Tuesday, September 16, 2008

More Fireworks ?

I was stopped out of my TBT position late yesterday at $59.50 for a 2 1/4pt loss on 1 unit. The volume swelled into the TLT's which tells me the flight to safety and fear factor is running full bore. I will take my small loss and head to the shelter of the sideline.

I most likely will be stopped out of my long DIG position as everything is getting thrown overboard. Lots of small losses I can live with. Too bad the brokerages and banking institutions didn't think the same as we would all be better off for it.

Everyone keeps claiming the market is not trading on fundamentals, to which I would reply, this is a direct result of the opacity and lack of transparency in the markets. Nobody trusts nobody and it is a direct result of prior actions and behaviour. This entire situation is going to take a long time to repair, I say this as a warning to all those out there who think being a contrarian is to buy into this hole this morning.

Sitting on your hands would be a wise decision. Positions need to be put on during the calm BEFORE the storm, NOT DURING IT !

The market seems to be expecting 50 beeps as a rate cut from the FED. I would suggest you be prepared for 100 beeps.


Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $97.66
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

5 comments:

Anonymous said...

I enjoy your blog very much -- and you're a man of true humility. Thank you for your work

Sean

Anonymous said...

I don`t know what the fed will do but it doesn`t matter...Doesn`t change anything...The Fed cut the rste agressively from 5 to 2 and look at the mess...

Harleydog said...

Sean,

thx for reading and your kind words. much appreciated.

HD

Harleydog said...

Anon,

agee, Japanese took em' to zero (ZIRP)and look what it got them. We are falling headfirst into a hole of enormous magnitude. They just do not get it. I am very sad but I am more afraid.

HD

Shawn said...

Hi Harleydog,

Thanks for your great work here.

You might think I am crazy, but I think you should consider re-shorting TLT.

It has been my high conviction investment over the last 3-4 months, but I have finally lifted my stops to $99.73 and I am out.

I am learning charting from you and others, and mix in some macro/global economics where I can - so I cannot give you a rock-solid TA on this situation, but here is where my head is at:

1. TLT trades up on fear in the financial sector - seems like we have sort of peaked on that front... and, on a relative basis, I expect that to recede in coming days and weeks.

2. If you were heading a foreign central bank/SWF ... you might want the safety of the US for the next 3-7 years, but you are probably asking yourself whether 30 years from now the UST will have the reserve currency premium that exists now, and you are probably also thinking that at your next investment committee mtgs you will be hearing recommendations for lower allocations to long-term UST vis-a-vis other alternatives in view of the clear questions marks about the US and it's financial system that have been on display this week.

3. Interesting market action today. TLT was only up 0.50% whilst IEF (7-10 Y) was up 0.90% -usually not the way the price action works. I don't all the reasons why else this could happen, but to me it looks like "truly" risk-averse buyers are going very short term and long-term viewers are seeing *issues*

All my best,

Shawn