Friday, January 22, 2010

CARRY TRADE UNWINDING...SEE YA OTHER SIDE OF 10k quickly...plus clarity on my comments yesterday!

I've been talking a lot about the CARRY TRADE to Marketcast and Trendfund.com clients for a while now (and on my radio show on www.chataboutit.com). I told my Marketcast clients on Tuesday that I believed it was now upon us. I do not own a single stock long (other then UUP which is because I think the dollar should continue to rally for a while). Today we had AAPL puts for Option Trader, which frankly has been killin' it with the ideas!

Markets trend higher and over periods of time they usually stutter step to new highs of that particular move over time.

One thing that is historically true is that down moves in the market usually happen a LOT quicker and are more vicious in nature, often leaving investors scarred for life, or broke.

I think the carry trade is basically done. That doesn't mean we won't get a nice oversold bounce sometime next week, cause we probably will at some point, but I would be looking to short it from here. I think the highs of the year are in for a while, 1150 on the S & P looks to be a very tough # from here.

Every stock I can think of worth anything (other then EBAY I think) that has reported earnings this quarter so far, and granted the season just started, has been clobbered off the report, or quickly thereafter, some with devastating moves. GS blew out and is down HUGE from the #s (how do you blow out better then $3 a share above consensus!?). GOOG bamm, JPM, AXP, COF bammo.

It's time to look for opportunities on the short side. For Stock play of the week this week I called SRS, its up 10% in a week for us basically (a little less). And for Option Play of the Week we called VNO puts, which are up over 100% in a week I believe.

I'd be looking at SRS to continue higher, that sector is VERY vulnerable. SKF if it can bust $25 here could see $30s in a jiff. We are now officially oversold, so the bounce might be a better play, or at least safer one. As a trader you can afford to pick your spots and one thing that seperates us making money vs. losing is to be on the right side of the field with the wind to our backs. Since March that side of the field has been the BULL side. I believe we are now on the BEAR side of things and we need to stay there until 1150 is cleanly taken out.

Remember, if you are wrong on a trend move you can only be wrong once, if you are right, and I believe we are, you can be right for a long, long time.

RULE folks, RULE!


CLARITY ON YESTERDAY'S BLOG COMMENTS! I got several emails angry because they felt I was saying that Obama was responsible somehow for the Supreme Court decision on corporate campaigning that I think is a travesty. If it came across that way, I didn't mean to tie the two together. I am NOT a conservative. I'm a liberal and have always been if anything, but I do not consider myself a Republican or Democrat at this point. I am completely independent. I think the parties are antiquated and its unfortunate we don't have any true visionaries that I can see in politics at this point.

The Supreme court decision yesterday can easily be traced to the Bush administration because of his appointees that tipped the scales to the right. I am well aware of that.

My issue these days is that there is little or no real difference between the parties since they both seem self serving to me. I just had to clear the air since I got accused of being like watching FOX Television, which no offense to anyone who differs in their viewpoint as I enjoy hearing everyone's thoughts (for the most part), but I doubt Glen Beck will ever have me on his show unless it was to go after me somehow.

I grew up in NYC and my mother was on and off welfare throughout my childhood at times. We are formed partly by our environment growing up, and it would be tough for me to be considered a conservative. As I've grown up I consider myself somewhat of a fiscal conservative, but whatever. I don't want to politicize this blog, I enjoy stirring up thoughts and provoking discourse and if I can do my share of that then I consider it productive, stocks or otherwise.

Hope that clears up my commentary yesterday. I think its appalling that corporations can now skirt donation limits and laws currently in effect now and basically be for sale to use their bankrolls to try to help shape elections. I'm sorry, elections are not supposed to be for sale. And, yes, I know Mike Bloomberg spent a lot, as have others, and that helped or one could argue secured victory. That's for another blog discussion, they aren't publicly traded people. There needs to be, in my opinion, a separation of corporate policy and political policy.

Have a great weekend and next week is D-day in this market, we shall see if they mount a rally, or we roll over and 9500 next stop...tune in and I'll try to keep you informed!

RULE

WAXIE

1 comment:

elchino said...

Ok my Fox news comment was a stretch. Appriciate the clarification. that was a quality post I admit