Green Friday Up For A Test
Posted On Thursday, April 30, 2009 at at 6:18 PM by Finance FanaticI can definitely say I am excited to see this trading week come to an end. This transition trading mode that we have been in the past couple of weeks has not made much technical sense and seems to only be benefiting day traders. As I said last week, I expected the next week or two to be a good environment for the FAZ/FAS double trading. It does require knowing approximately when in the day you should sell and where the bumps are, but with the last week, investors have been able to make significant profits on both FAZ and FAS on the same day multiple times. Now, most likely, this trend will not last, as I expect a more directional moving in the market to return shortly, but it has worked out quite nicely for many of you day traders.
Chrysler made bankruptcy official today as it will look to experience a "quick" bankruptcy reorganization. Accompanying their bankruptcy was a generous speech from President Obama trying to explain this process to investors. I'm sure there were many that believed his words that bankruptcy is not a negative result and this is good news for the company. However, anyone who has been in Corporate America knows that bankruptcy can set you back quite a bit and pretty much means you failed. Sure, it is the only viable option left for Chrysler, and in my opinion, most all the American Autos, but it is definitely not something we should be broadcasting as "good news." Obama will also be offering Chrysler $8 billion more of taxpayer's money to assist them in their bankruptcy process. I hope everyone is happy about more of your hard earned money going towards bankrupt, toxic entities. But hey, we've been doing this all along, by pumping our money into the bankrupt banks as well. I don't expect much of a lasting reaction from Wall Street as a result of the bankruptcy, as this fate was inevitable.
Once again it looks like the government will be delaying their release of the results from the bank stress tests. After a couple of other previous delayed announcements, it was decided that May 4th would finally be the date of the release. However, for whatever reason, the government is now saying that most reports will probably be released at the end of next week. This should be a strong signal that indeed there is a lot of manipulation that is going on from the government's end. My theory is that the government is expecting a push back in the markets, as most are at this point. Just as we finally see some sort of downward momentum, I believe it is the intent of the government to use their silver bullet (test results) to try and over rule the sell off. The theory is that such a turn around in what should be a strong sell off would open the doors for a brand new rally with brand new technical rules. Many are worried for this "May sell-off", which looks to be coming, as they should be.
This is my slight suspicion, as I cannot think of any other logical reason why the government would hold onto this information any longer. We all know these tests will shine a positive light on financials as it is just like announcing earnings for banks all over again. My personal feeling is that the sell off is inevitable and I don't think investors will be as easily fooled as many people think. I actually think the delay shows the un-organization of this new system and shows that it should be aborted and we should move on with life.
Real estate REITS got a big bounce from Kimco's release of earnings. Their FFO only dropped 28% (that's not a lot), which was supposedly a good sign for for the real estate REITs. They also cut their dividend from 42 cents a share to 6 cents per share. For me, this provides for a great shorting opportunity. If commercial REITS get 7% up days in this real estate environment, that's nothing but fluff. Give me some puts. As a result, SRS remained fairly weak for most of the day, but I would expect for Kimco to give those profits back soon.
Volume is slowly creeping back into the market as it seems that there should be a more stronger directional move being made. To end the markets in the red today after a rather strong green opening is rather significant and shows the bear's strength. I believe as the volume keeps ticking up, minimizing manipulation attempts, we will see stronger downward trading in the market. The time is getting closer and closer and as Japan confirmed today with their economy, deflation is here. In the next couple of weeks, the results in some of the models should be very significant. I will most likely be looking to take some strong positions with my Zecco.com account within the next couple of weeks. Have a good night and Happy Trading.
Good article FF. I saw that you were strong all last week about the possible pullback, but today is the first time I am seeing some doubt in you about that the rally will continue up up up.
Only a 28% drop in FFO?
Is there just a wee bit of sarcasm there?
hey ff any thoughts on those faz july 40 calls? im into them and dont know if i should risk more money and avergae down? please help!
denis,
faz will NEVER go back to $40. I would definitely short it at those levels. At its best times, it could only triple, so if it happens again, you can hope for $21. If you wanna play bear, it is better to buy fas puts or FAZ itself. The price is now similar to price of options. Remember once FF bought FAZ July $50 calls for $12 and he thought he got a very good deal. Now, faz itself is cheaper than those options!
Unfortunately and with all due respect I have for FF, he is not suggesting the best ways to make money. Just try a June strangle on BAC to be hedged both ways. If someone played this market right, he/she could have retired with the past two month's move. I am sure there will be a sell off one day or more in future. If you keep being bear, it a negative day will eventually happen, but the big question is: Will you have any money left? FF, didn't take enough advantage of the horrible crash we had till mid March as he was fearful about a rally, and now he is not taking enough advantage of the rally as he is fearful about a crash! Too much effort with little or no outcome.
can you tell me why market goes almost up every firday
One of the easiest means to replica watches atom a
affected is by its bright display, or caseback, which
allowsi you to see the close apparatus of the watch. The absolute McCoy does not accept such a
feature, with the barring of louis vuitton replica
some best 1930s exhibition models that were never mass-produced.Just as never bogus bright
casebacks, it did not bite them either.Genuine models will accept a bland caseback, whilst fakes
ability affection engraved logos and other designs. The attenuate exceptions are the pre-1990s
ladies' models, which had "Original Rolex Design" or a agnate aberration thereof, engraved on
breitling replica the caseback. Another
barring is the
Sea-Dweller display, which has engraved about the outside of the caseback.A absolute Rolex has
a 3D hologram-encoded sticker on the caseback. For http://www.turbodemo.co.uk models produced
afterwards 2002, a Rolex acme can be beheld on the sticker and it changes patterns if you see it
from altered angles. A usually has a alliterative Rolex arrangement printed on it and does not
change if beheld from added angles.Keep in omega
replica apperception too that Rolex has alien a tiny acme logo categorical assimilate the
clear at the breadth about the six o'clock direction afterwards 2002, so this should not be present
in beforehand models. This affection may not,however, be applicative to all Rolex watches.