Curious - which stocks, other than index ones (eg qqqs easy shorts since no uptick rule reqd), would be most sensitive, best shorts / longs etc, if and when the "US declares war on Iraq" hits CNN? Defense stocks may spike up; on the flip side, what stocks would typically get hit the hardest, fastest, on a declaration of war, for good short entries? Looking to develop a game plan for what stocks are likely quick longs/shorts on market reaction to a war announcement, if/when that happens .. Ideas?
At the risk of getting slammed, I'll jump in here. I think it's best to stand aside when you don't have a clear plan of attack. Who the hell knows how the market may react?
Jim, I agree with you. The reaction will be swift and volatile. Most traders are better off standing off to the side. Defense stocks will rally, the rest of the market may actually do the opposite of what we think. Markets love war, but short a decisive one's. If the war drags on with no clear victory in sight, we'll just move sideways with no volatilty. After the first day the war is announced, the market will return to it's normal routine. So for most new traders, why take the chance of getting whipped around. If you have to trade, be careful.
I wouldnt bank on no war until jan. Although Jan is the ideal time to begin a war in the middle east due to the fact it may be over as the gulf war was before the insanely hot late spring, early summer. Remember there is an election real soon, and any delay until january would leave many with a bad taste in their mouths about Bush....what did he actually do from oct until jan in that case? I would say either in the next 30 days or jan. Play gen. dyanamics, mcd douglas, grumm/north, long. Maybe some good performing gold stocks (barrick?). For shorts, take your pick, maybe the weakest among the nasdaq, or even the q's.
I don't know which specific stocks I'd buy but my overall strategy would be as follows: Go short if the US looks like winning Go long if the US looks like losing Reasoning: 1) If the US wins Bu$h will be emboldened to invade other countries - more war, more terrorism :eek: 2) Under Bu$hâs plutocratic administration the market will never fully recover. If the US loses, he's out and the bear market might end 3) Itâs the opposite of what everyone else will be doing which is usually a good move.
Is this Tom Daschle??!?! Give me a break. The world sat around and watched Hitler and Milosivich amass huge armies, and then both wreaked havic on the world, and in Milosivich's case on his people. I don't think we need to wait for Iraq to get a nuke, unleash it on Israel or the US, and then attack him putting our troops at greater risk to another nuke being sent to a base in Saudi Arabia, Turkey, or some other place. And if you think he went use it, well, no one thought Hitler would slaughter millions of people. If we stopped Hitler, before he got started, million of troops and civilian all through Europe and from around the world would've been spared. But humans tend to forget, get complacent, and that's why we relive the same horrors. If a country poses a threat, they need to controlled!!!
Go short QQQ, SPY. Kneejerk reaction to go liquid. If US prevails quickly, short the drillers cause the spigots will be flowing.
I remember 1991, the market was waiting for war to start. Everyone thought we would drop really bad (including me). At the time I was short oex credit spreads - very profitable going into the announcement. War broke out and the market rallied - took off like a rocket. I was at of all places at the beach. Needless to say my account was wiped out in 3 hours. So this time, who the hell knows. It seems like the market has discounted it and maybe we rally again. Who knows? you know the proverb buy the rumour and sell the news - well this might be a case of sell the rumor buy the news