Everyone knows were in bear market territory. Do not let these rallies fool you into thinking that things are getting better.
http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article4261369.ece
Our last rally off the March bottom lasted quite a while. The rally that has begun today may not last so long this time around. If oil has follow through on today’s correction then the market will respond in kind by rallying. Make no mistake the damage has largely been done in regards to high oil prices.
Regarding oil in general: we are seeing the beginning of a meaningful correction…I hope! Oil selling off should take this market higher so we can absorb more bad news to come over the next month as earnings season kicks off shortly.
An interesting comment today was that foreign companies have been worrying about a rise in labor costs and of course input costs. They are not so worried about food inflation, but I would venture to gather that inflation will not subside as quickly as Ben Bernanke would suggest. Remember when oil was $90 a barrel the “beard” told congress that he expected it to subside.
Get ready for bank failures and I seem to remember my cousin (a fixed income portfolio manager) saying do not be surprised of pundits talking about depression.
Check this article out:
http://online.wsj.com/article/SB121494953423420859.html
Given oversold conditions we should give this move up some room, but this will be an opportunity to get lost money back if your long and give you a shot to short your favorite names. Despite the market upside this morning [[SKF]] and [[SRS]] seem to be going up as well. Definitely a sign of things to come!
At this point trading the upside should be limited to sector trades or the DIA, SPY, and or QQQQ’s and not individual names.
By using this approach your giving yourself opportunity to get out quickly without getting smashed if the market turns suddenly. The sector ETF will give you more diversity and hopefully not make you subject to mass liquidation of an individual name.
Considering [[COF]] today; I’m going to open a short on a close below $37.40
Update1:15 pm~ could not wait till the close for this dog [[COF]].
GLT
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GW,
On chart #1 the term *construction* is not defined.
Are these construction loans for;
*Condo’s
*Apartments
*Commercial
*Single Family
Chart #2 defines the allocation better.
Commercial loans, which everyone currently seems worried about is low.
Now of course that may mean that they are low, and will rise far higher, or, that they are low, and remain low.
If they in point of fact remain low, then there will have been an overshoot of values to the underside.
If they rise, then the selling [in hindsight] will prove to have been perceptive.
I note that FED does not appear on the list from chart 1
From it’s financials, it has minimal exposure.
jog on
duc
Hey Duc,
Yes, they are for construction loans.
Commercial is low , but will probably go higher depending on the severity of economic break down.
I believe selling is pre-emtive to those who understand time lines within cycles.
Perhaps FED has little exposure. I have not really done any work on them.
Peace