterday. This way the USA RETAIL , at least, will not be able to hop on the going train. In any case, this is my own train of thought for what its worth. We do express now a much higher confidence of the possible low being in for the market than ever before and that is because many of our "requests" have been fulfilled. Area of 777 +-30 points has been reached. Next area of significance is under 500 on SPX and that would be a disaster, if it comes. BKX and USO(oil) hit the needed capitulation areas. Bear is getting closer to exhausting the "bear time" allocated by YBR.
3) Certain Currency levels being reached fortify our confidence that finally this phase of the dollar rally maybe over and that is what the cheaf ANTIDOLLAR ( Mr. Market) loves.
conclusion
So, all of these makes us more hopeful for the market prospects. Now, having all of that said, we think we may have a strong recovery or slow recovery in the markets. Therefore the dividend strategy. Slow or fast, dividend pays for waiting. There is no better cure for a long meandering markets than DIVIDEND

6 comments:

John said...

Boris,

good morning

I see another bus has come. I think I will get on it at the appropriate time

old john

John said...

Boris,

Question about TBT- which shorts the 20 yrs bond??

old john

boris said...

Dear John,
Good MOrning to you.

Yes, our bus is coming pretty regular here(:-

Good Trading
TBT. I would say that you short TBT just the way you long stocks.

I do not think you will go wrong.
Same idea not confidence in stocks means confidence in bonds and the other way around. While this lasts.

There will com time when there will no confidence in any of these, but for now that is the formulat. So, use the SPX as your clue for TBT

Good Trading Dear John

John said...

Boris,

thanx--

old john

Vishal said...

Dear Boris, Good morning/afternoon

Could u please clarify what u think of the YBR/WBR pointing to where they are pointing at least until mid December and again until Feb 2009 ?

Cheers.

boris said...

Dear Vishal,
Do you have EXCEL file for YBR.
It has all you need.

Ok, I also had the note about YBR. It is still there in the Psite.

Let me know if something is unclear.

I would prefer not to give this away over this open site.

Thanks and Regards, Dear Vishal