RANDOM THOUGHTS ON MR. BIPOLAR
21 August 2009 by Cullen Roche
13 Comments
- As I traded HK time last night I mentioned that this market is like a bewildered drunk who can’t find his way home. There was no way those 80 points down were going to hold on….The bears never had a chance with Mr. Bipolar hitting the bottle so heavily in recent days.
- My concerns about “better than expected” this week couldn’t have been more right. So how come my portfolio is flat on the week?
- How long can the market trade higher on a crashing dollar and soaring oil prices – both of which are an inherent negative for the U.S. consumer?
- The Baltic Dry Index continues to crash. Does it even matter to Mr. Bipolar?
- The assault on the commercial paper market is relentless.
- Hong Kong finished in the red again last night. How long can this be ignored? Or is it Shanghai we should be worried about? Or is it the Shenzhen we should focus on? What about the A shares, H shares….Don’t worry, it took me years to understand the markets in Asia….
- Is the Goldman Sachs 1060 price target 2009′s destiny? Lord knows they’ve gotten everything else they asked for this year….
- It’s amazing how quickly sentiment changed last week….
- Was I being too conservative with my SP 1,000 target?
- The urge to jump in the water is strong, but robots don’t function well in water. I remain mechanical in my trading. Is the risk of the next 5% worth a potential 10% decline?
TPC – with the BDI falling again today, it seems very similar to what happened last year around this time as the Olympics were coming to a close. The market still does not seem to care, should we no longer care about this Index?
The BDI has been a very poor indicator of future stock market performance. I would focus more on China at this point if you’re looking for an indicator of global economic strength.
This move in stocks is starting to get that crescendo feeling. The “f*ck it, just buy anything” sort of mentality. The shorts will need to capitulate here soon. It still blows my mind that we’re seeing so many shorts and covering. They never learn….
I think most shorts have capitulated. At least on the blogs I read.
Today has that feel huh prescient? Did you go long Yen? I can’t believe I missed this upside. I hadn’t missed a short-term move in the Yen all year….
Yes it does sir. I am actually long the USD against the Yen right here. And will average down when I think it is appropriate.
I think USD is due for a rally. If not, I’m closing out of a lot of my positions…
I consider this to likely be a blow off top. New home sales up and we get this??
This is pure mania.
As you likely know, I too am long the dollar down here. I am down marginally on it, but expect a 5% pop here in the coming months….Paired her with a Canadian $ short which has not been friendly too me in the last three days. If oil blasts higher here in the coming weeks (on idiotic hurricane chasers) I’ll likely double down heading into the fall.
Nice TPC, I like that a lot. Considering how much debt they are trying to sell, and that they can only buy so much indirectly POMO, I think that is a terrific play.
Jap. govt. will be more aggressive in fighting deflation and making sure their auto companies can be profitable. I think that will push the USD/Yen back to near 97.
TPC,
Don’t know if you saw this from Jason Goepfert:
http://sentimentrader.blogspot.com/
Interesting take on this week’s semiannual Fed brief to congress…
TPC,
I wonder what data ECRI is seeing, compared to BDI and rail traffic, I know that many companies are in much better finacial condition than the consumer:
http://www.businesscycle.com/news/press/1538/
Van,
Thanks for the link. I mentioned this last week. I have no idea, but people love listening to this bozo speak even though he was wrong for the first 3 years he was fed Chief:
Friday: Housing data and a Bernanke speech – every bulls dream come true. The market is infatuated with Bernanke these days. After years of failure he is seen as having the golden touch. Give him 10 years. I’d be willing to bet anyone that he goes down in flames due to the same destructive monetary policies that destroyed Greenspan’s reputation…
THis market has to be overbought but who is still buying? People with cash on the sidelines will not be jumping in after a 50% move unless they are speculators or just plain foolish. With those liquidity provides (and raking rebates at no risk to them), you only need small volume to bid up a stock 2%-3% then the liquidity provides jump in and support the stock at that price for hours looking as if there is ample volume going through until the next fool gets suckered in thinking everyone is in. Obviously this can go on forever but the end result will be catastrophic if things dont improve or when ppl finally dont feel compelled to buy companies at astronomical valuations.
You can see this a lot during the rally where the markets plateau for a few hours, like today with the Dow stuck between up 120 to 140.
Who benefits from increasing their already established low cost basis? Who has transferred their entire revenue stream from securitization to trading? Who has oodles of cash on their balance sheets just sitting their waiting to be loaned out, but isn’t being loaned out? I’ll let you guess who is driving this market.
The banks will report spectacular trading profits again next quarter. The hedge funds are all piling into the bank stocks for this reason alone….The game can continue until someone pulls the rug.
I think it’s clear, the banks are using the markets to recapitalize — as much as possible.