N r2k 773.60 - 791.00
O GLD 65.66 - 66.92
O QQQQ 49.95 - 50.39
O ECA 64.54 - 65.66
N SPX 1450.00- 1478.32
O TSX 14114.38 - 13906.11
I have sold my stocks bought yesterday. 2.5% in 20 hours(why wait 12 months and get 4%?) is good yield for me, Investors you do not have to do it... but use your judgement.
Dear R'K. Do not you love this, we make money on Longs, not just Shorts...
Jim Taylor, JD said...
Hi Boris, Hi JD!
Jump off 9409 97 sq late yesterday now ending.
Resistance:
13399
2563.5
1473.5
SHORT through: 08:07
Jim
8/02/2007 7:05 AM
Jim Taylor, JD said...
Bounce off 1464 (08:07) ends by 10:07
Short at 2576
Jim
8/02/2007 9:41 AM
15 comments:
Hi Boris,
Jump off 9409 97 sq late yesterday now ending.
Resistance:
13399
2563.5
1473.5
SHORT through: 08:07
Jim
Dear Boris......I followed my roadmap and was short into yesterday. My roadmap calls for re-test of lows next week (SPX even lower) and then BUY through end of year. CONGRATS on your calls as well.
I do look forward to a possible update of this chart you have
http://www.safehaven.com/article-7106.htm
As I recall, you are looking for lower highs off these early August lows ? (ie longterm top is in ?)
Dear RK, good for you. And thanks god, we can have intelligent, civilized conversation. I will update the chart soon.
GOod Trading to you .
Bounce off 1464 (08:07) ends by 10:07
Short at 2576
Jim
Gees JD you hit it right on again
Great call!!
g'day boris. do you have a forecast for where the $US is going against the chinese yuan - doesn't need to be specific/detailed (i.e. don't go to any trouble), just your general thoughts. thanks.
good to see u back rk.
john b are u out there: fed today had 2 operations: $5b at 0830 and $12b at 0940, for daily net of minus $2.75b. do u know if there is any significance to the fact of 2 operations, rather than just conducting one?
Dear Malcolm,
The info you requested is worked on. Will get it to you soon.
GOod Trading
Malcolmm,
I don't read too much into today's operation. Overnight or term repo, the effect is the same.
Remember though that the treasury came in with $7 billion also.
I am not having a good feeling about the market. Just remember that there are two sides to the investment equation in stocks. First is the value of the underlying company...and we're all tired of hearing about how undervalued the companies are and how much cash they have. But no one addresses the other side of the equation, except people like Boris.
It does not matter how good or bad the stock is on a fundamental basis. The owners of that stock also must be able to continue to hold the stock...which gets a little tough when margin calls hit and there is no place to get money.
Be careful and remember that for all the liquidity, there is a corresponding liability, which must be paid in cash
John B
Dear John B, we missed your (almost) infinite wisdom. You, know so much , yet you know what you do not know best. That is what makes every one of your comments priceless.
Good To see/hear you back.
Good Trading
thanks john. i'm trying to get my head around this while fed/treasury deal.
many years ago i played in a reasonably serious but not massive weekly poker school with a core component but changing cast of floaters. cash game. then one night a regular got tapped out and was allowed to go on the book. IOU at the end.
bad mistake. with the opening established, it meant that in future weeks other people felt free to go on the book during the night and then hand out IOUs. each week, IOUs would be netted out against each other and consolidated among the permanents. floaters left with cash or left their cash.
the pots began growing steadily over time. the game was destroyed. being a slow learner, it took me a little while to work out what the dynamic was.
those of us who were honest or stupid and regarded others' IOUs as a meaningful promise were at a disadvantage. blokes who got deeply in the hole and decided they wouldn't necessarily honour their IOUs had an edge. in big pots they were betting their monopoly money against our real money.
you can see their strategy: if they won big they'd be able to honour their IOUs. and if they lost, well, they'd already decided their IOUs weren't a real liability. (obviously, there were no leg-breakers among those holding the IOUs!)
somehow i get the same feeling about the markets game. no leg-breakers here either, because the nominal enforcers are slipping cards to the IOU crowd.
i suppose what it comes down to is that i'm trying to understand the details of how the game is fixed.
