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On second thought. I don't have time to waste with that garbage. I checked it out, yet they limit you on what you can/can not trade. Not my style, and a complete waste of time, like these boards...
quote:Originally posted by Peaser: On second thought. I don't have time to waste with that garbage. I checked it out, yet they limit you on what you can/can not trade. Not my style, and a complete waste of time, like these boards...
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Kind of rings hollow now that futures are down a bunch, but I am of the opposite opinion. I planned to sell my FAS and BGU to go into the short ones (FAZ and BGZ) today. Looks like I should have done it on Friday. I think we'll give back half or more of the gains from the last 5 days over the next few.
quote:Originally posted by invester: Went long last Wednesday. The new tarp plan, along with the others is exactly what I've been looking for. Largest holdings.
"At the close of the show, Melissa Lee was asked to comment on the volatile impact hedge-fund redemptions are having on the market. She noted an estimated $200 billion worth of redemptions still have to be made between now and the end of this year.
She noted hedge funds are hurting badly to the point where they have "gated" investors from making withdrawals. According to Bloomberg, over 80 hedge fund managers have limited withdrawals in the past two months.
She said the hedge fund selling is not limited to equities, but is across the board, including commodities, where "they are big players."
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"At the close of the show, Melissa Lee was asked to comment on the volatile impact hedge-fund redemptions are having on the market. She noted an estimated $200 billion worth of redemptions still have to be made between now and the end of this year.
She noted hedge funds are hurting badly to the point where they have "gated" investors from making withdrawals. According to Bloomberg, over 80 hedge fund managers have limited withdrawals in the past two months.
She said the hedge fund selling is not limited to equities, but is across the board, including commodities, where "they are big players."
All those analysts have been brainwashed by Cramer. Stlii plenty of volatility. We could see another black Monday very easily. Invester, I think we go lower and back in the 7's this week.
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Down in the morning, up in the afternoon. Or is it the other way around? The topsy-turvy stock market is tough to read.
In the last year, the Dow Jones Industrial Average has briefly been over 13,000 and below 8,000. The past month has felt like the Cyclone roller coaster on Brooklyn's Coney Island -- lots of ups and downs, the whole rickety thing feeling like it's going to crash at any minute.
Great investors are taught to listen to the market. Each tick of the tape has something to say about expectations for growth, inflation, policy changes and looming recessions. The stock market is like a giant mass of pulsing plasma doing price discovery and a game of hot potato, getting stocks into the correct hands with the right risk profile. It's way too big for any one person to manipulate, let alone touch directly. Instead, millions of us provide input with our buying and selling decisions.
When it's at its most efficient, with buyers and sellers neatly matched up at the right price, it's a pretty good predictor. The Crash of 1929 announced a recession, and the wake-up call unheeded might have caused many of the bad policies leading to the Great Depression. The Crash of 1987? Not so much.
You see, the market is a great manipulator. In September, the Dow dropped 700 points intraday after the House of Representatives voted down the Treasury's TARP bank-rescue bill. Spooked, the House passed the bill the next week. Or how about this? The Dow was up 300 points on Election Day applauding an Obama victory and then down 1,600 points since.
The market can also be a bold-faced liar. On Jan. 22, the Fed announced an emergency 75-basis-point rate cut in response to huge drops in European markets. A few days later, it came out that a rogue trader at Société Générale lost them $7 billion and the bank was unwinding his positions. Oops.
So which is it now: an efficient mechanism or a manipulating liar? Should you listen to it warning of doom or anticipating renewal? I'd say stick wax in your ears and don't listen to the market until February.
Don't get me wrong. The freezing of the credit markets is wreaking havoc on the world economy. Corporate profits are dropping. Central banks are fighting off deflation and may not turn off the spigots fast enough -- which could ignite runaway inflation. But because of the credit mess, I am convinced the stock market is at its least efficient today. Don't read too much into any move. Here are the five biggest dislocations taking place:
- Tax-loss selling: Whenever you have a loss in a stock -- and who doesn't -- it's always tax smart to sell it, take a tax loss and either buy something similar or wait 30 days and buy the original one back. December can be an ugly month of indiscriminate selling. The December effect will be huge this year.
- Mutual-fund redemptions: Mutual funds are also dumped for tax losses. When the stock market is down in the morning, it's usually because of mutual-fund redemptions.
Fidelity's giant Magellan fund, down 56%, is one of many in the $6 trillion stock-fund business having an awful year. As investors call or click to get out of these funds, Fidelity and the others have to unload shares the next morning to raise cash. This forced-selling overwhelms the system. New York Stock Exchange specialists, who are supposed to maintain an orderly market, stop buying and back away. You get huge drops, which can unnerve even more investors and cause them to redeem.
- Mutual fund cap-gain distributions: To make matters worse, in December mutual funds do capital-gains distributions. In a down year like 2008, you would think there are no taxes to pay. Think again. Legg Mason's Value Trust, run by Bill Miller, outperformed the market for 15 years by buying many "unvalue" names like Amazon. As investors redeem, he is forced to sell many of these stocks originally purchased at very low prices, triggering huge capital gains in a year his fund is down 62%. You can almost guarantee investors also will sell more of these funds to pay their unexpected tax bill.
- Hedge-fund redemptions: Instead of overnight selling like mutual funds, hedge funds typically require 45 days' notice for investors to get out of a fund. They've been furiously selling since September to raise cash to pay investors. This usually shows up as a set of stocks that just go down and down and down with no obvious explanation.
Rubbing salt in hedge-fund wounds is the fact that Lehman Brothers was a prime broker to many hedge funds, holding their shares. While Lehman's bankruptcy was not a problem in the U.S., in England the policy is to freeze accounts until the mess can be sorted out. There are billions in assets locked in this bankruptcy, and hedge funds are forced to sell positions in the U.S. and elsewhere to raise cash, exacerbating the downside here.
