I had time, while freezing my ass off this weekend (I am warm and rich now), to think about market psychology. After all, that’s what short term moves are all about.
Then I saw someone throw a couple of shoes at President Bush and it dawned on me: holy shit, people are going to celebrate like it’s 1929 when he gets kicked out of the White House.
Last January was different. We were at very high levels and people were still in denial. Today, people know everything sucks, but yearn for better times.
Basically, we could be heading into a period when the market melts up, for no good reason, causing bears to shoot howitzer shells into their faces. Without a doubt, EVENTUALLY, all of the bad news will crush the spirits of the true believers. However, in the interim, Obama lovers, coupled with New Years fools, might gun this fucker another 10-15%.
One of my new strategies for 2009 is to avoid 2x and 3x etf’s. They have proven to be mathematical absurdities. In their place, “The Fly” will get back to good ol’ fashioned stock picking.
At the moment, I have a very large cash position. Upon executing my “Don’t Let the Door Hit Bush on the Way Out” strategy, I might buy the following:
INTC, RIO, AMKR (dice roll), UN, AYE, LNN, CMP and APOL.
NOTE: In the event the market just dives off a cliff, sometime very soon, I will shelf the thoughts written above, indefinitely.
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Fly, those 2x ETFs will be whispering to you, whilst your white robe trails silently behind you. You cannot resist the siren song.
Resistance is futile. 2x ETFs must be traded.
Great read from Naked Capitalism-
“Is a GM Bankruptcy Inevitable”
http://www.nakedcapitalism.com/2008/12/is-gm-bankruptcy-inevitable.html
That sounds great, staying away from the 2x and 3x etfs, but you know you’re loving those moves! I’m going to wait for the volatility to subside before abandoning those lovely super-movers! But I agree, these things were not built to last.
Why Rio and not BHP, Fly?
You think the debt issue is overdone?
Yeah, I’m loving the moves in FXP.
Please.
In 2009, I would like to be able to sleep.
RIO, BHP, same shit.
Well hell. Who made you stick around in FXP? You’re throwin’ the baby out there Fly.
I thought a point interesting move of last week was that the TeD spread move below 2 and held there despite the Friday debacle.
I am long gold .
I also bought some euro and Aussie this morn. If Ted holds down and the Fed move down rates accompanied with dovish fed babble, the Euro could take off in this environment. Aussie is a liquidity play and have no hesitation in blowing it out if it doesn’t work.
Wood:
You’re a two bit pirate.
That’s why I trade with RRRRRRRRRRRSI
Fly, I have searched my feelings and have come to the answer.
Neither the Giants or the Titans are as good as they thought they were.
But the Crackboys still suck, and Homo will choke once again, much to the Sleestak Jones’s chagrin.
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Very sorry to hear about your heating difficulties. I never know when you are putting us on or no. It appears this episode was not a put on, however. Hope the kids stayed warm.
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PPS — thanks for seeing it Wood and Eye’s way, again.
I just hope no one follows you out of the funnel.
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Quietly pay attention to this post guys. I aquiesce with Fly on this one. Vix to 40s.
-gio-
Mr. Fly I am sorry to hear about you and Mrs. Fly’s heating problems. Remember I suggested you should take a Caribbean cruise right about now….
I am glad you are going to ‘come up with a new writing style’ that will be good for your Turrets syndrome…hopefully you now taking your MEDS.
No 2x or 3x ETF eh? I dont believe it. In no time you will be going NUTS waiting on the market to ‘ do something’ and you will dive right into those 3x ETF’s
I LOVE THEM- for the moment. One day we can all go back to picking stocks and actually ‘ walking away’ from our computers for a couple of hours.
See you Monday
Just load up on TBT. “Easiest” play out there.
i think the weak dollar trade is the only one with any traction right now.
Anyone see 60 Minutes tonight? Anyone who saw it is on the phone selling at the open tomorrow. It was a Class-A scare job. It was a well-produced piece designed to make even someone like DEVILDOG say “Whoa, it’s gonna be bad!”
Shouldn’t the euphoria after the election of the anointed one have caused a rally? Instead the market to one in the nards.
I agree the market is stupid. It’s so slow to catch on to reasons to sell that is dithers long enough for another ill-advised reason to buy shows up. It doesn’t change the trend.
