Thursday, July 10, 2008

Rally time....?

OK, so FNM and FRE are heading to my target of under $1 in a hurry. LEH is in trouble, and oil ran up over $5!

BUT, the market rallied a wee bit nonetheless. I said it the other day, this is make or break time here. I think we should go a LOT lower near term, BUT watch GOOG here. They have earnings next week on the 17th and the stock could get a nice boost into it just based on them going up like 90 points after last quarters earning.

I'm not gonna write much here, I think the rally we got today and we might get Friday are based on very low volume and I think until we get a REAL washout day with SOME capitulatory action it's going to be very hard for us to get more than these dead cat type bounces.

Just stay limber and stay CASH rich. There is no reason to get into the market here other than for a trade, so heed that, or peril awaits!

See ya manana! Good trading!



TheBeerGuy! said...

Hey Waxman, how's that rally we might see on Friday? Good thing "might" was part of the forecast. Words and phrases like might, should, possibly, most likely, etc. need to be included in all market forecasts currently.

Regardless, I think the Fannie/Freddy situation, which everyone saw coming is the last shoe to drop in the financials, at least among names that matter and we "might" (LOL!) get a bounce from the 11,000 level in the Dow next week.

What concerns me the most with Fannie/Freddy is IF Big Brother consumes these entities, you can basically forget the housing market for the next 10 years as regulatory measures, especially the manner in which banks can extend credit (mortgages) would be quite cumbersome to say-the-least.

Anyhow, this situation should not impact to a "great degree" how many iPods and BlackBerry's are sold for example and the utter cataclysmic market events you forecast seem to me a bit far-fetched.

I'd be long on Monday as we're overdue for a corrective move to the upside. As far as extended downside, I see the Q's bottoming at $42 and the Dow stabilizing in the mid 10k range.

I also think this commodity jiz is going to crack, oil trending down to $120 and stocks such as POT getting shot.

Newtogoogle said...

Does anyone have any suggestion how to take advantage of an index that follow the Hong Kong HSI,

Perhaps exploiting the difference in time zone .
-I doubt it, because it would be too easy and such inefficiency would be closed.-

Nevertheless , I keep trying and so far , as I put together a candle stick chart translucent on top of each other (.HSI and FXI)I noticed some interesting facts (require further corroboration and study),

When the HSI went up the "previous day" in HK the FXI (ETF) will go up "next day"

When here is Monday, it was already Monday in HK, about 20 hours ago.

I'm studying further , the interrelation of both charts,
side by side, and I have observed
some preliminary interesting facts,- no conclusion yet,-

In fact one month chart is like the same profile of the other , like one the shadow of the other , but not identical in a day by day basis, but when you add a third chart DJIA to the FXI or the inverse FXP , it look to me that further information can be gleaned
to increase the odds .
I would love to hear some opinions on this subject

Note: I apologize for my rather poor English, for I speak it as my second language)

Waxie said...

Beer guy, I was short FNM into Friday, and GS and LM and MER.

I'm not here to prognosticate longer term, though people always ask, and it's good to have a bias.

The last shoe to drop, fyi, will be the COMPLETE collapse of the US banking system as we know it. I think there is a better than 60% chance that happens in the next 12 to 18 months. Hope I'm wrong, but I think you will see banks close - ALL OF THEM until things are revamped. Yep, I'm the grim reaper. Everyone thinks that there is a last shoe to drop. There's no such thing, sorry. We'll get bounces, of course, but they will be dead cats at best for a while. The DOW is headed to 7000s, when it gets there let me know.