Idea Of The Day Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Idea Of The Day

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: IQBAL LATIF who wrote (39677)	5/16/2001 7:07:27 AM
From: IQBAL LATIF	Read Replies (3) of 50167

Sometime entrenched bearish feelings lead market to selling pressures, FTSE is one example today, the unemployment figures came out at 25 years low but market sold off, yesterday the market sold off as the FED statement lacked guidance on economic recovery. Now on Friday last when retail sales spooked the bearish sentiment the strong number led to selling as the market decided that this strong number reduces the chances of a cut but yesterday FED allayed those fears and delivered the cut and promised an easing stance for 28th June. Market thought that why the FED did not comment on state of recovery or guided that economy will recover rather hinted a slow down in capital expenses for corporations as continued. They finally succumbed to the ‘dumb pressure’ and sold off towards later part of the sessions as anticipated.Whichever way you see market likes to sell and that speaks what kind of sentiment we are working within! FED cuts and hints future cuts the market is not happy, GDP comes strong and retail sales are better than expected and stronger number is hated for FED inabilities. The FED if it was so intelligent would have not raised the rates to 6.5% at the first place and would not have waited until 3rd Of Jan to cut. By hindsight we can say that they know about economy as little as the guy who has span as short as next session. The FED will depend on the numbers and stronger numbers anyway lead market to sell, as market thinks Fed ability to cut diminishes, now the whole issue is that we need to see continuity in stronger numbers that will save the market from breaking here but that itself contains a germ of doubt that of ‘inflationary fears’ hence the rising yields on long bond. A market is in a stalemate it wants to sell on good news and bad news anyway will lead to selling, in such a case only stronger numbers will help the situation those cannot be ignored for far too long, although the chances the we sell hard on DOW if CPI is not in line as BKX get hit remain on stronger number but it will be stronger numbers only that can save this market from breaking here. I see a possibility of nice decent sell and I will like to provide for that in my strategy, a collection of puts with some number of covered calls is the strategy now, we will like to see 1228 and action at that level so would 2000 Comp come in play but the whole issue is muddled with lot of contrary argument and these contrary argument have this tricky history of washing off in face of facts. I am going to play this game the way market wants in face of increased bearishness but keeping in my mind that if history has to believed the rising liquidity the shape of the 30-year bond yield curve all point to a recovery that will hit 1328 on SPX to retrace from that point will be a more credible move. In the interim play with 1213-1267 band with ease. That is exactly I am doing selling some calls that protect nearly 35% of my portfolio and buying some bonds here for hedge and investing the premiums on some puts.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next