Monday, September 8, 2008

Up 289 points! But what moved?

What a wrong way market!!

The banks and homebuilders continue to romp, as those short these numbers are being forced to cover. And the retail stocks had another great day.

The material, industrial, coal and steel stocks continue to sell off, as those long these numbers puke them up!

This action in pricing could make someone believe that the world economy is going to fall out of bed, and that the only respite is the domestic United States!

But wasn't it just a few months ago, that the action in pricing indicated that our banking system was going to hell, but the rest of the world was going to be fine?

The hedge funds in liquidation mode have no choice in what they are going to do. But most large buyers buy by committee. They'll need to ponder the effect of the GSE bailout, and the commodity collapse, before they start deploying funds.

In the meantime, the shorts in the banks and the homebuilders just keep getting killed. And the rumours were crazy today. UAL was going to go bankrupt, forcing a halt in that stock, and a 100 share print at a penny! This rumor caused other airlines to trade down before bouncing. There was also aggressive selling in all the favorite "names" that are owned and known.

Give it a couple of days. Goldman said the GSE bailout wasn't a turning point for the banks. By their action today, nobody bought into that.

Remember FRE and FNM had over 200 auditors looking over their books, but no-one could find anything wrong.

Think about the hedge funds that are now blowing up. What happens when they look at the marks of their positions that don't trade? They'll have to sell some more!

But don't write off tech or anything else because of today's action. Look at IBM as the tell today. It was up 3.

The world ain't collapsing, and tech isn't going down the toilet either.

The tell tomorrow is Apple and it's "Let's Rock" media event. And it isn't the product, it will be how Steve Jobs looks.

And he looks good enough for the market to rock!

This time they'll move the favorites!


Anonymous said...

Where should I look for the positive coal, steel and materials equities beside your screed?

palmoni said...

On Wall Street-when crude breaks $100!

Anonymous said...

Well, I certainly now can understand a person who continually draws a new line in
the sand hoping he will eventually
be right. Reminds me of some
acquaintances from elementary
school playground 65 years ago who always drew new lines in the sand
whenever it suited their convenience. While it may be an
elementary school playground to you is certainly isn't to me.

Palmoni said...

Wall Street has just gotten stupid. These companies are being kicked around like balls on those elementary school playgrounds.

The line in the sand is when these leveraged sellers quit selling. Who is selling FWLT down 5, or X down 9 or COP down 6?

Probably the same people who sold WFC at 20, BAC at 19 and JPM at 30.

Sometimes, the market says you are wrong, when your judgement isn't, and sometimes it says you are right, when you are wrong.

I took them at the close. So I think "eventually" is measured in hours....

Maybe I'm hoping for a recess, but I just don't think those being forced to sell are right..

Anonymous said...

They looked good today