Quick alert for you folks out there. I know trading can be rough but remember that Thursday is Valentine’s day. If you do have a special someone, it probably would be a good time to send some valentines day flowers. I mean, you’ve been smart in this bear market right? I wish I’d be able to take my own advice, but I’m heading on a cruise right after the wedding so in all truth and honesty, I’m tapped out! But please, don’t forget. Send flowers, a bear, chocolates, anything. An unhappy spouse makes for a distracted and unhappy trader. With the wedding coming up, my time around here will be a bit scarce so I’m just giving you all heads up. Have a great week and stay safe. And take her (or him!) out to dinner Thursday!
Saturday, February 9, 2008
Alert: Valentine’s Day Thursday
Weekend Reading – February 9, 2008
Let the countdown begin I think. 14 days to go. 2 chapters of my PhD must be completed by then. It’s crunch time! Always nice to have something to read in order to take my mind off things. Here’s what I’ve seen this past week. Enjoy!
- I can’t stress enough. Take profits quickly. I paid for it by not doing so Friday. The market taketh just as quick as it giveth.
- Microhoo is no more! For now anyways…
- Google potentially buying C|Net? I don’t particularly care for C|Net but that’s just me.
- Free financial books from the Falkin Investing Organization. Get them while they’re hot!
And finally, Eric Bolling’s interview on Wallstrip. I never got a chance to see him on Fast Money, but I’ve heard he’s been missed dearly. I do like Karen Finerman though. Have a great weekend!
Friday, February 8, 2008
“Bearish”
Saw someone post this on Option Addict a little while ago. I thought it was pretty good. Enjoy!
Futures Down; No Confidence in the US Economy
Over the past week, Fed governors and other officials involved with the FOMC have stated they have very little confidence that the US can avoid a recession. The official definition of a recession requires two quarters of negative growth. If the Fed isn’t certain about the US avoiding a recession, why the heavy rate cuts with the possibility of inflation increasing?
Most mortgages taken out during the housing boom were executed in or around 2005. Why is that important? From what I can tell, most folks around that time took out what’s known as a 3/1 ARM, or adjustable rate mortgage. In other words, after 3 years, every year after the initial 3 year period, mortgage rate for that contract will adjust. By the Fed cutting interest rates dramatically, I think they’re essentially bailing out those who jumped into the 3/1 ARM for whatever reason. Granted, some hard working folks may have just gotten in over their heads and could use the extra year to either relocate or refinance. But my guess is the majority of those benefiting are the real estate speculators. Why is it that people which took a chance on an investment are being bailed out? You don’t see that happening with investors on Wall Street or any other investment vehicles.
In any event, futures are down this morning from more comments from Fed officials about the potential for a recession. I’ll probably sit the rest of the week out since the markets have been extremely choppy as of late but it’s hard to resist taking at least one trade.
Wednesday, February 6, 2008
Super Tuesday + Market Action Yesterday
So yesterday was Super Tuesday where a heck of a ton of states voted in their primaries. From what I gather, Super Tuesday normally clears up front runner status for both parties. Just like the markets, Super Tuesday really didn’t answer much in terms of the Democratic race with Clinton taking a small delegate lead over Obama. Republicans were a bit clearer with McCain taking a sizable lead over the other two candidates (three if you count Paul). Seems like the country as a whole has no clue who they really want as president yet. So now we have a frustrated voter block and a frustrated market with no clear direction in sight!
After the ISM numbers were released early yesterday, the markets never recovered, losing 370 points in a broad bloodbath. After the bell, Disney (DIS) reported outstanding numbers. I think that may be part of the reason we’re seeing a moderate bounce in the futures this morning, up about 40 points as of 08:00. I wouldn’t be surprised if inter-meeting Fed rate cuts are floating around as well. It takes time to get out of the mess we’re in folks. No amount of rate cutting is going to speed up time. It’s only going to make things worse with inflation. Think $5 for a gallon of milk is quite high? Wait until it starts inching closer to $6. I think we can easily see a gallon of milk close to $6.50 by the end of the year if it hasn’t gotten that high in some places.
Good luck today. I’ll be in and out working on 1,440 Excel tables for my research dissertation so forgive me if I’m a bit distracted today… sigh…