By the way, when hedge funds are down for the year, they work practically for free until they make up the loss. We'll see hedge funds close and stocks liquidated as -- no surprise -- hedge-fund managers like to get paid.
- Margin calls: Whenever stocks go down sharply, you quickly find who owns them with debt. We have seen spectacular margin calls, a requirement for more capital to cover share losses. Chesapeake Energy CEO Aubrey McClendon unloaded 33 million shares to cover losses. Viacom CEO Sumner Redstone had a forced sale of $400 million in Viacom and CBS shares because of a margin call on other stocks. You can bet many not-so-public margin calls are behind many huge price drops. These usually take place in the last 30 minutes of trading.
So won't January be alright once these dislocations weighing on the market are lifted? The January effect is supposed to be positive.
Well, often money managers are fired at the end of disastrous years. A new manager comes in, looks at the existing positions and dumps them all and remakes the portfolio with new stocks that he likes, thus generating more selling. My favorite Wall Street adage suggests that the stock market trades to inflict the maximum amount of pain. Remember, you can only ignore the stock market for so long. Once everyone thinks it can only go down . . . it might go up.
Mr. Kessler, a former hedge-fund manager, is the author of "How We Got Here" (Collins, 2005).
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LONDON – European and Asian stock markets surged Monday after Wall Street's rebound on Friday as investors took heart from new plans to bolster growth around the world.
The FTSE 100 index of leading British shares was up 168.70 points, or 4.2 percent, at 4,218.07, while Germany's DAX was 242.97 points, or 5.6 percent, higher at 4,624.44. The CAC-40 in France rose 174.33 points, or 5.8 percent, to 3,162.34.
Earlier, Hong Kong's Hang Seng index jumped 1,198.78 points, or 8.7 percent, to 15,044.87 — its highest close in seven weeks — while Japan's Nikkei 225 average jumped 411.54 points, or 5.2 percent, to 8,329.05.
The gains came despite Friday's news that American employers cut 533,000 jobs in November — the most in 34 years — as investors appeared to signal their support for growth-promoting measures around the world.
On Friday, the Dow Jones industrials rose 3.1 percent to 8,635.42, and the broader Standard & Poor's 500 index gained 3.7 percent to 876.07.
Futures pointed to further gains on Wall Street, with Dow futures up 181 points, or 2.1 percent, at 8,793 and S&P futures up 22.40 points, or 2.6 percent, at 894.80.
"The hour is darkest before the dawn and while the economic backdrop is absolutely dire, policy makers have now moved to an aggressively accommodative stance," said Jeremy Batstone-Carr, head of research at Charles Stanley in London.
Chinese officials were reportedly meeting this week to discuss possible new steps to expand the $586 billion of stimulus already planned, while in Washington, a bailout of ailing U.S. automakers appeared to be falling into place.
House and Senate aides were hammering out legislation that would dole out billions to Detroit's Big Three automakers within a week — but yank back the money if a government-run board and overseer decided the companies weren't taking steps to overhaul themselves and become viable.
Investors also cheered President-elect Barack Obama's plans, announced over the weekend, for the largest U.S. public works spending program since the creation of the interstate highway system a half-century ago.
India's government also said Sunday it plans to spend an additional $4 billion and cut some taxes to boost the nation's slowing economy, an announcement that came on the heels of the central bank slashing key interest rates by 1 percentage point.
"Weaker economic data have increased the pace at which monetary and fiscal authorities are putting support packages together," said Hans Redeker, an analyst at BNP Paribas.
Oil stocks were doing particularly well Monday as expectations of a big production cut from the OPEC oil cartel helped crude bounce back from four-year lows.
Light, sweet crude for January delivery was up $2.51 to $43.32 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell Friday nearly $3 to settle at $40.81. Prices fell as low as $40.50, levels last seen in December 2004.
Chakib Khelil, OPEC's president, said Saturday the oil cartel could announce a "severe" reduction of output quotas at its next meeting on Dec. 17 in Algeria.
Elsewhere in Asia, Mumbai's Sensex index was up 4.6 percent, while in mainland China, the Shanghai Composite index rose 3.6 percent.
Australia's benchmark index shot up more than 4 percent, led by banks and the nation's biggest retailers, as 8.7 billion Australian dollars of government handouts began to flow into the bank accounts of pensioners and low-income families.
Thailand's key index advanced 2.8 percent, taking a cue from gains around the region and also lifted by signs the business-friendly opposition Democrat Party will have the numbers to form a coalition government in the aftermath of Thailand's ruling party being dissolved for vote buying.
Markets in Singapore, Malaysia and Indonesia were closed for public holidays.
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Associated Press business writer Stephen Wright in Bangkok contributed to this report.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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DRYS up 50% today. Market cap a messily $250 million. They own a fleet of 38 vessels. Extremely undervalued. Check out the spot price for drybulk. It bounced and is now soaring.
quote:Originally posted by osubucks30: At what level do you think the market is over bought? I am looking to start a new short position at 9500 (if we can get there).
I actually said the same thing "9500" on Pcola's thread. I think with Obamas new plan its risky to take a full on short position. The game has completely changed. I would defiantly hedge. I am, and have been for a while long all infrastructure i.e. MTW. I've got two new AMAZING picks for tomorrow. I can't say now because I haven't purchased yet. I did DD all day on them.
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Navios has revenues of over $300 million and the stock trades at a mere $250 million market cap. Not just that, but they are actually the largest Drybulk shipper with over 70 vessels to date. The Baltic index bounced and is now soaring. This may be the cheapest stock, in one of the best sectors I've seen in a while.
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