The stock market is a rigged game as far as I am concerned for short-term traders. Do not get into believing short-term news events. Short sellers continue to get squeezed out on any new news of ECB or Federal Reserve stimulus plans either real or perceived by investors. Usually the market moves up before any Central bank action and then falls sharply on the "actual event". Time and time again any further action has not worked. Continue to hold VIX and UUP as fundamentals have not changed. My opinion is that further central bank action is a long-term negative for the stock market as investors continue to "hope".
While we are waiting for some real economic change, I am looking for some positive groups or sectors for some long-term investments. Some real investment potential is ahead and as long-term investors you may want to take a look at Senior Living REITS, Heath Care REITS, and natural gas for potential positive areas once the major top is in place. The market has been prone to a sharp collapses in a short period of time so be ready when the drop occurs. The recent move up is not a surprise as Central Banks continue to manipulate investor sentiment. What is a surprise is most trading investors continued to be drawn into investing at peak prices by these actions.
Showing posts with label UUP. Show all posts
Showing posts with label UUP. Show all posts
Tuesday, August 7, 2012
Friday, July 20, 2012
I think one foot's off the edge of the cliff. Look out below!
Recently I was invited on a consulting assignment and now back in Iowa. Sorry for the lack of posts recently, but to me nothing has changed with the market. The stock rally has been minor on no major news events. The Wall Street spin on earnings releases and weak guidance appeared to be falling on deaf ears in most cases. A few stocks were pounded on the earnings misses recently.
Pay attention to the riots starting in Spain with the long term bond yield now over 7.2% in the country. No bread no peace!
With the U.S. corn crop now appearing to be really bad, the outlook for more strain on the U.S. consumer has started. The deflation process should now weaken end demand further ex food, and while I cannot predict a drought, the end deflationary environment for items other than food will likely lead to prices falling faster now. As far as positions I recommended, I would look to exit UUP on a move on the Euro below $1.19 to the dollar. Do not hurry and take your time as Italy will be next in line for funds causing more pressure on the Euro.
The VIX looks poised for a move sharply higher. The index has performed well despite the stock rally. I am buying the XVZ to participate in the stock decline I see straight ahead.
As a further note, if any firm would like to hire me for my services, I am in the market. Of course that has been the case for a while. Feel free to contact me with a post. However, as the way Wall Street works "bears are not invited" to the party. I will love to turn into a bull someday, but 2012-2013 will not be a pleasant experience for most of my former associates/co workers. All my friends on Wall Street I wish good luck and I may see you in the unemployment lines soon. I know many of you have expressed a desire to leave the business and I can understand why. You are the real heroes as you continue to try to help clients in a depression.
Pay attention to the riots starting in Spain with the long term bond yield now over 7.2% in the country. No bread no peace!
With the U.S. corn crop now appearing to be really bad, the outlook for more strain on the U.S. consumer has started. The deflation process should now weaken end demand further ex food, and while I cannot predict a drought, the end deflationary environment for items other than food will likely lead to prices falling faster now. As far as positions I recommended, I would look to exit UUP on a move on the Euro below $1.19 to the dollar. Do not hurry and take your time as Italy will be next in line for funds causing more pressure on the Euro.
The VIX looks poised for a move sharply higher. The index has performed well despite the stock rally. I am buying the XVZ to participate in the stock decline I see straight ahead.
As a further note, if any firm would like to hire me for my services, I am in the market. Of course that has been the case for a while. Feel free to contact me with a post. However, as the way Wall Street works "bears are not invited" to the party. I will love to turn into a bull someday, but 2012-2013 will not be a pleasant experience for most of my former associates/co workers. All my friends on Wall Street I wish good luck and I may see you in the unemployment lines soon. I know many of you have expressed a desire to leave the business and I can understand why. You are the real heroes as you continue to try to help clients in a depression.
Thursday, May 31, 2012
The Rain in Spain
The news releases from the United States were not positive as jobless claims continue to rise along with leading economic indicators and consumer sentiment surveys dropping.
The big news in Europe is Spain’s deputy prime minister Soraya Saenz de Santamaria is flying to Washington to meet with Tim Geithner and IMF director Lagarde. While Largarde has recently taken a harsh stance with troubled Euro countries, the near-term outcome does not look promising for IMF aid very soon. While I expect the IMF will be involved before the Euro crisis is over, the political debate between countries for an increased role in the IMF and world affairs will move to the front and center. Emerging countries appear to have the financial strength versus developed countries to be able to contribute.
While Bank of Italy’s governor Ignazio appear to be stating the obvious that investors now doubting cohesion about European governance and the ability to ensure the survival of the Euro, Italian prime minister Monti warned of a backlash against fiscal and structural discipline.
In Spain, banks are stuck with an estimated $184 billion Euros of bad property debt and the government just provided Bankia another $23 billion and most investors believe the bank is now nationalized. Look for the ECB and Europe’s political leaders to announce or talk about using the European Stability Mechanism (ESM) to provide liquidity to Spanish banks. After all, it is reported that $65 billion of withdrawals have occurred as Spanish citizens start to doubt the banking system.
An update on UUP. Since the low on April 30th, the Dollar bullish fund has gained 5.6% while the S&P 500 has declined by roughly 6%.
The big news in Europe is Spain’s deputy prime minister Soraya Saenz de Santamaria is flying to Washington to meet with Tim Geithner and IMF director Lagarde. While Largarde has recently taken a harsh stance with troubled Euro countries, the near-term outcome does not look promising for IMF aid very soon. While I expect the IMF will be involved before the Euro crisis is over, the political debate between countries for an increased role in the IMF and world affairs will move to the front and center. Emerging countries appear to have the financial strength versus developed countries to be able to contribute.
While Bank of Italy’s governor Ignazio appear to be stating the obvious that investors now doubting cohesion about European governance and the ability to ensure the survival of the Euro, Italian prime minister Monti warned of a backlash against fiscal and structural discipline.
In Spain, banks are stuck with an estimated $184 billion Euros of bad property debt and the government just provided Bankia another $23 billion and most investors believe the bank is now nationalized. Look for the ECB and Europe’s political leaders to announce or talk about using the European Stability Mechanism (ESM) to provide liquidity to Spanish banks. After all, it is reported that $65 billion of withdrawals have occurred as Spanish citizens start to doubt the banking system.
An update on UUP. Since the low on April 30th, the Dollar bullish fund has gained 5.6% while the S&P 500 has declined by roughly 6%.
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