I just do not see it happening soon, but you never know! As for the equity markets, we seem to have slowed the sell-off somewhat, with PCR and VIX at elevated levels. I expect at least some bounce soon and then we continue with the sell-off until Fed cuts rates. I expect 50 basis points at the end January meeting- there is too much talk of recession doom and gloom. " The fastest-growing bet in the oil market these days is that the price of crude will double to $200 a barrel by the end of the year." - Bloomberg.com
Monday, January 7, 2008
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8 comments:
L
i would agree that we're probably close to some of short-term bottom with today's action. market failed to make a lower low today (10-day timeframe) and we saw big volume at the close today.
i think we could see a rally in the SPY back up to 144.50 or so, but, in my judgment, the market seems most likely to make yet another lower high which will be the fourth one it's made in the past 3 months. that support around 141 just continues to be hammered away at and the more times support is tested the more likely it is to break.
as for oil to $200, that sounds crazy to me, but then again when oil was at $50 two years ago i thought $100 sounded crazy. if this economy goes in the tank, oil will have a major headwind although i still think things would look good for gold and the metals.
IF the economy goes into the tank like Matt mentioned OIL IS NOT GOING to $200.
Oil to $200 by the end of 2008, I give it a 5% chance, only way oil gets that high is if there are major problems with the threat of oil supply to the US, meaning the straight of Hormuz is shut down. Or major hurricanes knock out oil supplies for months. In a recession oil will not rise as the demand will fall.
Major recession and oil will QUICKLY retreat back to 65 area.
Commodities will soon sell off as well, reminds me of the dot com bubble, we all know what this leads to.
by the I think the markets rally
Im in:
ITB today at $15.00, could easily bounce back to 17+ by end of Jan. Long ITB along with UWM.
Wow, no sign of the bounce yet, but I am leaning long rather than short here. Is there any more selling to come?
L,
The VIX is definitely overextended, but that hasn't meant much in the sell-offs the past 6 months. However, my put-call ratio indicators show we have not had enough put buying in recent weeks to support a bottom in the market yet - still 5-10 days away in my opinion....I am much to scared to short though with a rate cut possible at anytime.
L
this market was oversold, now it's even more oversold...but i don't try to catch falling knives.
with breaks of support in all the major indices, i think the market is finally starting to understand how serious this all is. a telecom company talking about "consumer softness," the nation's biggest mortgage lender caught falsifying documents, you add this with all the comments we've already seen and it just doesn't look good.
JBLU under 5 fellows...accumulation has begun...
Sold OTM calls in the QID on the close...nice premium.
SAR
A rate cut now that takes the dollar down and sends the Yen flying will spell disaster for the market. We've had 4 rate cuts so far. What has been the net result? Why would anyone think that more is better? The only time the market rallies is when the dollar is up. If the Fed wants to save the market it seems reasonable to conclude that rate hikes that strengthen the dollar would be more likely to do the trick.
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