The stock market should be volatile monday
1/12/08 Saturday
Tough week for the bulls. Most everyone lost a lot of money except the bears. I am one of the bears; but, wish I cashed out before the close. Verizon called me trying to get me to resign for another two years as the market closed. I was a bit too greedy and didn’t pull the trigger earlier in the day and it may cost me.
You are always guaranteed to lose some premium on an options contract at the open on Monday of an expiration week. I wish I never answered that call by Verizon. But, I guess I’ll have to wait till Monday to see what happens. Verizon must of bought some customer management software like CRM I am short. Looks like the product might need some work.
I am sure there will be plenty of sellers going into monday with fear riding high for retirees, and the market will be none to accommodating to let them out on a large gap lower. Could be hundred points down or up on the open with all the volatility and associated heads games.
Everyone seems to be looking for more cash and the market is trying to do the shakedown the best it knows how with a crash. Must be that trade deficit catching up to us. Disappointing the market is supporting drug, health care, and hmo’s. I would think that the all seeing market could figure out socialized medicine is coming and in the entire nations best interest.
Look to get in or out at your price on Monday. I am sure the market will go both directions. The one thing I fear more than the banks explaining why they lost so much money. Is the terrorist making an attack when they see weakness or us being dumb enough to attack Iran. The world needs to work together. I sure hope we get a president who invests heavily in solar and brings about a system of socialized medicine. Its the only reasonable way forward.
Pure capitalism was created hundreds of years ago when people thought humans were heathens. We had no idea how much one human could do or how great a country we could build. Google is working on robots that can calculate every angle, and think more intelligently than humans while we surf the internet. I sure hope the heathens don’t blow it selling us out to the greedy. Its no longer the rich we have to fear. Its the greedy. The world has enough resources so every hard working American can have a home, two kids, a picket fence, Mercedies, and a college education.
The Dow could crash a few thousand points according to one bear investor on t.v. Maybe or maybe we trade higher this year. Stranger things have happened. I hope populist female president wins and sets the world straight. Life’s to short and precious to be wasted on wars. The world gets more crowded every day and respect has always been a sure way to stay out of trouble.
A lot of funds have set rules that have been triggered by all the weakness in share prices. So that could provide grounds for going lower; but, the market likes to keep the investors guessing. Jim Kramer from mad money was constructive about AAPL, AUY (Kramer’s best gold stock). I like CMED SEED MOS and YGE for bullish trades or investments next week. I like a short in any retailer. I may short TIF, BLK , or QQQQ for a trade. I don’t see any light for TIF with the high end women already sporting all the diamonds they should rationally desire and the heathens still don’t have any money or lost it this past week. Market makers are sure to be currently swimming in sells with all the selling these past few weeks; but, I think they have been waiting for this and should have no problme taking the market where it needs to go wheather thats higher or lower.
No important indicators until Tuesday’s retail sales, retail sales ex auto’s, and PPI. The inflation numbers are going to start moving higher or the balance sheet losses are going to pile up for retailers. Kramer was making fun of sports retailer that said BGFV could no longer say the were the third largest sports retailer. The environment does not seem friendly for passing along costs to the shoppers who are managing to make less transactions, and spending less each time. Good job! I imagine the balance sheet losses are going to pile up and inflation will stay tame. Lets hope not and the nation realizes they have a diverse region with the population equally distributed 2/3 of the 70 million that is under the age of 30. Apple a big conference to showcase products on Monday in Europe that has always made the stock move higher in the past. I think Apple should open much higher given the pull back and the growing number of world wide consumers that would like the new gadgets Apple creates. Select software companies also appear to have some support I notice that some stock seem to be establishing a small base and others look to be heading out of business. First I want to say it is a miracle that the banks could straighten their balance sheets out. Society should demand they are as leanant with American tax payers. Not the current administration, and not unless it is demanded. Good luck getting the oblivious to notice anything going on concerning their children’s future. I think the plan going forward is to support anything that America has patents behind and sell everything you can’t patent. Drugs stocks are definitely benefiting. You would think no one told the investors most major drug companies have pipelines that are at best comparable to the drugs we already have on the market. How many cholesterol, heart, depression, anxiety, or pain medication can society need. How many CEO’s can we send to the moon if they would like. Wake up wall-street! Wake up America! Over paying CEO’s is not capitalism its feudalism. No body wants to live in a world where they don’t know if the money in the bank will be worth anything. No wants a fixed rate triple AAA top rated fund that only returns half its investment.
Mrs. Clinton appears to be turning more populust to get the votes or maybe she is following her heart. She proposed a 70 billion dollar stimulus package. 25 billion dollar tax rebate. 5 billion towards renewable energy. That will put a dent in the 500 billion needed to put 90% of the world on solar energy in the next hundred years. Now if she just gives back the $800,000 Michael Moore states she has received from the drug companies and health insurance companies in his movie Sicko ( A must see for all). Maybe everyone can health care this century and doctors can still get a few hundred thousand a year in real currency. Any way sure hope Hillary puts a few accountants and economists back to work. We need to reconcile our balance sheets of wealth in the country, eliminate the massive trade imbalance over time, and make some real friends. Wake up America!!
Staying Short CRM, and QQQQ. Most stocks look good to short here
Now you add in my brother in law works in the sector, and he said he was expecting a flat year for the sector. Hardly a situation that a hi growth company can be overly successful in.
CRM could go up on the other hand because it has recently sold off, and is obviously the stock is over priced because investors pay for growth, and buyers/sellers set the current price. Kramer did say the risks were 10 points up and 30 points down. That means it could go up 10 from here. Always remember to look at the other side of the trade, and only take the best opportunities. Rember this site is so you can learn from my mistakes as well as succeses. Good luck
Market maker thoughts on figuring his position
Update (6/15/2008) The market maker has a wicked control on the market, and should show good profits as GS reports this week along with private firms like Scottrade Securities.) Market moves with conviction, and revaluation as we find real terms. I still think beer first, get high 2nd, and lover; then kiss your neighbor if he wants peace; kill your neighbor if he wants war!
In the shortest of time frames the market maker is on the other side of any trade that is placed when he can not match orders for a buyer, and seller. The computer algorithm or market maker is in charge of setting a buy, and sell price for the market regardless if there is a buyer or a seller. If someone makes a block trade larger than the size of the market you will often see the stock make a print that is outside the offered bid and ask. Well now you know someone has made a transaction for that amount of shares on the buy side if it was higher, and on the sell side if it was lower. The market maker has made a deal to take on a larger transaction at slight discount or premium to the market.
A successful openings only strategy I learned from Bright Trading is buying or selling major stocks on the New York stock exchange when a stock gaps open outside of a normal trading range. You could use this strategy on any market; but, Bright felt the other markets were two unpredictable. Say MER gaps opens 5% higher tomorrow in the morning you could short the stock, and have a trade with a positive expectation. In theory going on the side of the market maker (the specialist as they call it). If it gapped lower they would go long the stock looking to exit the trade with in thirty minutes to gain a small amount of money. In theory the market maker has alot more buys than sells at the open on a gap higher so naturally it is in the market makers interest if those people leave the trade with a loss, and if he has other people taking the other side of the trade. So routinley the stock will trend back towards the mean at least for a quick time to exit with a profit.