2-3x ETFs (when does the 8x start up?) are a great way for the personal investor to increase risk and holding them is a great way to take huge losses if markets gap down overnight.
If the dollar starts to fade and the Yen continues to crush, then gaps will be down overnight probably across all asset classes.
http://www.youtube.com/watch?v=eFNdAmvpaKs
Fuck 60 minutes. Their show is only like 44 minutes sans advertising. They lie. We built this city on rock and roll, not debt. Money managers and traders move the market not losers who get their news from major television networks. God forbid the plastic on their sofas doesn’t stick to their fat asses when they get up to open their portfolios to find a fucking moth orgy only Buffalo Bill would be jealous of.
The fly is high from sniffing gas fumes and freezing his dick off all weekend. The fact that everyone expects this rally is exactly why it will not happen. I fully expect The Fly to think clear thoughts and retract that post once his gas hangover is gone.
The system is collapsing
http://www.bloomberg.com/apps/news?pid=20601109&sid=aGvwttDayiiM&refer=home
christmas will not be cancelled, end of times can wait till January. Folks will get giddy, what with the shoe ducker leaving office soon., and Obama cononation. Avoiding that shoe might have the been fastest thing he’s done since he was sniffin’ booga sugar at the SAE house with Marv at UVa.
Hey hmmmmm imposter. Fuck you. I will command Meredith “Ursa Major” Whitney to greet you with the most deceptive bear hug. She’s polishing her championship belt as we speak. Then she’ll steal your Arby’s coupons from your velcro wallet. The Fly does not get high and neither do I. Your comment is bullshit. We will be lead by deaf hipsters (ANF), John Denver airplanes (ALK) in the coming days, and also by Howard Lindzon of CEC.
Bears are singing “if you love someone set them free” from their yoga mats. Having come upon a flaw in their business plan – that there will be no banks to hold their winnings, they are left with only 50% of the market cap for now. A melt up is good horse sense hank har.
But, half a bear can break this thing, damn, why give up now?
hmmmm: I dont know how your name added to my post. That was an accident. Arby’s must be delicious when your high.
I must say, SDS is a great trading tool. It has massive amounts of volume and that is what I look for in a good ETF, and its not as volatile as SRS. The SPX is whats really important anyway.
In the spirit of FXP, SRS may get cut in half before its more than a 1-3 day trade to the long side. When this relief rally runs its course, maybe by April Fools Day, wouldn’t that just make sense? An April Fools Day Market Massacre … then those FXP’s will print money to the stratosphere.
I love this post. DT wins again!
-DT
Fairfield to sue Madoff … right. Got it. That should do a world of good.
Strange that the markets perform OK in the face of a $50 Billion swindle, no?
Eye
Is it a $50 billion swindle or $17 billion? I keep hearing that the capital was $17 billion while the 50 bill figure has been mentioned once and seems to be the accepted amount now.
I would bet the loss is closer to $17 billion and still call it a home run as far as flip out stories go.
Next thing you know Hampton Inns will join the suit.
The 2x, 3x etfs are absurdities because they have to do daily rebalancing. I have a degree in math and computer science and have studied them and these things will grind lower in times of volatility. I can see SKF going down to $20 and SRS going down to $20 when nothing much happens but just volatility.
They are extremely dangerous instruments and the Fly is 10000% right that you need to stay away. I have held them in the past and can tell you that sooner or later someone is going to investigate these instruments as they are not properly formulated. For e.g. SRS is down (yes, you heard right, DOWN 20+% this quarter while real estate has cratered).
I am fading you bitches and sending my white leotarded plumber to your houses to blow up your heating systems.
I like lots of cream in my coffee too, asshole.
You do know, Chanos is shorting those private education entities?
Reason, why FXP is getting killed; Hong Kong is up like 40% since lows. How much more upside is there? Makes me say…hmmm; Brazil index (in case you are thinking of buying RIO) is also about something like 30% from lows.
I think oil at $40 is a bottom…
I feel like a gambling man, and I will GO LONG Goldman Sachs into earnings…
FWIW if it fits your style, you may want to short the ETFs, to be on the winning side of the house. I had tweeted:
ETFs fall faster than they rise. swing (one to four days) trade them. @steenbab ETFs better for trading than investing http://rurl.org/18qd
Text from that link: “the answer might result in the decision to go short the Short ETF, when you intend to go actually long or Short the Long ETF, when you want to short.
