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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Spreck who wrote (7318)	4/4/2005 4:34:29 AM
From: Walkingshadow	Respond to of 8752

No worries. As anticipated, already there seems to further trouble brewing with AIG: biz.yahoo.com There's also a bunch of stuff in Monday morning's WSJ, none of it good.... So your short position should do very well. I'll be watching AIG. This one can be repeatedly shorted as it rallies periodically into resistance. But right now, resistance is not well enough defined; I like to see reasonably stable declining moving averages arranged in fairly orderly fashion. These usually offer very nice entries for short positions. Since you are already short, a good stop would be just above the 40 ema on the 5 minute chart; this is currently at $51.40. Given the further storm clouds on the news, I wouldn't set the stop to closely to the 40 ema, especially because occasionally AIG violates the 40 ema briefly; you don't want to get stopped out on intraday noise. But if there is a dead cat bounce, the 40 ema will be the critical resistance, and a rally through that level with momentum and confirmation would cause me to cover the position. 139.142.147.22 The market looks like it will be on your side; index futures trading down a bit now, and oil is hovering below Friday's peak. Also, you probably read Reid's analysis for the coming week. This one will very likely turn out like KKD. One could just short the first rally as it runs out of gas, then forget about it, and just set a stop. Probably AIG will trade no higher than that for a long, long time. One thing I might do is divide the position in half... short the first rally into decent resistance, then trail a tight stop on just half the position, and wait to get stopped out. Then, use that half of the position to repeatedly short the stock, while maintaining a long-term short position with the other half. The advantage of this approach is that once you have a decent gain in the position, smaller and smaller declines translate to larger and larger profits, so with half the position you can take advantage of that. You can set the stop on this part of the postion very loose, maybe at break even or so, and breathe easier because you virtually cannot lose on the trade once you've gotten stopped out on the other half at a profit. This also allows you to set a looser stop on the trading half, thus minimizing the risk of whipsaw, and allowing you to be comfortably patient while the trade develops. And it is good training, because it forces you to follow the stock daily, and really get a feel for the personality of this type of stock under these kinds of conditions. You will meet these monster gap downs again and again, and they definitely have a particular style that you can tune in to, and capitalize on in the future with other similar trades. And, I think it prudent to always try to have at least one short position in your portfolio (more in tough times); over time, this will tend to reduce overall risk and total volatility of the portfolio---essentially, a hedge that has a high likelihood of profit. T

To: Spreck who wrote (7318)	4/4/2005 7:00:14 AM
From: Vendit™	Read Replies (1) \| Respond to of 8752

AIG Finds Efforts to Remove Documents in Bermuda (Update2) April 3 (Bloomberg) -- American International Group Inc., the world's largest insurer, said it discovered efforts to remove documents from its Bermuda offices without company permission. The company is cooperating with the New York Attorney General's office and U.S. Securities and Exchange Commission in regards to document security in Bermuda, New York and other locations, AIG said in a statement from Chief Executive Martin J. Sullivan. An attorney representing former Chairman Maurice Greenberg removed documents from an AIG office in Bermuda and loaded them into a van, the Wall Street Journal reported last week. On March 24, Sullivan sent security guards to Bermuda to make sure no documents were taken without authorization, according to the newspaper's report. Last week, AIG, which in February received subpoenas from New York Attorney General Eliot Spitzer and the SEC seeking information on policies that may have helped the company smooth earnings, said it engaged in improper accounting that may have inflated the company's net worth by as much as 2 percent, or $1.7 billion, during the past 14 years. Berkshire AIG structured transactions with reinsurers, including Warren Buffett's Berkshire Hathaway Inc., to manipulate the company's accounts, the company said in a March 30 statement. AIG delayed filing its annual report for a second time and said it may restate earnings or book a cumulative expense in last year's fourth quarter. On March 28, the company said Greenberg, who was ousted as chief executive March 14 amid accounting probes, would step down as chairman. Shares of New York-based AIG fell $4.46, or 8 percent, to $50.95 in New York Stock Exchange composite trading Friday and have declined 31 percent in the past year. The stock has dropped 30 percent since the Feb. 14 subpoenas from Spitzer and the SEC. quote.bloomberg.com