Kinda annoys me to say this, but I have to call it like I see it… the market looks stressed, and the SP500 will mostlikely break from the current support.
There is just too much negativity, and a lot of charts from individual stocks are looking like they will turn downward.
Becareful, despite the really low valuations, we might break down. (Usually I would overshadow the technicals for the fundies, but the transports, and some other index charts have already broken any sense of support.)
Be patient. The FXI looks as it wants to test the 22 level.
It seems stressed to maintain its mini uptrend, and pressured to test the 22.5 level. I’m not trading on it at the moment, but I will purchase it around 21.
“do you want to dance… or do you want to dance?” -Thomas Crown 
If you want to do the contango – tango with the USO, look to sell calls today (before the end of the month) or sell today, and buy back later next week.
The calls to be sold (to protect your position, but staying long oil) would be above the 50SMA, but below 32.5.
So the April 30 Calls look interesting. (For the record, I unloaded but will be looking to add.)
Now… if you do not like to dance, and simply hold a positon. You can buy the USO, and sell further out calls (ie 32-36 July). (Remember, the objective is simply to protect against the ‘tango’, not full protection against the thesis of oil.) So your betting the tango will not allow the USO to reach 32-36 by July, and protecting against that via the time decay of the sold calls.
Gold retreated from its overbought condition, and I covered my short.
For the record, I still hate the concept of the ‘long’ gold trade. But instead of staying short gold for my belief in the markets coming back to normal, I would rather be long certain banks. (ie GS)
Gaussian Copula Function… reminds me of the countless science fiction stories where dependence on technology made smart people stupid… really really stupid.
ie… the Schiff-sters of the world… The hidden consequence of their investment thesis is to have social unrest in the development world. (whether they know it or not)
Ultimately its an ‘end-game’ that too many people will do everything in their power to prevent from happening. (if I was in the position to help prevent it, I would do everything in my power to prevent it) —unless, the ultimate goal for certain people is to achieve this unrest. (and i hope our intelligence agencies are taking care of those people.)
I am seeing oversold conditions across the board. (Gold is the only exception.) The market is near its touched lows of Nov. The move is coming with a very oversold condition, and an increased negativity.
Seems like we are due for a bounce, and I would like to say we will, but the equity markets are pretty fucked up at the moment. Individual valuations are jaw dropping, but ‘it-is-what-it-is’ and we must deal with it.
Listening to my charts, I say buy. But its tough to simply say that at the moment. My long positions (PG, BNI, T and GE) are not doing so well. I mean I am getting my assed kicked, and I bought them when the SP500 was around 820 or so, and after their individual collapse, while hedging. I watch my portfolio values decline, and the bulk of those declines come at times when I think the market is too depressed and oversold to keep protection. (In other words, its a tough trading environment too right now.)
Despite the toughness we must keep going… thats what we do… I am interested in playing GOOG (June Call options) and JPM (common) for a trade on the long side.
Side Note: Just a reminder… the ‘comments’ function of the blog is not working because of some server corruption issues (from what I can gather), but its not working. So if anyone wants to comment on a post just email me at echo[at]echotoall.com (where, [at] = @)
Why should we (as people of a society) expect our professionals to act any different from their educators?
Harvard was caught with their pants down taking too much risk… so here is a questions… Were the ‘professionals’ simply acting on what they were taught to do?
I seriously believe business schools need a severe re-evaluation as to what levels of ‘risk-taking’ they are teaching. Seriously.
GE is truly sticking a large probe in my ass and causing great pain. I have owned this well capitalized p-o-s since 20-22. If anyone wants to know why it is going down, look no further than the XLF…
I thought their indurstrial arm, awesome earnings power and capitalization would provide some comfort to the terrors in the financial markets. But no, the market only sees the ‘blackhole’ of GE Capital, and nothing more.
Truly fustrating. The market has assigned GE the same fate as financials, when it is so much more. They are capitalized to handle this storm of earnings weakness due to their capital division, approx 60billion to utilize outside of diverted dividends. But they also can cut the dividend, and allocate approximately $13B in earnings (assuming 1.26 eps for 2009).
It sucks for Jeff Immelt, and he will mostlikely be the fall guy. He really did a good job positioning the industrial side of the company to really take advantage of the next great trend. The only thing he failed to do was to sell off some of the consumer driven businesses, and understand the severity of the credit crunch (which even the bearish of the bearish did not truly see the outcomes of the Lehman bankrauptcy), causing a failure to hedge their exposure.
I saw the clip of Rick Santelli’s Chicago Tea party rant. (video) Those cnbc folks love to rant and rave 
I agree with him and I am sure most CNBC viewers would agree with him, but I also see reality for what it is. Most, if not all, cnbc viewers are the ‘haves’ and so such a rant is great because you can relate to it. But the 3million that lost their jobs last year, or the other 3-5million projected to lose their job this year or the person who lost too much last year… the ‘have-nots’… probably want to throw Rick in Lake Michigan and have their own little Bastille Day.
And for anyone who thinks capitalism is threatened here, your wrong. Capitalism (or whatever you would like to call an ‘opportunity advancement society’) can not… CAN NOT… thrive with a too severe disparity between rich and poor. That is just a fact history has proven time and time again within various societies. There needs to be a sizeable middle class, but with the continued opportunity of advancement.
