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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: TFF who wrote (77728)	11/23/2007 3:12:22 AM
From: Real Man	Respond to of 94695

Message 24076769 I have to agree with that. 1) Nobody is scared of a 10% correction - Fed is coming. Yet, it's a different place for the Fed now, with the dollar dropping significantly from August, and oil going to almost $100 from $70. They could be more reluctant to cut now. If they do and oil soars to 150, cuts won't be effective. In other words, it is much more difficult to be in the Fed's shoes now than it was in August. 2) This is very large relative correction on a scale of 2-6% corrections that were norm during the entire bull market. August was much larger than about any correction prior to August, and we are now around the bottom of the ride. 3) Volativity has a bullish chart. Put shorting is off scale compared to "portfolio insurance" of 87. 4) Being long stocks with protective put positions is equivalent to being long calls, if that's what the investing public has been doing. WS and gang lost August expiration and November expiration. This did not happen for the entire bull run. 5) I'll try some CALLS - yes, calls, cause we are extremely oversold. However, a) this is only a trading position; one has to be concerned about safety of an investment position. b) have to be nimble, as the rally could be sharp, but it can reverse and BK in no time at all. Technically, one could regard the whole August-October rally as a corrective rally, which means we BK now. I think this is how the interim bull market (yes, we are still in a bear market that started in 2000, since the dollar is much lower) will end, because of enormous leverage in the system. Is it NOW or LATER? That's a million dollar question. Lots of cheap puts were available prior to 87, but nobody was buying -g- The only thing that significantly differs now from the 80-s is the T-rates. So, it is possible we have a rally that goes to new highs. However, some very nasty stuff is going on outside T, with other bonds in a bear market, spreads widening dramatically. Bond folks are jumping out of the windows. Nothing ever the same, more puzzles. -g- Gold is "safety" no matter what, and at this point I consider T ridiculously overvalued, given the dollar drop. It too can have sharp drops -g-

To: TFF who wrote (77728)	11/23/2007 3:46:08 AM
From: Real Man	Read Replies (2) \| Respond to of 94695

Yep. We are in the midst of Argentina-type currency crisis, with the Japanese Yen now leading the pack of currencies higher. Fed cuts or prints, and the dollar drop will accelerate into a free fall - wait, it IS free falling. Waiting for gold to break its all-time high and go into overdrive. Gold is FEAR, and soaring gold is never bullish for stocks. Sometimes it's possible for stocks to soar in local currency terms, but never, ever in real terms. Usually, when a currency crisis leads to stocks soaring in local currency, it is much more severe. 72 should provide a bounce for our beaten down currency.