The Coming Bear Trap

[blast19]

Just on Friday, he was saying homebuilders and mortgage companies were to be avoided at all costs. [/B]

At least he got something right.

One can only guess that the SEC alluding to a broad investigation of the lending market will be like a mating call to class action attorneys...they'll be going door to door asking who got loaned what by who...it'll be a 7 out 10 home-owner nationwide lawsuit...I can see it now. Attorneys will be seen driving around in S500s sipping lattes and frothing at the mouth.

 

[MaxLD]

Quote from ByLoSellHi:
"It's a valid point. I'm ashamed to admit I ever even bother with a glance at the screen when this clown's show is on."


Don't be too hard on yourself. I don't believe in horoscopes but occasionally glance at them in the paper. So it is with Cramer. It's just for entertainment. He's just a showman who makes his living from the media, TV and book deals...not from trading. People who track his droppings report that he is no better than a roll of the dice.

As for me, I believe we go much higher from here. For now I think the market is trying to test for a bottom. This shouldn't take very long at all. The subprime stuff will fade from the eyes of the news soon enough.

 

[Enfinity]

I will be on the other side of your trade. Yay for liquidity! When they are unloading the companies to the market again with blockbuster earnings I will be positioning defensively.

If Blackstone was IPOing 70% of their equity instead of 10% I would sing a different song.

Quote from ByLoSellHi:

I will wait until all these companies private equity bought at the top of the economic cycle see their revenues fall by 50%, they are respun onto the public market, at 20% of their respective buyout prices, and then I will become a bull.

 

[ByLoSellHi]

Quote from Enfinity:

I will be on the other side of your trade. Yay for liquidity! When they are unloading the companies to the market again with blockbuster earnings I will be positioning defensively.

If Blackstone was IPOing 70% of their equity instead of 10% I would sing a different song.

That's what makes a market.

You raise a salient point about the size of Blackstone's offering, but I wonder if they will really will retain such a large chunk of the company if the IPO goes as stellar as everyone anticipates.

 

[calibertrader]

Comparing the Tuesday mini meltdown to the '87 crash is like comparing Apples to Oranges. The '87 crash happened towards the end of a correction after the market had already moved down and Tuesday happened off of a 52 week high.

To think a correction can end in 3 weeks is also ridiculous since they tend to last 7 - 13 weeks and 6 - 9 months for bear markets (even though excluding 2000 - 2003) they lasted about 3 - 4 on average during the late 90's. Corrections/Bears also typically have 3 distinct legs down. This one just completed leg one. Aggressively looking at a daily chart you may argue it completed two.

To argue that someone looking at a longer term trading environment missed out on the 4/5 day rally two weeks ago is laughable, because you would have to be one accurate market timer to jump in after the bloodbath and get out before the market turned down again or hold somehow knowing it would turn up after two days.

Don't turn bullish just because the market moves up in the face of bad news, that's how they set the trap. Track the volume, if it continues at this paltry pace, then this is nothing more then a bull trap that will resolve itself to the downside well before we see 52 week highs.

Also, expect a potential high volume day to the upside, that may be the final weak shorts throwing in the towel. Capitulation works both ways.

 

[ByLoSellHi]

Where are all the buyers?

For all the bullshit talk being spewed by money managers, I see right through the lines, and I get every impression they'll be looking to sell every rally as stealthily as they can.

Massive money is flowing into fixed income.

Someone get me a trimtabs chart, stat.

 

[scriabinop23]

Quote from ByLoSellHi:

Where are all the buyers?

For all the bullshit talk being spewed by money managers, I see right through the lines, and I get every impression they'll be looking to sell every rally as stealthily as they can.

Massive money is flowing into fixed income.

Someone get me a trimtabs chart, stat.

massive money? the 30 yr is barely changed since the 2/27 correction. I would've thought this might have held its highs if there was a trend.

there is no trend.

 

[calibertrader]

Here's another controversial statement:

Any signs of multiple rate cuts would drive the market down not up.

You say I'm nuts, not really.

You see, if I'm a corporate borrower, and I can live w/o financing right now, why would I borrow at current rates, when I know I can borrow at cheaper rates in a few months. I know, they can always refinance. Not so easy, there's a cost to refinancing, that may offset the benefit. So you're better off waiting.

The sudden lack of financing has a short term negative economic impact and will be reflected in the economic #'s, which in turn gets the crowd to sell. As the Fed cuts, there are small rallies on the news, but the market will selloff afterwards until the worst of the news is disseminated and everyone thinks the end of the economy is coming, then we get bullish, just like 2003.

Remember, when I talk about the crowd, plenty of professionals are nothing more then that. There aren't 10,000+ smart mutual/hedge fund managers. LOL

Did I tell you how much I love the market.

Oh yeah, in the end I could turn out wrong. Got to love the job. But the differing opinions is what makes the market tick and setup for the next great trade. Just hope you are on the right side.

 

[MKTrader]

Hmmm, this thread is a little quiet today. C'mon, subprimes, carry trades, Dow 11,000 anyone??

 

[ByLoSellHi]

Quote from MKTrader:

Hmmm, this thread is a little quiet today. C'mon, subprimes, carry trades, Dow 11,000 anyone??

Yes. That's a young Ben Bernanke in the white cap.

Subprime is a non-event.

100% Up Room To Go!!!

Dow 1390 by year end.