Friday, May 21, 2010

Taking SHLD at 87.


Anonymous said...

do you think premarket was the lows?

the Bear camp thinks up a little and then back down heading to 900s on S&P.

was hoping it was down longer this morning to average out my longs but i'm just not sure what to do right now.

any thoughts would help.

Anonymous said...

Palmoni I just read a guy who was as bullish as you for the past year, but now he says we are in a bear market. Your opinion?

Palmoni said...

Sure there are a lot of cracks out there, but if you didn't sell yesterday, when would you sell?

Look at the euro yesterday. BAC said it was going to 1.16 and then you had a 350 bip move in just an hour as the Governments did their bidding.

Everyone would say that markets are bigger than the governments, and granted the shills in the Governments around the world make me sick, and the idea that we cure our debt problems with more debt is just nonsense, but when did clear thinking make you money?

Lower gas costs, lower mortgage rates-- a little deflation in commodities will work their way in to help the consumer.

The only think that we will have trouble though with is--this time we need real buying to lead us higher. The last rally was by the shorts who were squeezed. This time, we won't get that.

And now that GS is down, the Feds are being conned into thinking that what is bad for Goldman is bad for the masrket--so now we see those settlement discussions already.

Sure the selling we had has to change the complexion of the market. The market looks like a rigged game for John Q Public, but they've been saying that for the past year.

So hold your nose, and dismiss the Armageddon and hysterical talk being shouted and proclaimed by all thiose who have been saying that the entire way up.

Look at Rosie. He gave you these reasons to be bearish:
As it stands, this is the first official correction in equities since the market came off the lows 14 months ago:

The S&P 500 is now down 12% from the nearby highs.

The Russell 2000 is down 14%.

TSX is down 7%.

Oil is down 21%.

Copper down 19%.

The CRB is off 15%.

The yield on the 10-year note is down 80bps.

Investment grade corporate spreads have widened 61bps while high-yield spreads have moved out 161bps.

The VIX has surged 193%.

The euro is down 15% and while the CAD has outperformed its commodity counterparts, it has sagged 7% from the recent highs.

His reasons are valid, but they won't make you any money here.

Everything he says is already known and priced in.

And the melt yesterday, was the discounting of another Lehman style freeze up in bank trust.

I didn't even know people still trusted banks!!

Anonymous said...

so i assume you think yesterday was the "low"

Palmoni said...

Today's low had a nice snapback, but who wants to buy when stocks are up?

After being steamrolled after chasing rallies, who is going to push things?

Only mutual funds are 100% all in here. I don't know people who are like that.

De-risking doesn't end overnight. You can hit the "lows" on the averages, but stocks don't bottom together.

And its still hard to play. The VIX moves up, and then comes in on the rallies, so if you play options on the rally, you still are stuck.

I'm trading light with tight stops, and I'm only buying the big selloffs and then flipping those names on the rallies.

Anonymous said...

thanks...going to sit tight and be patient.

do you play vxx?

Sam said...

"The market looks like a rigged game for John Q Public, but they've been saying that for the past year"

I wouldn't dispute that all or make fun of John Q public if he mistrusted this rally.

Yep, this is a trader's market and only the quick survive. I nibbled on some names too, MON, GS, ABT etc. and hedged with indices. We'll see how this shakes out.