The Big Question: Is the rally in financials done, and the market goes back down?

Discussion in 'Chit Chat' started by BlueStreek, Apr 17, 2009.

  1. Everything hinges on this: JPM already has the highest P/E of all the other 29 Dow stocks, 29 depending upon source, but the next closest is in the 22 range.

    It looks like Citi going lower from here, pretty fast.

    BAC & Wells could go higher, but both have a bunch of weak hands in them who will bolt at a sneeze.

    Goldman`s quarter actually quite weak when you factor the creative calendar change, and the 13 billion from AIG.

    Don`t have an opinion on Morgan Stanley, I just get the impression they aren`t paying back TARP funds anytime soon.

    If we put in a 9% number in unemplyment, lookout below, that psychological fact sends the financials and markets lower.

    Or GM going bk, major commercial real estate going bk.

    or currency crisis.

    Crucial next couple of weeks, I am positioned short here, but may be too early, the real pullback may be in June/July.

    If so, I will just keep at it, and be positioned to catch the next down trend:)
  2. I'm with you Blue. Too short to early. Along with Goldman's Creative Calendar, I'm getting worried about the Creative Accounting brought about by the elimination of Mark to Market. I went short thinking it wouldn't take long for the street to figure out that so many banks could not be so well off. Stupid of me to fight the Fed, but it seemed logical yesterday. So much for logic and hindsight. I think your right about next week, for a day or two anyway. I sure hope your right but as long as the banks keep posting magical fantasy results, I'm afraid the rest of the market will follow them up.
    P.S. For interesting reading, compare this weeks reporting from non-banks to banks. And, don't fight the FED. :mad:

    Good Luck :) :confused: :eek:

    Addendum: Calif. announced 11.5% unemployment today.
  3. The fed funds target will go to -1.00% in order to help the largest banks. :cool:
  4. We can only hope so!
  5. Hey Blue, Feeling Better? Nice little rally for your shorts there or what?
    So what about tomorrow? I closed out 2/3 of my shorts today. Too soon again or ?
  6. But who is really fooled by the Mark to Fantasy? Some idiot retail investors, but noone serious.

    It's like having a trading record where you ignore the losing days. Who is really going to fund you? A moron, and a moron with money is pretty hard to find.

    There has not been any real data which even hints recovery. And on the horizon you got about four problems:

    1) Increasing unemployment

    2) Credit card defaults

    3) Commercial real estate. General Growth Properties is just the first shoe to droo

    4) 401k funds to be liquidated just to pay bills. 401ks are the market, that's what mutual funds run on and the market runs off mutual funds.

    Just a matter of time. The Fed may hyper-inflate, so there is a possibility that in nominal terms the market goes up.
  7. Find yourself another market to trade.......this thing is dead in the water, unless you like to short.
  8. Looking @ the banks since WFC pre-announced I'd say there must be a bunch of them & they're a whole lot slower than I guessed.
    So where does it go from here?
  9. Daal


    Mankiw has an article in the NYTimes saying its time for the fed to go negative
  10. S2007S


    The only way to help out the banks is to give them no help, bailing out every bank and propping up the economy isn't going to work, the trillions of dollars being handed out is going to nothing but create more problems. The system is broken.

    As for the rally in financials being done, probably in the short term it is, without the financials participating to the upside any rally is limited.
    #10     Apr 20, 2009