Thursday, December 18, 2008

SHORTING...

I am putting together my TOP TEN SHORTS and TOP TEN PUT OPTIONS/SPREADS plays of 2009 and will let you all know when the classes will be, figure early January.

I am getting a lot of emails people dying to short. It's tough, I mean on one hand I'm pretty confident we are gonna tank HARD next year, but into Obama the way the market reacts to him (even today we rallied when he was talking!) its tough to short at will. I mean, if you want to buy some March or April or July puts on some stuff, I guess thats ok, but if we do get a pop to 10,000 or even close they will be worthless pretty much for the time being. I like to play TRENDS, thats what I do. Right now the TREND is more bullish then bearish. Even next week we are more bullish then bearish on several trend fronts. So, do I want to start shorting? Well, I see GS at $81 today and I am very yummyish to short it, but when you buck the trends you usually lose, thats why they are trends. Maybe we tank hard next week, but you have 3 trends that go against that happening - WIndow Dressing, January Effects, and the week after FOMC we usually reverse the action of the prior week (Wed/Thur/Fri action). So far that would point to a higher move next week on three fronts. Will we go up? Who knows, this is a freaky market. I'm being honest, this market feels spent, but the trends say otherwise. So, we just have to use money management, go smaller lots and make sure you preserve your capital and not make a trade if you aren't sure of it (as sure as you can be). You know, trading isn't science, its not perfect, but being imperfect is one major reason we can have a huge edge overall IF we pick our spots and play the strongest of the strong. This is a CRAZY market. Look at BUCY for example, AWESOME move for us off initial call, major winner! I sold at very nice profit. BUT, then today it just drops dead. It's just nuts. Look at the moves in this market, its sick. Oil is $36s! It moves like 5 to 15% a day nearly every day, that's SICK! It is possible Oil sees teens. I am not making a call on it, but jeez louise, we are in serious deflation. The problem is that they are trying to devalue the dollar but everyone else is just as screwed as we are, so its like all currencies in the crapper. So, we are stuck with deflation. If I hear one more time that the banks should be lending I'm gonna puke. People don't want to borrow! The Fed is trying to force people to borrow. OK, fine, give me $50 MIL at 1% interest, I'll borrow and trade it!

:)

RULE!

Waxie

5 comments:

kwfink said...

Business people must be able to borrow for normal commerce to occur. For instance, we are selling some of our commercial real estate and the buyer (fully qualified) had to go to over 50 financial institutions to get a mortgage, even though the property has a terrific NOI. Reason? Lenders redlining midwest region, don't want to lend here, blahblahblah. Borrowers are out there but the banks that were recapitalized on the backs of the taxpayers are hoarding. Something's gotta give!

jayalan said...

I totally agree. But Obama himself said it. It is going to get much worse before it gets better. This is a liars, hypers, and hope-ers market. Your advice is on.

Rock and Rule.

mike w said...

Hey Waxie:

I just wanted to say thanks for the blog and the energy that you put into it. In the years before, I often wondered what you were thinking behind the calls and now, here it is: good calls, bad calls, trends; outrage or amusement at the insanity of the markets, the media, or the government; some indications of your sentiments about social responsibility and politics.

Your blog helps me remember where I am in the world and in my trading and this is a good time to have that going on.

Thanks again

mikew

beach2788 said...

Ha, just like I said the MM's picked up all the option call money, of the sheep who went too early for Santa rally. The MMs keep it below 900.

Now that Friday option expiration day is over, better chance of a rally to stick.

Also looks like hedge funds are still selling for redemption money by year-end. Could stifle the mkt till Jan 1st.

FACTOR R said...

This is almost an addiction where waxie comments for today ?