I looked at the chart. Only in the most bearish times of 2005 and 2006 did GS ever hit its 200 day moving average. The times dont seem all that bearish right now when compared with yesteryear. For example, in 2006 when Goldman inched down towards its 200 day moving average we had Iraq tension, Iran tension, the thought of impending recession, the Iranian President on television everyday with his nuclear program, 78 dollar oil, Bernanke being mean on TV, etc. There was a host of factors and the market was in big decline. In 2005, there was another set of factors and GS moved towards its 200 day moving average. Violated it for a short time, pivoted and moved higher. This time around is different I believe. It has been mentioned that Goldman is more like a hedge fund then a broker. If this is true, then all of the other publicly traded hedge fund companies are doing poorly as if there is more bad news ahead. Both Blackstone and Fortress look more like yesteryears ethanol companies with the IPOs opening high and the stock trading lower with each passing day. Sears Holdings is a hedge-fund-like company and the 200 day average for that was broken a while ago despite multiple Cramer pumps. If we look at the either the $XBD, $BKX or the XLF, none of those indexes appears especially bullish. JPM, MS, BSC and MER do not appears bullish at all. While the Dow and the SPX have been making new highs, all of these indexes, etfs and stocks continue to break down. I can only conclude that there will be more pain in the coming days especially if the greater market experiences weakness which seems to be a possibility. Eventually Goldman will have to reveal what is happening to its subprime portfolio. I remember those days earlier in the year where these companies were buying up what is left of the New Century portfolio. BSC was able to keep a tight lid on things until they could not. Judging by how Goldman is trading right now, there is probably someone who knows the truth. The truth is something we will find out in the future...
thanks for your post. i'm going out and loading up on more calls. and also... goldman is the right arm of the fed. they are always in the know. if anyone knows how bad the 'GS' hedge fund is, its likely goldman themselves shorting their own stock and calls. Rest easy they quickly will make back their losses. Life is easy when you make the markets and are all omniscient as GS.
I must respectfully submit that Goldman Sachs is a downtrending stock in an uptrending market. Im bearish on the overall market, but whatever happens next I dont believe Goldman will follow. The following chart demonstrates how Goldman has seperated from the overall market (compared to the Russell 1000 index). If the market goes down, Goldman will go down more. If the market goes up, Goldman will go down more although a little more slowly. As for Goldman's ties to the Bush administration, thats debatable. The Bush administration has been messing up for a while now. Bernanke doesnt seem any better. In any event, it doesnt matter what ties you have to any administration if you make a bad bet. At the end of the day, a bad bet is a bad bet and you have to cover it at some point. In the classic "dummy trade", you ask yourself a few simple questions. Is this stock in an uptrend or a downtrend? It seems like a downtrend to me since the start of June. In fact, this stock has erased almost all of its gains for the year. While Apple, RIMM, GOOG, etc all went up big, this thing has been getting flogged. At some point in time, the reasons as to why will be revealed.
For many months goog was the exact same story -- not performing as part of the market rally. now the financials are taking a beating.. this group will play catchup in a big way just like all the others. the media subprime flogging is the cause, and once it, like everything else, dies down there is only one way to go...up. in the next 3 days, if this continues, i wouldn't be surprised to see an LBO offer on one of these players, since the entire sector has an entirely large earnings yield. Then to the moon, like everything else.
Looked at the GS Chart. Michael is correct on this one. Based on the chart it's going down. Also rumor has it their next qtr earnings will be lousy.
I'm thinking the best possible strategy in the universe would be to wait until michael and cramer agree on something, then you should do the exact opposite at 100% margin. anyone agree?