Comments on: “THE SITUATION IS GETTING WORSE”

By: jc

jc — Tue, 23 Jun 2009 12:25:57 +0000

Dude,

this “postal worker sounds awfully like a college grad. Doncha think. This isn’t the writing of a postal worker.

By: ejack

ejack — Tue, 23 Jun 2009 05:52:45 +0000

This is the only week I’m afraid of… GDP and the other numbers may be enough to spur the markets up. Other than that, I think the markets will go down based on the low volume. My theory is that volume is low because hedge funds have gotten out of the market to lock in their gains for this quarter. They are risk adverse after taking a beating so they will stay out until after they can print their statements to their customers showing substantial improvements after the 1st quarter. They can afford another quarter of withdrawals.

The thing that supports this hypothesis is the fact that the daily ATR was below 20 (until today), which was the high water mark for volatility up until July 2007 – when the uptick rule was revoked. I think that means hedge funds are largely out of this market right now, and explains the complete lack of volume.

After July 1st, I think markets will rally again.

Also in an anecdotal note: one of my friends works for one of the largest banks in Canada. He works in the unit that handles wire transfers and apparently transaction volume has plummeted by 70%+ since last October. Volume has picked up yet, but it has definitely stabilized since the lows.

By: AndyD

AndyD — Mon, 22 Jun 2009 19:57:41 +0000

I don’t want to be short into the rest of this week. wait until Friday and then look to get short into the rest of the summer. Oil will roll over and when it does it will take the whole market with it.

By: TPC

TPC — Mon, 22 Jun 2009 19:53:30 +0000

Eric, I am not repositioning my portfolio despite what looks like upside risks during the rest of the week.

By: Eric Sebille

Eric Sebille — Mon, 22 Jun 2009 19:18:45 +0000

Anyone else taking advantage of the dips in the momo’s for potential quarter end mark ups? I covered my RIMM short and bought some AAPL…cant get a good feeling whether they will mark them up or all the hedgies will look to lock in profits.

By: anonymous

anonymous — Mon, 22 Jun 2009 16:57:40 +0000

great stuff TPC. thanks for passing this along.

By: Rich

Rich — Mon, 22 Jun 2009 16:40:09 +0000

The Coke guy who delivers my bottled water also works nights loading planes for UPS. At last Wednesday’s (June 17th) delivery he told me that their volume had dropped by at least 30%. The regional airport where he works at is in a Midwestern town of 150,000.

I talked extensively this spring during matches to the mother of one of my son’s soccer teammates who works in a regional administrative position for the USPS. I forgot the details but the drop in volume and revenue was staggering. She was certain that attrition wouldn’t cut staff adequately. She claimed at that time they were considering laying off anyone with 6 or less years of service – nationwide.

By: HankB

HankB — Mon, 22 Jun 2009 16:33:45 +0000

MailNudity & Anonymephistopheles,

Mail might be a declining industry, but more important is the fact that this person is seeing no signs of volume recovery. You both overlook that fact in your analysis.

By: TPC

TPC — Mon, 22 Jun 2009 16:30:41 +0000

Good comments. One data point clearly isn’t necessarily a good representation of the entire country. Divided, this reader is from Washington where the recession has been bad, but not substantially worse than anywhere else.

By: Divided States of America

Divided States of America — Mon, 22 Jun 2009 16:25:32 +0000

Would be nice to know which part of the country this person worked because some states have taken a bigger hit than others.