I said earlier that if Merrill (MER) goes it will be interesting to see what they do to Morgan Stanley (MS)... well right now it's not pretty. Even Goldman Sachs (GS) is being destroyed. Those are the 2 last independent investment banks. Both report in next 2 days and along with the Federal Reserve meeting - anything can happen. We could be up 3% or down 3% tomorrow. The action continues to be dangerous as I've been saying week after week.
Goldman Sachs (GS) is before the bell tomorrow so something positive there, along with hopes for a Fed rate cut could turn this market on a dime. Or not. Such binary action - quite amazing.
Morgan Stanley and Goldman Sachs were both down around 14-16% before "rallying out of thin air" to only be down 7-11% -- hmm, how curious ;) Again I would not be surprised to see a number from Goldman that "they" can use as an excuse to rally this market up 3% tomorrow. It happened just a week ago - up 3% on Fannie/Freddie bailout, and then lost it all the very next day. Curious forces are at work behind the scenes.
We do indeed live in interesting times.
EDIT @ 4:10 PM : that was a very weak defense. We had one bounce there @ 3:30 PM right at 1200 and then just a tailspin into the close. That bodes very ill. If not for Goldman possibly providing some knee jerk bounce tomorrow I'd be extremely negative. We'll see what they have up their multiple sleeves. p.s. could someone tell me why financial stocks rallied from July 15th forward? Also can one pundit who showed up a week ago today telling us the bottom was in due to bailout of Fannie/Freddie please show his face and say "oops"? Just one?
Here is today's action
p.s.s. we've had a rough time of it of late as we've been high in cash levels, hedged in areas the market is running up on "thesis" instead of fact, and our long positions have not been treated very well in this market of "buy financials because the worst is behind us" and "buy consumer discretionary because everything will be fine in 6 months - but only in the USA as the rest of the world crumbles - so sell global growth stocks". So we lost some money today but I'm confidant compared to most funds readers might own we outperformed just about any equity fund out there. Small victories I suppose.
Now the danger is tomorrow could be a complete reversal of today, as this market has no memory from day to day, and the market could be up 3% and we look like a laggard again. Or it could be down another 3%. Who knows. VIX crossed over 30 at least (volatility index) - over 30 has usually signaled fear is high and we are close to an intermediate bottom.
5 comments:
I know that it doesn't matter in this market but I've seen something of interest in the last IPI press release.
The sentence that caught my attention is:
"The Company is also reporting that it expects its net realized price per ton of potash for the third quarter to be approximately $620 -- $640 per short ton."
source: http://www.tradingmarkets.com/.site/news/Stock%20News/1882439/
In the results for last quarter, I recall that the price was much lower. I've found the quote:
"Average net sales price for potash this quarter was $425 per short ton ($469 per metric tonne) compared to $182 per short ton ($201 per metric tonne) in the period a year ago."
source: http://www.tradingmarkets.com/.site/news/Stock%20News/1825089/
What is true for IPI should also be true for MOS and POT.
P.D.: Tough market these days!
You're right. It doesn't matter :) But thanks for presenting facts. Facts that are ignored. Don't you realize the market is telling us potash prices are going to be down 50% next year? Or wait, maybe it's just telling us we have a very overlevered system full of hedge funds with little risk control and panicked investors who sell everything at any price?
Ok, I vote for potash prices falling 50% next year ;) That's easier to explain to the masses.
Very true that with VIX crossing 30, any good news from GS will rally the market. Also, any positive news on AIG that points to them avoiding BK will be huge as well.
I'd say that the market is definitely at that tipping point where it'd either rally (maybe for good) or plunge way down. Has that ever happened with the VIX above 30?
The VIX is relatively young
VXO is an older measure - to put it in perspective its peaked around 35-40 during the past year
In the old days during bears its gotten to near 60
There is no reason VIX cannot go to 40+
p.s. you seemed a doubter about the ills of the market in the past few weeks? any more convinced this is pretty serious?
Where would we be without the government at this point? Can you imagine a dying public Fannie/Freddie on top of all this mess?
"p.s. could someone tell me why financial stocks rallied from July 15th forward?"
Was that a rhetorical question? You know it was the Govt Bailout news to save FRE and FNM.
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