OK, folks, today was what I expected for June, we are looking more and more like a breach of the March lows is coming sooner rather than later on the DOW and I expect the Nasdaq to follow suit. Technology won't hold up if the rest of the economy tanks. Unfortunately thats the way its shaping up.
We're looking at shorting FINANCIALS (kill the lowest hanging fruit first!). Then we'll go from there. LEH is gonna get cracked, GS is cracking already and the banks are pretty much doomed here, I believe. Every #s report they rally us HOPING that the # will show that the economy is finally turning! YEAH! NOT!
It's not gonna happen, sorry. I wish I were wrong, trust me. It impacts me as much as it impacts everyone else. The value of my money is less, and keeping you guys happy is harder. But, reality trumps hope!
I suspect unless there is some news we get a gap down (a gap up would be a serious short without any substancial news!). If it gets ugly we could get a near term capitulatory move and then an up move and then a nice bounce. Volatility is thriving and that should mean nice ka-chingos for us, so stick around and if you aren't a member yet, make sure you take the 2 week FREE trial or join one of our other services. This is a market rife with opportunity.
In the meantime, we're been approached about taking Trend Fund and Trend Trading to Win public, merging with a shell. So, who knows, perhaps we'll be calling our own stock short (that's a JOKE!)! With Investools (the model we're using) having a market cap north of $400 MIL, hey, why not! We shall see, life offers many twists and turns! If anyone has any insights or interest, feel free to email me at - waxie@trendfund.com
I think in this market people need some guidance and a safe place to learn, that's what we do best! I think that the market is going to be VERY rough for a long while for anyone trying to invest. You can listen to these pundits all you want, or you can listen to reality. Reality says the economy is shot for the forseeable future and you need to be SHORT here. Fantasy says you should buy buy buy. Sometimes there isn't a bull market anywhere. Yeah, energy, commodities, but at some pt. the underlying stocks will crack as well. That's been my experience.
I stick with my thought that short LEH, short GS, short some technology (TWM looks like a nice BUY here since its the inverse (double it) of the Russell.
In the meantime, have a great weekend. Peace be with ya, dudes and dudesses!
Michael "WAXIE" Parness
*My movie, CRAZY FOR LOVE is debuting in Blockbuster early next week, pick up a copy and write some nice things, if ya like it, on IMDB.com
6 comments:
Waxie - Speaking of a crappy market, how about a really "crap" stock, BSHF? All that high-priced corn, sugar, pork bellies and soybeans wind up in the same place, your local sewage treatment plant. BSHF treats sewage without creating sludge as a by-product; a major breakthrough in a green world. Another is CPST. They make a turbine that generates power from methane gas that's a natural byproduct at landfills. Would you expect stocks like these to dive in sympathy with a crappy market, or to be good long swing trades since they solve some fundamental pressing problems in society no matter what the economy does? Know anybody who flushes less in a recession? Or, know any towns who don't want to make free electricity from their existing landfills?
Waxie,
What is a person supposed to do with rollover ira money in this market? I know you said I should stay in cash or short but you can't short in an ira and if you keep it in cash it doesn't keep up with inflation. At any rate I didn't listen and lost $5000 on paper today. :( I'm definately not keeping up with inflation.
Someone I work with told me that gold was a buy at $400 and about a month ago told me that CWEI was a buy at $49 (now it's over $100) and I didn't listen. So the other day he told me that BPFH was a screaming buy and I bought some but it is a financial and it trades at $7 and change. (Actually, we work at a subsidiary of BPFH but no insider information) Is your statement about financials directed to ALL financials? I mean how low can a viable business go?
Thanks,
Jeanne
thomas, CPST we have liked since it was low $2s. In fact, it was going to be that or SATC for our first Small Cap Monster newsletter pick. We went with SATC for several reasons and CPST has already taken off big time, so not sure I'd want to chase it up here. The other one I'm not familiar with, but will look into it.
I would also look at ICO as a low priced coal play. margin's aren't that great but they could expand. We liked it at $6s and its up dramatically but may still have some very nice upside.
Jeanne,
I can't give you individual advice. IRA's often will let you buy puts, or if you own stocks may allow you to sell covered calls against your positions so you have a hedge.
Personally I would not worry so much about keeping up with inflation. It's better to earn 3.5% in a bank than lose 50% in a fund! Capesh?
We may be starting a hedge fund, if you are accredited and can afford to potentially lose, you can email me so I have you filed for when/if we do it.
Thanks
Nice blog, couldn't agree with you more. Charts look horrible, ominous H&S patterns on dow, spx, ndx, rut, etc.
Downgrading of the bond insurers will have major impact on the financials, imo, and will only refuel the already broken credit crisis. IMO, this was huge news because it means that billions of bonds that the insurers insure are now worth less and bondholders, like banks, have to write down the bonds to market values. In the case of a bank, it could jeopardize lending limits as banks are required to reserve more capital. Think about how municipalities won't be able to issue new bonds to raise capital if they're less liquid and less valuable instruments. Add to that, the dollar is heading into the commode.
At least the sun is shining today and we've all got our health, LOL.
traderlady, you got that right. This market going down down downnnnn da drain!
But, nothing goes in straight lines, so time to trade is NOW!
Financials are just sunk, they are toast.
We'll see about the rest soon enough!
RULE!
thomas, that BSHF scares me if for no other reason as I get spam emails about it. I will check it out, but usually that spells doom for a stock being legit.
FYI
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