As tempting as it is to buy [[SKF]] or [[SRS]] down huge, I will not attempt to bottom fish, until we get a few trading days under our proverbial belts. First of all, we have no idea how effective or ineffective the new Fed plan will be. Therefore, with that logic, executing any directional trade now is pure river boat gambling.
You might as well take your fat ass over to OTB and hang out with the rest of the losers, while you’re at it.
In my book, the best thing to do, on days like this, is sit it out. Do nothing.
Worst case scenario, you might end up paying 2-3% higher, for inverse ETF purchases or long side plays. However, that’s a price I am willing to pay for assurance.
Frankly, if you’re buying this tape, and this is nothing but a headfake, tomorrow or the day after will be the beginning of the end for your bullshit trading career.
On the other hand, if you’re short and continue to sell into this rally, without thinking, you can easily find yourself in a world of pain—should this rally extend a few more days.
My bias, as always, is bearish. However, this time around, I am going to be far more evil and guileful with my next set of investments or reverse investments—if you know what I mean.
NOTE: Even though the textbook says to go long, “The Fly’s” book says to do nothing. I just wanted to clarify my title.
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Whose textbook? Cramer’s?
we’ve been trading in a very tight range for the first hour. i wonder if we break it, one way or the other.
Buy small bullish positions for daytrades or an overnight hold, if you’re brave.
Or sit tight and sign up for iBC March Madness:
http://tournament.fantasysports.yahoo.com/t1/group/38822
Group ID: 38822
Password: developing
Direct link:
http://tournament.fantasysports.yahoo.com/t1/register/joinprivategroup_assign_team?GID=38822&P=developing
fm minyanville:
Two quick observations this morning regarding the Fed announcement:
First, as I write the headline on Marketwatch reads “The Fed Pulling Out All The Stops.” While the short covering rally will suggest euphoria, I can not emphasize enough how much the regulators have raised the stakes this morning. As any church organist will tell you, you can’t make the sound any louder once you “pull out all the stops.”
Second, and just as important, the line-up of regulatory participants in this morning’s actions spanned the globe – from the ECB to the Bank of England to the Bank of Canada to the Bank of Japan: an unprecedented step. By my count these central banks, along with the Fed, manage the monetary policy for economies representing almost 90% of global GDP. Anyone still harboring the notion of “decoupling” may want to reflect on the implications of today’s actions.
Going to be a fun day to watch.
Good points Brucie.
So much for the Fed being our nation’s bulwark against inflation. That shit is out the window.
Go Go Yukon Cornelius.
If $$$ strengthens, assuming we aren’t cutting as aggressive as people estimated, shorting OIL or Commodities looks real good to me.
If this TAF shit dont work, you can short financials again.
Did you guys noticed how fucked Bear Sterns got? The Fed accepts only AAA collaterals, and as you know Bear Stern CDO’s were downgraded YESTERDAY!
Stock is up only 2%, possibly heading negative.
It’s 10:45. Time to start the daily BSC rumors.
Big Mike- That’s because BSC doesn’t place their partners in Treasury like GS. GS received the Fed memo yesterday in the PM-guaranteed.
DCR would be the short oil play. sub-$10 right now
Despite Fly’s sage advice, a ‘safe’ way to play this action is to put limit orders far enough from the action, that if they fill, the odds increase significantly in your favor.
ie: I bought SKF premarket at 126 & flipped it at 130.80. I have similar bids or sales out there on all sorts of crap. If they fill while I go for a bike ride or take the mutts for a hike, maybe I can pick up a few easy shekels.
I find many times that when I put in a crazy limit order in the pre-market or in the AH and I say to myself “no way is this going to be executed”; it usually gets executed and probably results in a good profit 75% of the time.
Fed funds traders lower odds of 75 basis-point Cut in March
By Laura Mandaro
Last update: 10:51 a.m. EDT March 11
SAN FRANCISCO (MarketWatch) — Fed funds futures dropped sharply Tuesday after the Federal Reserve and other central banks announced measures to funnel more cash into the banking system.
The April contract fell to 97.66 from a settlement Monday of 97.785, with the most recent trade implying a about 64% chance of a 75 basis point-cut to interest rates in March from the current level of 3%.
A 50 basis-point cut is fully priced in. On Monday, a 75 basis-point cut was fully priced in with traders even giving about 14% odds for a one-point cut, which would mean interest rates would drop to 2% in March.
i like the 3 in the 7th at turf paradise..
also fm minyanville –
The Fed is taking this step to avoid complete financial collapse. That much is becoming evident very quickly. They are using up their bullets much more quickly than they want to, thus confirming the severity of the state of the financial system, something Minyanville has been pointing out for some time.
Their last bullet comes when they directly lend to some major institution in a big way to avoid its collapse.
As far as this move, it does nothing to solve the solvency issue. The Fed is just saying we will take that risk for the market. That is very similar to nationalization. The irony is that the Fed continues to address the situation as if it is a dislocation from fundamentals (or they continue to hope that people view it that way. In actuality this is exactly what should be happening to these credits: the market should destroy them.
