Thursday, December 4, 2008

Whippy, Then Down

Another whippy and jerky day on the street. Oil broke $45 and will probably land on $25 before it's all over. I'm just wondering how long before Russia, Venezuela and the Mideast goes out of business. Can't wait. When your only other product is sand, rain forests and ice there may be a problem on a going forward basis.

A perfect indicator of the tentativeness of the market was the strong rally in XLF on great volume, only to be turned back and sold aggressively. When stocks and sectors give up the goose on big volume like that it's not usually bullish. The big question is the unemployment figure tomorrow. As I said this morning, bets usually get taken off before this piece of data. Goldman is at 400,000 and I'm hearing estimates as much as 500,000. We'll just have to wait and see but a number under 400,000 could goose the market. It's a backward indicator and I think numbers will get dramatically worse going forward so I will be shorting any rally tomorow. But that's just me.

I'll be around later with more riveting commentary and winning picks.


Anonymous said...

No kidding, $25 oil? Personally I'd love to see it since it hurts Iran, Venezuela, and Russia more than us -- and I'd like nothing more than sticking a banana up their collective pipes.

diesel said...

Whats your take on the long bond. I haven't heard your opinion on this before.

upsidetrader said...

i think the fed takes us to ZERO interest rates by January, i also think the fear trade gets put back on so lower rates and higher bond prices

Troy Peterson said...

Hey upsidetrader, not to burst your mini-fear-bubble...but the fear trade never got taken off. In spite of stock rally over past two weeks, treasuries have gone up almost every day (fed manipulation/monetization/whatever?)

Also, real rates are nearly zero already, so whether the official target rate goes to zero or no, real rates are below 20bps right now.

Dax Desai said...

I just saw a Merril analyst predicted $25 oil for next year. I take analysts with a grain of rock salt. Given the global recession seems likely.

With $25 oil I suspect we'll see some uptick in arms sales from Russia as that's their go to when commodities are down.

Long AK47's, Short Hybrids

About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.