Energy is the other danger today. XLE terribly overextended. Look at EOG CHK APA etc. These will see profit taking sometime soon. Still, imo SPX was headed straight for 1350 or even 1400. It will be bumpy. nitro
Bear Stearns in big trouble. Market will probably selloff in fear, probably once again below 1300 SPX. But under no circumstances panic. Bear Stearns may implode, but once that news is out of the market, markets will get back to rising again. nitro
90% chance of a FED intervention before the next meeting. That doesn't mean it we come out of this disaster in tact. Odds are nowhere near as good as before of a bounce, but have to buy it. Orders in at 1272 SPX. Four handle stop loss. nitro
The news is now in Bear Stearns. BSC is trading now as if it may implode - a classic run on the bank. Markets will no longer be a slave to its moods. The only other firm that is of this size that may affect the market forward is LEH. nitro
Notice that SIFs are moving in a classical "ringing motion". What does this mean? Not sure, but it will resolve itself one way or the other soon. nitro
Well, the moment of truth: the last hour of the day. Odds probably 100% we test the low of 1270. But it's where we close that counts. I suspect we close at or very near to 1270. I have orders in 1272.50 again with a four handle stop loss. I am going to lose money this time, but discipline is discipline. To investors: This is probably the 8th inning of this mess. Buy good companies with size. nitro
Holy geesys. I am out all day, come back in, look at SIFs and my jaw drops. I look at news and I see this: And Oh man, this is going to be a wild night. All that matters is the close tomorrow. If we close < 1270, 1200 SPX or even 1175 is probable. nitro
I am of the opinion that the FED may have to cut another .50 tomorrow morning. But here is what is not likely, but it would probably do as much to alleviate the panic: Do a currency intervention in the $ nitro
What should strategy be this morning? IMO, under no circumstances buy with SPX below 1270. That would be heroic, and heroes die a fast death in markets like this. That said, if it looks like markets will close above 1270 or holds 1270 during the day after going above it, then imo it is time to buy. Beware that the FED may disappoint the market tomorrow by not cutting another .75 basis on top of what it cut yesterday. C is probably going to get hammered on the open. That is one stock close to the bottom, within $2 to $3. Don't forget the preferreds! nitro
The "apocolypse" scenario is that when the FED lowers the IR tomorrow, markets swoon anyway. If that happens, there is nothing on earth that can keep SPX from 1175 SPX imo. We may get lucky and end up at 1225, but I would not bet on it. On the other hand, if it weren't for the scepter of the FED meeting tomorrow, and some fear on the part of currency traders that the dollar could get bought in an intervention, this would probably be much lower today. But they will gain confidence as the days wear on. 1270 is still the pivot, but it is fast withering away. 1250 SPX is an easy target today. SIFs are in grave danger. nitro