That way you would trade the fund side of the ETF investment game and no longer the investor side. Investors buy either long or short ETF’s, the Fund sells them and is therefore always Short.”
The $50 bill mostly changed hands? – Bernie probably just skimmed off some millions – the rest was used to pay the 13.5% return? Or, maybe Bernie tried his hand at investing and lost his ass?
On the eve of ARMageddon, and all through the house, not a creature was stirring, except for Fly playing for a bounce. I always wondered why a pro would play ETFs especially considering the bite those bastards take.
The Oils keep going higher and higher. XOM close to a 20 day high. Has it gone too far too fast? I realize that it is benefiting from run up in oil with OPEC saying they will cut production. But with the continuing demand destruction and the current over supply is XOM getting ahead of itself?
j – $17 B under Madoff’s mgt according to SEC filings earlier this year. $50 B in losses according to what Madoff told his sons. Who knows where it winds up. Probably somewhere in-between. Still, it’s a shit pot full of money. The nice thing though is that it won’t lead to a ton of forced selling. There aren’t assets there to be sold. It’s just an evaporation of fabricated wealth.
More people on TV calling the end of NOV the bottom. this makes me even more bearish as the herd gets sucked in
Watch out bulls
http://www.youtube.com/watch?v=Ob_oD1IsYbE
I may be wrong about last night. Damn gas fumes.
In a regulatory filing, the company [COF 26.82 -1.30 (-4.62%) ] said the annual net charge-off rate for U.S. credit cards increased to 6.98 percent in November from 6.54 percent in October, while the rate for loans at least 30 days delinquent rose to 4.70 percent to 4.48 percent.
Net charge-offs reflect loans that a lender does not expect to be repaid.
Bernie’s home at 410 North Lake Way in Palm Beach can be seen on Google maps except that it is so overgrown – it looks like a semi-tropical jungle – odd, no?
market may rally, but i sense somme global political warfare brewing. Israel will be in danger.
FAZ is wrecking house today. Are you sure you’re done with 3x ETFs Fly?
What’s his street address in NYC I know it’s E 64th street?
bah. i should have bought FAZ again on fri, but i went to all cash and didn’t wake up until well after the open today.
the trading action right now is identical to last spring: oil/metal/seeds
it almost appears too easy, though, which makes me hesitant.
Market weakness a result of Bernie Madoff’s selling from his Swiss accounts. He needs to raise $50 Billion to pay the lawyers.
President Bush won’t be making any further public appearances this week. As a joke, Cheny superglued a shoe to Bush’s nose while the President was sleeping last night. Poor George is yet to figure out how to get the shoe off his nose.
Shocker!
SEC investigated Madoff in 1992, and issued him a “clean bill of health.”
Are there any more useless “late barn door closers” than our regulatory authorities?
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never mind
Anonymous, that’s normal for a house down here (especially if you want some privacy), my back yard looks like a tropical jungle too.
da dolla goin’ all kamikaze.
I also tweeted info from another link:
—
smarter to just short the 1X ETF like XLF or IYR rt @mreb Beware of 2x ETFs like $SRS $SKF $FXP
http://tinyurl.com/6zce4p
—
Anybody know a 1x ETF for TBT?
Boca, Bernie’s neighbors are not all grown up as if they have something to hide. Palm Beach homes on the beach side even have low walls in front – I wondered why have a wall that someone could simply step over – it’s because of the view, of course – low wall does not block the ocean view.
Jamie Dimon says that they are having a hard time unwinding the shitty assets from Bear Sterns. I venture to say that WAMU has even worse shit on their books and JPM may have a harder time with those shitty assets. JPM is weak today and it could get weaker. They may be on the road to $25 a share soon
Letter to the bank
Dear Sirs,
In view of what seems to be happening internationally with banks at the moment, I was wondering if you could advise me correctly…
If one of my checks is returned marked “insufficient funds,” how do I know whether that refers to me, or to you?
The most concise explanation of the sub-prime mess that I’ve seen.
_________
j is likely sleeping, but this is one for his side.
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closed my short iyr positions because this shit is getting boring.
I tried to short TLT but no shares were available.