At some point people will get giddy as there is a $15,000 handout to any person who wants to buy a home coming in the stimulus 2.0. They'll run up housing stocks talking about bottoms in 6 months. We'll sell. At some point they will realize no bottom coming; they'll sell. We'll buy. Yawn. I don't even bother to use technical analysis on a company like this. Buy panic sells - guesswork where they bottom; sell euphoria - guesswork where it tops out. Rinse. Repeat.We're back at S&P 840 so I have no conviction either way as the index is now back in the middle of its range (roughly 800 to 870). White noise area and I need to balance my book with some long positions in case the next direction is up. Took some profits on the ETF shorts (that were underwater). We're on a road to nowhere fast. And stuck here. After a miserable few days last week watching the market surge 5% while we were flat, today we're flat with the market down 3%. I seem to be perfectly hedged if nothing else. Ultimately I'd like to be a bear south of S&P 800 or a (ahem) bull north of S&P 880 but we're not getting the chance. We're stuck in nowhere land.
For any of us who trend trade or buy breakouts this past year and has been heartbreaking -- once the commodity trade died last summer. That whole style of investing has gone out the window. So now you buy dips, sell rips. And keep repeating. The problem is some of these dips have no bottom to them which is why I hate the style. But this is the only thing working.
The Casino bars anyone with more than a 7 day holding period.
Now we await the hype about the stimulus plan as a reason to talk about mustard seeds....
Long Lennar in fund and personal account
6 comments:
You are truly a gutsy investor.... For the same reason, I bought a couple of calls on FAS at the close... Put your money down and spin the wheel!!!! jegan
FYI - You were referred to in the last paragraph on this article:
http://thetechnicaltakedotcom.blogspot.com/2009/02/technical-take-copper-and-shanghai.html
Ah it's a 2% stake in something that is down 26% in a day and a half
If I was brave I'd be out there buying FAS (almost did in personal account) at 3:55 PM or Morgan Stanley (almost did for the fund)
You know Morgan and Goldman are going to become massively enriched franchises off the back of these bailouts.
I suspect that GS and MS my have a harder time **converting to a bank** and possibly (who knows in this market) the BAC and WFC may have an edge on them.
It'll be interesting to see how my FAS calls look in the morning....
jegan
I don't think MS or GS really want to be a bank. With Fed behind me I doubt they really need to other than for show purposes.
Good job on FAS
I almost did FAS and MS as I wrote above - both went up 10%. This market has unfortunately taken the risk taking completely out of me.
Suspect FAS has some healthy upside ( retracement to $9.75) When the Stimulus bill passes (NPR reported that both Houses have agreed and will probably vote tomorrow... Course we have been though this before with disastrous results in the first TARP bill) and when the Congressional Bank hearings are over... Supposedly tonight at 5PM.
Agree that neither GS or MS want to be banks.. What else can they do? Beggars can't be choosers.
Not sure if you caught any of the puffery or lame excuses during todays hearings. I didn't listen, but caught the CNBC **Newsflashes**:
- Jamie Dimond "Didn't think things looked too bad last year"
- GS " Didn't expect housing to impact the economy"
- MS "We agree that compensation should be regulated"
- MS "I'd be here whether or not I got a bonus"
... And the kicker.. Paulson was aware in August that the credit market had a major problem.. Which lends credence to my opinion that George Bush just didn't want to be told about problems and was pretty much oblivious by choice. "Nero fiddling while Rome burns"..
jegan
No, I don't get CNBC
When I see the market move 4% in 30 minutes I realize its CNBC and their "songbirds" so I go to CNBC.com
unfortunately CNBC has become required even though they are a disservice to any real investment
the GS one cracks me up. A nobody like me knew it was going to affect the economy; they are the smartest guys on the Street.
I remember one of the permabull economists in late 2007 saying housing is only 4.5% of GDP so what does it matter. He was not from Goldman. This tells me it was group think on the STreet.
GS and MS will continue their base advisory, IPOs, consultations, bankruptcies, debt offerings, and the like. Some of the smaller players like LAZ and EVR will step up but they've made the pie more concentrated. Paulson did his job pretty much to perfection - 1 competitor dead, 2 competitors hobbled; only 2 big boys remain.
And this is why they send GS folks to Washington.
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