The government will never give up trying to forestall the inevitable, but that does not mean they have the power to do so. Stay the course: It is still early in this unwind with more flawed logic from the government to come.
always look on the short side of life
fly,
what did you think of mvis CC? Besides AT laughing. Are you even somewhat plesed? Do you feel MVIS is making good headway? Any other rumors you hearing that you can share? Is you source still bullish?
Appreciate your help. MVIS is starting to piss me off.
Thanks.
kd….starting to piss you off?
Now that The Fly is in “do nothing” mode, I expect we will see a few funny stories and more egregious rapper music videos today.
oops .. there goes BSC / LEH
This “rally” is starting to lose its erection. Where is the girth? Where is the volume?
Hep me! Hep me!
I need an intervention to hold off shorting the shit out of MOS and JOYG right here and now!
Goddam caffeine!
You need to join shorter’s anonymous. They have a 48 step program that lasts ten years.
another $200 billion please
Even if BSC changed its name to Bull Sterns, it wouldn’t matter. Continuing to freefall.
UBS is looking like a hooker ready to go down again. Elliot? Elliot?
my bong {sic} trader friend said a BSC or LEH will have to be sacrificed in 5-8 weeks
as well as a WM
when this Ag bid disappears, watch out berow
CRM is not going to be taken over by Oracle. That lie has now been put to the light, as Oracle introduces a major upgrade to their software on demand platform. So did Seattle Four Eyes and SAP. Keep selling your shares Benioff.. you will have a date with a Congressional hearing as well. Fuck you Jeff.
http://biz.yahoo.com/rb/080311/oracle_salesforce.html?.v=1
Another good one. I can’t get over how much some of these sound like a Fly post:
Proponents of higher-order theories of consciousness argue that consciousness is explained by the relation between two levels of mental states in which a higher-order mental state takes another mental state.
If you mention this to Chuck Norris, expect an explosive roundhouse kick to the face for spouting too much fancy-talk.
rumor bsc failing to deliver on credit balances on clearance accts
Chuck on clock watching:
If you ask Chuck Norris what time it is, he always says, “Two seconds till.”
After you ask, “Two seconds till what?” He roundhouse kicks you in the face.
Calvin — the looming question:
What does CRM do when it fills this morning’s gap?
Does it crap?
Or flap?
Juice.. are you partial to Johnny Mack Mackhoul? MS has forty btu of Alt A’s that it can’t bring on the books.. that’s ten times it’s capital, no? Help me out here if you are in the know.
Jakey.. that Oracle release is going to put a stake through it’s lying heart. They have been down every day since the Fidelity pump job off earnings. I’ve got 12k shares that say so, my dog is in this fight.
update.. Oracle dropped that Siebel goofiness off the app, and now brand it with their own name. This is trivial to most normal people, but I have hung out with geeky dudes back in the day, who have now gotten CFO’s to their names, and I know how they think. That makes a difference to them.
Where is the author?
Is he “Fly-bernating?”
____________
(purses lips, takes a step back to admire that last one.)
C– thanks, I’ll stay short w. you, then.
MAJOR FED PLAY
The FED move to take agency paper or other sundry goods from primary dealers in exchange for a 28-day treasury loan is closing on the bailout or “domestic sovereign wealth infusion†I have talked about before.
This is an important and aggressive step in admitting that just lowering interest rates could solve the financial crisis. No doubt there are still problems, and serious ones, that will impede economic growth and consumer spending (ENERGY AND FOOD INFLATION).
My takeaway is this — The FED is saying “give me your paper that is trading below par, and we will lend you parâ€. Now go out and lend!!!. Get the financial flows moving!!! The 28-day loan gives dealers some breathing room. I believe that in the light of calling this a bailout, the FED will more likely than not, roll over this loan for X period and keep on rolling over the loan until bids are stable or improving. At that point, one could infer that the financial system is functionally working again, and the economy has a better chance of recovery.
If you believe this scenario, and I have and do, the good fixed income news will eventually spill over into equities. Day to day, who news. We were oversold, as stated yesterday, and this news helps in the short-term to effect a rally. This FED move is a potentially game-changing event. If the FED follows this move by lowering interest rates by less than the .75 bps expected or hints that they are close to or nearly done, the $ should rally and the market will follow. This will be an interesting next week or two.
We are 1-year into the sub-prime contagion and the FED finally gets it. THIS IS LONG TERM BULLISH EVENT.
Okay, with no moral support forthcoming, I just hit JOYG over the head with a sock full of marbles.
Now I know how it feels to be Boomer.
IBH – I dunno man, looks like another “last Gasparino” to me.
Jake,
“Hep me, Hep me!”
Dudley Dickerson/stooges reference?
BanD —
Not familiar with that reference. I think I thought I was doing Hattie McDaniel, but who knows where I dragged that one from?
FWIW — I could never stand “the Stooges” or any of that olt timey slapstick scheiss.
It sounds good, I love the simplicity. Your posts are easy as a pie and really attractive at the same time.