Thursday, March 20, 2008

March Madness Begins...

My apologies for not posting earlier today. I had a date with March Madness, so I was concentrating on far more important things, like filling out my tournament brackets along with getting comfortable in front of the TV. I read recently that the NCAA tournament is second only to the Superbowl in popularity. Enjoy the madness !

Many are talking about the dramatic ongoings in the credit markets. Many market watchers are discussing the 3 month treasury bill yield and offer much more insight than I ever could. The 3 month bill is currently yielding 0.57% vs 2.25% for Fed funds. I found the following chart which shows the 3 month T-Bill yield vs the S&P futures and thought you should see it. The while is yield while the red is the S&P.
The chart seems to show some correlation. Does anyone want to hazard a guess as to what has the credit markets so panicked yet the equity markets seem oblivious to? This chart should go a long way to explaining the rationale for my incessant 'short bus rider' comments towards the general equity trading population.
I don't know about you but the above chart has me extremely worried. This is happening after all that the Fed has done rate cut wise, not to mention opening the discount window to everyone and backstopping the JP Morgan/Bear Stearns deal. Check that thought, I'm not extremely worried, I'm petrified. The chart makes me think I'm not short enough. I hope all of you have taken precautionary measures (regarding you cash and deposit assets) to protect yourself against the fallout from this. Believe me, it's gonna be breathtaking. And what if all the fear mongering, short selling, pessimistic curmudgeons (like myself) are wrong. Well then, protected yourself was an inexpensive exercise that took some of your time and effort, not much else.
Housekeeping notes I was stopped out of USO at $79.60 as it gapped lower thru my stop of $80.80 this morning.
I am adjusting my stop on AGCO down as a staggered stop. 1 unit at $56.65 and the 2nd at stop $58.10 in an attempt to not let a winner turn to a loser.
Enjoy the long weekend !

Good speculating to you all.

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 2 units Ultrashort Xinhua China 25 ticker FXP @ $84.55 stop at $80.30
Long 4 units Ultrashort Dow 30 ticker DXD @ $58.00 stop at $53.10
Long 3 units Ultrashort Emerging Mkts ticker EEV @ $82.15 stop at $76.90
Short 3 units of Deutsche Bank ticker DB @ $117.15 stop at $119.40
Short 2 units of AGCO ticker AG @ $60.15 stop at $58.10 and stop at $56.65

1 comment:

Anonymous said...

It's still the TED spread: