If LEH goes under, what is the play? If we see a bloodbath in the SPY's then in my opinion we'd finally be getting close to a capitulation low. It's my opinion that the markets need a REAL failure to flush the system. Things always have to get worse to get better and continuously having the market saved by interventions and new regulations will not lead to a long-sustaining recovery. If LEH fails there will be an absurd amount of forced selling in the overall markets which will indiscriminately take the market to a point where, in my opinion, a real recovery can begin. I'm curious to know what other traders are looking for. I would like to see the VIX well above 30, another 90% down volume day, as well as a few other key sentiment indicators.
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What's the play if LEH goes under
- Thread starter drukes1234
- Start date
Quote from drukes1234:
If LEH goes under, what is the play? If we see a bloodbath in the SPY's then in my opinion we'd finally be getting close to a capitulation low. It's my opinion that the markets need a REAL failure to flush the system. Things always have to get worse to get better and continuously having the market saved by interventions and new regulations will not lead to a long-sustaining recovery. If LEH fails there will be an absurd amount of forced selling in the overall markets which will indiscriminately take the market to a point where, in my opinion, a real recovery can begin. I'm curious to know what other traders are looking for. I would like to see the VIX well above 30, another 90% down volume day, as well as a few other key sentiment indicators.
I'm right there with you.
I'd say play a straddle on the SKF tomorrow if someone can't wait to throw money on the table.
Or be careful and play SKF directionally.
I think when we find our next bounce like you are saying...the market capitulates and the VIX tops out, SKF should be an awsome short. I'd say go long UYG if your feeling conservative but I like SKF because it packs three to four times the volatility and action!
What if the 'capitulation' never happens because the big boys pre-empt the capitulation dive. Or just zig zag a few more times until the 'capitulationists' have been finally suckered into the rise, OMG I missed the capitulation, now it's going up, all in now!
A true capitulation would only be when there are no more prospective buyers taking advantage of perceived capitulation.. A capitulation buyer is dreaming of a V shaped recovery. Only in the absence of the V a true capitulation could take place.
A true capitulation would only be when there are no more prospective buyers taking advantage of perceived capitulation.. A capitulation buyer is dreaming of a V shaped recovery. Only in the absence of the V a true capitulation could take place.
Don't assume a thing here.
This type of situation has been the elephant in the room for the past 6 months.
It's a test of the mystery meat of the market. And it's easy to assume that the chain reaction theory comes to pass here, because I think that's become almost a default leaning for a lot of people, especially with the past couple weeks of erosion for the central players in the credit derivatives space.
But if we see a real actual occurrence of the wipeout and liquidation of one of those players, and the markets are able to find stability, we might just see a rush of demand in the crashed credit markets that have been basically frozen for the last year.
that would squeeze the hell of the spoos.
I'm short, so it's not my assumption. But I'm wary here. This is the test. and a successful one would kill that play.
This type of situation has been the elephant in the room for the past 6 months.
It's a test of the mystery meat of the market. And it's easy to assume that the chain reaction theory comes to pass here, because I think that's become almost a default leaning for a lot of people, especially with the past couple weeks of erosion for the central players in the credit derivatives space.
But if we see a real actual occurrence of the wipeout and liquidation of one of those players, and the markets are able to find stability, we might just see a rush of demand in the crashed credit markets that have been basically frozen for the last year.
that would squeeze the hell of the spoos.
I'm short, so it's not my assumption. But I'm wary here. This is the test. and a successful one would kill that play.