Can I Get A TurnAround?

Discussion in 'Trading' started by stonedinvestor, Oct 22, 2007.

  1. Hot Damn Varian nailed it... sales up 11% in the expensive stuff overall nice story alluded to some conference upcoming stk up $1.90 in AH....

    Lets take a step back and examine what we did today.
    We dialed around until we found an interesting story that was also timely. We stayed focused & maintained research streams even as the market tanked. That's how you make a trade.
    Finally after backing away twice we made the damn trade-- how often have I sat around waiting for a 1/2 retrace after the horse has already left the barn.

    ~stoney
     
    #11     Oct 24, 2007
  2. Big ups to stoney once again, nice call.

    How do you see this market going forward though? What is going to be the catalyst to move it to new highs other than just the trend, momentum, and short covering - as if anything else is needed. Market seems undeterred by the deterioration in financials, credit, real estate, etc.
     
    #12     Oct 24, 2007
  3. Well today was certainly a throw everything in qtr for Merryl and the hope is that it shocked the Fed into 50 BP. I'm in the 25 camp. The market will likely reverse again after the fed meeting if I'm right. It may try to lure us in tomorrow with a sharp move up but I am leery about re visiting the Aug lows. It's going to be a struggle for me but I want to keep some cash for about a month until the dust settles. Dec 2nd or 5th (I have to re-check my notes) is the next supposed " Big Turn " cycle day, from there on it should be clear sailing. Getting there might be rough. Allot rides on the Fed. Allot rides on the dollars reaction to the fed's move or non move and a whole lot rides on what these heavy lifting infrastructure stocks say going out when they report. This idea that overseas sales will save every one from the big US slowdown is poppycock- if we sneeze everyone else will catch a cold; nothing has changed in that regard no matter what they tell us. The next few days look up And if the FED gives the market 50BP things will explode and then the criticisms that Ben is appeasing the street will reach a fever pitch. It could go either way, I think the dollar is more important now.. somehow someone has to halt this slide. Ben can do that by signaling this is the last rate cut. Or conversely he could try and scare Europe into lowering rates in tandem by cutting more than is necessary. (I'm into this economic stuff) That might work too.

    A lot of people wanted to attribute short covering for today's comeback that wasn't the reason in my view. I got an instant message about a rumored Fed cut that came in at 2:10 exactly when the market took off. Most of the buying came into the beleaguered financials... so that tells us at the very least todays move is in jeopardy if Ben doesn't do a nifty dance on Halloween. The whole situation is just spooky. But I take some solace in the fact that S&P did not go on a slashing spree of the other broker's ratings after today's big reveal. S&P seems to think the other guys have it more under control... We shall see.

    Stay 8% cash. ~ stoney
     
    #13     Oct 24, 2007
  4. S2007S

    S2007S

    the reason for the rally on the dow was on "RUMOR" of an emergency rate cut meeting..........

    I think its quite pathetic that it took a rumor of this magnitude to turn the market around, They always need that fed to be the catalyst for the on going bull market. Sad, Sad, Sad. Im sure the bulls will get that 50 basis point rate cut because they need it, right??? If they cut another 50 basis points there will only be bigger problems in the future. Only catalyst left for this market is the FED


    25 basis point is max, 50 basis point cut and this market is in big trouble, the dollar will just fall further and inflation...haha.....you want to talk about a bubble, if they cut and add more liquidity into the market there will be growing asset bubbles around the world. Market will be in trouble with a 50 basis point cut, remember that.

    Also
    Funny how the talking heads want a rate cut yet they are the ones screaming that the economy is growing and GDP growth is strong............PATHETIC.
     
    #14     Oct 24, 2007
  5. Well we have a startling gain in VAR

    VAR 9:53AM ET 47.03 3.83 8.87%

    Do we just flip or is this the start of something beautiful? Hummm.
     
    #15     Oct 25, 2007
  6. Alright I'm a bum I flipped Varian Med.