....
saw an entirely speculative suggestion when bear stearns' problems emerged some weeks back that all the derivatives "toxic waste" would be moved into a single place (JP Morgan was nominated as a likely vehicle) and secretly neutralised with fed/treasury connivance.
IOUs cancelled. the game must go on.
as far as liquidity goes, marty chenard at stocktiming.com had this to say in today's preview:
"The Market Bottom is being tested. A big problem is Foreign selling of our U.S. securities
as they worry about sub-prime problems AND a falling Dollar which gives them a double
whammy on losses. Bernanke is really trying hard to be proactive on both issues and is
actively increasing Liquidity. There were two occasions where Liquidity was pumped in
yesterday, and most notably was at the very end of the day.
"Selling pressures remain high, but short term Liquidity is looking very close to turning the
corner to the upside. The problem with Fed liquidity injections is that they are offset by
Foreign outflows, so that means unusual amounts need to be injected. At the same time,
Bush has come out with statements that he is behind a strong Dollar, and it looks like
the government is close to turning the Dollar back up on the short term. (See the first
three charts on the Dollar and Liquidity.)
"So we have a mixture of conditions today ... U.S. and Foreign investors in real fear, and
the Fed increasing liquidity to turn things back up. This critical battle will likely continue
for the next two days and will result in continuing high intra-day volatility. The Fed's
battle to turn things around doesn't end until fear subsides and investors feel confident
that the bottom will hold. Pit traders have described the fear in the last 3 days as
"cold fear" which is an event you need to find and sustain a bottom."
chenard has a free daily comment that you can subscribe to at his site. it's a good introduction to his work.
Malcolmm,
I was a money manager in fixed income for almost 30 years until 1997. At one point in the early 90's I had a book of over $1 billion all in derivatives. I doubt you will ever find anyone else on the internet with as much experience.
Your analogy to poker is interesting but WAY too simple. But what it does point out is what my father told me over 50 years ago...don't gamble with friends, they become enemies too quickly. Only gamble against a house...and here we have the biggest house of all.
You cannot "place" all the bad instruments into an entity and try to have the FED bail it out. That's not how it works.
The only thing that could be done, is for the FED to buy all the bad loans from the market. But that would cause the dollar to crash, worse than it did in 1987 or 1998. The FED would be rewarding greed...not the image it wants to project and certainly not one the foreign exchange markets will tolerate.
In addition, image what would happen if the securities in fact did not default!! Theoretically, we could be stuck with a massive tightening of monetary policy accidentally.
If this gets much worse, what you may see is a resurrection of the old Resolution Trust model. But run properly, that could be a spectacular money maker.
Do not get blinded that these securities are all in default...quite a bit are but maybe not as much as is being touted. What is at the heart here is how to mark them to market...a very different subject.
In 1995, I bought a lot of the securities liquidated from Orange County. I made a fortune for my customers because I did not believe the marks. Everyone of those investments matured when they were supposed to and paid all the interest due. In a market of 5% rates, I had a total return of over 14%. And the losers were the residents of Orange County...all because some government functionary wanted an advancement.
Sorry to be so long, but I do believe we will muddle through this mess also...it just may get a lot more messy.
Good Luck
John B
Dear John/Malcolm,
Now, where on earth , are yo going to find this much brain/fire power and experience talking to you as you gentlmen deliver below. Bravo.
Our readers thank you and will remember you and will want to come for more...
As for me, I can hardly express enough gratitude for making this site come alive with your truely masterful discussions.
Good Trading
Hi Boris,
Bounce off 13341 and 2551 at 07:45 PDT now OVER
Jim
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