Many here are expecting a bounce. While I agree it would be normal and healthy for a bounce or reflex rally to occur, I’m not so sure it is time, yet. I think there is much, much more bad news coming to the markets. For example, look at [[MBI]], and some of the other bond insurers. Who wants to be long, “playing a bounce,” when those geniuses announce bankruptcy? From Barron’s Online: “The reasons behind the latest collapse are several. Worries have grown that MBIA’s statutory capital….will stand at around 8 billion — won’t be enough to make good on the subprime-securities default risks embedded in a $652 billion portfolio insured at par value.”
Still, I can understand the need to buy something, after being biased long for the last 5 years. Just beware that any bounce may be very shortlived, and it may turn out that we consolidate, more than bounce, before resuming the downtrend.
I’ve charted 3 stocks from the Healthcare sector, as this sector has showed great relative strength during the sell-off. I’m sure many of you want to buy [[AAPL]], [[RIMM]], [[MOS]], and [[MON]] on a bounce. I think that is not smart. Why? Anyone with a margin account is going to short the daylights out of those names, on a bounce. They will not lead when the market turns around for good. Instead, buy names that have shirked the sell-off and are looking to breakout, rather than buying weak names that are oversold.
[[VVUS]] is the first chart. From Yahoo: “VIVUS, Inc., a pharmaceutical company, engages in the development and commercialization of therapeutic products to treat obesity, post-menopausal, and sexual health in women and men in the United States.” Yep, this is the stock for Danny.
Whatever you choose to do, be careful. While the 10% reflex rally has been a reality of previous bear markets, I’m still not convinced that enough of the bad news has been released and digested for a rally of that magnitude to occur. If pressed, I argue that we consolidate here.
that was short lived.
good luck in 08.
– stripe “the greedy gremlin” spammer.
Funny how the spammer word caught a blue line.
Irony.
Wood:
You’re smoking jumbo crack if you choose VVUS over RIMM or AAPL on a bounce.
Stocks snap back hard for two reasons:
Natural buying and short squeeze.
All of the stocks you mentioned will move 10-20% on a sharp rally, while VVUS will suck balls.
FLY- VVUS will trounce AAPL and RIMM on a bounce.
Gentleman’s wager?
Shred: Super call on IFN. Gonna get shredded tomorrow.
You know which one we missed?
RSX
that one made a clean break & is headed for the chopping block tomorrow as well
Shed, I hope got gobs of IFN and INP short… you can buy yourself out of indentured Fly-itude tomorrow, perhaps….
http://www.youtube.com/watch?v=rCtQL5b_rCM
a trade blowup Jan 21st 2008, Let this be a lesson to future’s traders.
Are you suggesting I bang post-menopausal women? I think my dude would be fucking pissed and extremely disappointed if I downgraded from 20, toned, and tan to 55, saggy, and moribund.
Of course, if you are a single mother reading this and you desire the company of a spry adonis, you know where to find me. Who knows, maybe for a nominal fee we can talk on the phone.
I am still in agn, though just 50 shares. tits never go out of style. silicone, dermal fillers for those 55 yr olds I want to bang. Also, botox, curer of stuff. Good article, Shedric, I’m liking AGN, hopefully it gaps down less than everything else tomorrow.
Nah, Danny, I just knew you’d like to know everything will be okay when you have no choice but to bank 55 year old women.
Juice, good call on RSX. Damn clean break, with Ivory.
Jake, I added to shorts Friday, but not to IFN, unfortunately. As you know, the internationals were trading up and I was concerned about a bounce. So, not enough to get rich on, but enough to continue making January a KILLER month for percentage YTD.
A short-term bottom seems to be in. Just purchased your VVUS at 6.00 today when the market couldnt go lower. Stops are at 5.70. Thanks for posting the stock last week — it looks great. Good work!