    Similar action today with a strong last hour. Yesterday Fed rumors today false AIG rumors dispelled. Weird stuff. EMC a champ holding for at least one more day.

    Back to the Fed for a moment I think we all have forgotten that the Fed may have gone 50 last time so peple would not be expecting another one. If he has gone 1/4 surely each meeting the same would be expected...

    At the Sept. 18 meeting of the Federal Open Market Committee, Fed officials voted to cut their target for the overnight lending rate by 50 basis points, to 4.75 percent. Some wanted 50 rather than 25 basis points in order not to create a market expectation of a series of such reductions.

    ``It was good policy to get out ahead and stabilize the market,'' said William Poole, president of the St. Louis Federal Reserve Bank in an Oct. 19 interview.

    ``If we did 25, then we would have had the market expectation of 25 at the next meeting,'' he said. ``So it was better to do 50 at once and have the market settle down.''

    > two-thirdsof investors now anticipate a quarter-point cut and 11 percent are looking for a half-point.

    More bad news in the housing sector of the economy, large declines in profits at some of the largest banks in the country and a plunge in stock prices on Oct. 19 have created these expectations.

    Fed Not Gloomy Though:

    The well-capitalized U.S. banking system is very solid even with large losses from recent market turmoil.

    For instance, Citigroup Inc. reported on Oct. 15 that in the third quarter it had booked about $6.5 billion to cover possible losses in fixed-income trading, underwriting and consumer lending, and it still earned $2.38 billion.

    Yes, earnings were much lower than in the same quarter a year earlier. In terms of the health of the banking system, though, the remarkable point was that Citigroup could absorb such potential losses and still be profitable!

    Housing No Surprise

    Bank of America Corp. also had a large addition to loan- loss reserves, a substantial drop in earnings and still reported a $3.7 billion net. JPMorgan Chase & Co. also booked potential losses while its earnings rose slightly to $3.4 billion.

    As for the bad news in housing, Poole said, ``The numbers are about as expected. They were hardly a surprise. I regard them as a continuation of the housing distress.''

    In other words, the 10 percent drop in housing starts last month, to a 1.19 million annual rate -- a 14-year low -- isn't seen, at least by Poole, as a reason to reduce the lending target next week.

    Similarly, he sees no reason for the Fed to respond to the slowdown in payroll employment growth evident in the September labor market report released Oct. 5. Payrolls increased an average of 97,000 a month in the third quarter, down from 126,000 in the second quarter and 142,000 in the first.

    ``That was a pretty solid report,'' Poole said. ``We have all been expecting it to be lower because the demographics have really been taking hold.''

    Markets Doing Better

    A monthly gain of a little less than 100,000 is ``perfectly in equilibrium'' with expectations of labor force growth, he explained. ``It was generally encouraging, not evidence that the labor market was sinking.''

    Meanwhile, strains in the money markets continue to dissipate slowly.

    Charles L. Evans, Poole's counterpart at the Chicago Fed, said of the markets in an Oct. 22 speech, ``There still is a way to go. Improvements are not uniform, and risks remain. However, markets are functioning better than they were two months ago.''

    As for the economic outlook, Evans said that ``our baseline forecast sees soft economic activity this fall; notably, it is likely that a further sharp decline in residential investment will weigh on the top-line growth numbers.

    ``But we see growth recovering next year and moving up to average close to potential later in 2008, which we at the Chicago Fed currently see as being somewhat above 2 1/2 percent,'' he said.

    Housing Insurance Policy?

    And recent economic news hasn't caused him to modify that forecast.

    ``On balance, I would characterize the data we have received on the real economy since the last FOMC meeting as supporting our baseline forecast,'' Evans said.

    However, he did raise the question of whether policy makers might want to take out some ``insurance'' against a potentially costly possibility that even greater weakness in housing could undermine economic growth.

    Given what Fed officials were thinking on Sept. 18 and what has happened since, that is about the only argument that might cause the FOMC to decide to cut rates next week even by 25 basis points.

    ~ SI
     
    #16     Oct 25, 2007