Monday, September 13, 2010
BBY
I believe reports earnings tomorrow, before the bell, it doesn't look especially strong, it looks a bit weak, but so does tha market, still we may be seeing a leak. I would treat this as a very speculative earnings play on the short side if you took it, if they come out strong, because it's before the bell, you'll have a gap up that you can't protect against. It may be worth a shot, although I'm not a fan of earnings plays, but it must be kept is SPECULATIVE perspective.
12 comments:
I believe retail sales come out in the morning, that could be a game changer. If the market wants to go down, it would be better to gap down huge as the market makers arn't forced to make a trade on higher prices when their might be little to no buying.
Jack, Brandt, anyone,
You're thoughts on this:
http://market-ticker.org/akcs-www?post=166522
Looks the best reasoning yet for a 'big hard sell off'?
Jack think of it like this, the proponents (of which there are many as human nature is inherently bullish when it comes to the market) are all looking at the right side of the bigger H&S top and seeing an inverse H&S bottom. The neckline there is around $113.25 on the SPY, so a gap above that level represents a breakout of that bottom pattern, that's the best, easiest way to get retail in the market. The market maker may already be net short and out of inventory (generalized example). One of the advantages of making a market is your ability to go naked short, so for the MMs, that would be a field day. .
Mr. P, let me read the article....
Not sure Mr. P. While the dollar was being openly sold off, 3C was showing accumulation in UUP all day, again the dollar index is one of those tickers I can't get intraday info on. The dollar did cross below the support of the bull flag, on accumulation, considering everything else was the opposite, I'm thinking the dollar will rally this week, possibly breakout of the bull flag, typically that means the market goes in the other direction and the market did put in a bear flag today which it broke out of on distribution, so we have two components that trade inversely, two flags-a bull and bear and the very often seen (I'd put the odds of a false breakout on either flag of that size at 70+% based on experience) possible or probable false breakout in each while the bullish breakout occurred on a negative divergence and the bearish dollar breakdown occured on a bullish divergence. Remember the oil trade a few weeks back when Inventories came out and USO sold off, we saw accumulation into the sell-off and many members bought USO, it reversed and went up and they made money.
Interestingly, except for some EOD weakness, the underlying 3C trend has been accumulation in treasuries. So I'm thinking along these lines, the market is sold off, smart money has already moved either short or into treasuries and the dollar rallies at least briefly. That's just from what I see on the charts, no speculation or economic analysis.
Sooner or later something has to give, when the Fed announced to the public that it was going to buy our own debt, a problem starts to brew. Although they have been doing for awhile behind the scenes, now they are just telling everyone this is what they are doing. These are the first steps towards insolvency. It's like paying off your mastercard with your visa, neither of which you can afford to pay back. We are buying our own debt with money that we printed. Might as well be monopoly money, because at some point that might be all it is worth. What I see is a run off, and more than likely the bond market is correct. Below is the schedule of the upcoming Bond Purchases by the FED. They are putting money to work both Wed and Thurs this week as well as today from the previous announcement. I would say tuesday and
Operation Date1 Settlement Date Operation Type2 Maturity Range
September 15, 2010 September 16, 2010 Outright Treasury Coupon Purchase 9/30/2014 – 8/31/2016
September 16, 2010 September 17, 2010 Outright Treasury Coupon Purchase 3/15/2012 – 2/28/2013
September 20, 2010 September 21, 2010 Outright Treasury Coupon Purchase 9/30/2016 – 8/15/2020
September 22, 2010 September 23, 2010 Outright Treasury Coupon Purchase 3/15/2013 – 8/31/2014
September 24, 2010 September 27, 2010 Outright Treasury Coupon Purchase 9/30/2014 – 8/31/2016
September 28, 2010 September 29, 2010 Outright TIPS Purchase 1/15/2011 – 2/15/2040
September 30, 2010 October 1, 2010 Outright Treasury Coupon Purchase 2/15/2021 – 8/15/2040
October 5, 2010 October 6, 2010 Outright Treasury Coupon Purchase 9/30/2016 – 8/15/2020
October 6, 2010 October 7, 2010 Outright Treasury Coupon Purchase 3/15/2013 – 8/31/2014
Sorry, started the above post about 2 hours ago and got busy typing an e-mail to Brandt and a couple of clients called with questions, but it seems very possible as has been the trend that the purchase of treasuries would indicate fear in the market. Especially since this is where seasoned players put their money to work when they are scared. Right now the spread between the 10 year and the S & P seems to indicate one or the other is wrong. My bet is that the S & P is. Still doesn't make sitting here short any better, kind of like holding at 18 with the dealer showing an ACE. You hope he has something lower than a 7 to flip.
Mr Pink....the person who wrote your article does not a good grasp on finacial markets and thus the article can be thrown in the trash where it belongs.
Brandt, Anyone,
What do you think of this article regarding VIX futures:
http://www.bloomberg.com/news/2010-09-13/equity-bears-unprecedented-as-vix-futures-recall-history-s-market-rebounds.html
Seems like too many people are bearish? I thought a bull trap was being set-up? Still confident of a huge fall soon Brandt? We keep getting the 'indicators' and 'pieces of the puzzle' that seem to suggest a fall soon, but is it all too obvious? I certainly don't think retail are rushing to get into the market.
The sell off in "Mr Bucky" (ie USD) is totally consistent with the equity price movement. Treasuries rallied strongly too(out of usual correlation with equities...hmmmm) but i would expect USD sell off with such movements.
On such note...think it happens this week but there is more mischief than usual in this market at the moment...it's hard fighting Uncle Sam
Think about the article this way, it confirms what we discovered over the weekend about the rise in the contracts. We have a little insight that the buyers of these contracts are probably smart money. The article doesn't tell who is buying the contracts, and seems to indicate that it would be retail players. We know who really is buying. I would place my bets with what we currently know, even though it seems to be against us right now. I have a feeling that when this pops, you don't want to be out of position. Tomorrow and Wednesday we have an off day for the FED's buyback program. It would seem to me that these would be the ideal days for a selloff without the mischief. I'm not sure if the money gets into the market the same day or the next. If it is the same day, then the next 2 1/2 days may be ours.
Here is some interesting reading about the downright manipulation this administration is up to.
http://www.nypost.com/p/news/business/are_poll_workers_being_used_to_inflate_wPjTGS93ODzN8BXLg568iI
BBY was a top line miss of almost 300 million. It might make a good short in pre-market with the inital knee jerk reaction up. Risk managemnet will be key. They beat on eps, but looks like it was through cost cutting. We'll see as the full report is digested.
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