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money investment, day trading
[Weekend Summary]
Dear Member:
What a wild week in the markets! I've been warning about a bearish tendency for the past several weeks. In many respects, the past few weeks have been a demonstration of how emotions can control the movement. Of course there have been credit issues and as soon as some money was taken off the table the markets began to descend at a faster and faster rate. The fed move to lower the rate before market open on Friday served to turn things around, perhaps more quickly and with greater acceleration than logic might have dictated. By the way, do you think the fed cat may have been out of the bag to some of the big boys before the public announcement? Just look at the market behavior on Thursday -- a big reversal after the markets were really tanking. I don't know, probably just a coincidence that the announcement came the next morning. What do you think?
In my estimation, the fed action was good, but just a band aid. If we think there are problems with mortgages, what is there with credit card debt? That chicken will come home to roost one day and will rock the markets. The credit card companies were smart to lobby Congress to protect themselves when the recently revised bankruptcy laws were enacted. It seems to me that while there has been a little fix with the fed action, the credit problems have not disappeared. For that reason, I believe those with hedged positions who are also watchful for a return to the bearish side may be well served. That is not to say that bullish plays cannot be profitable. The bulls just need to continue to exercise caution and realize that one day does not a rally make.
Once, again, I wound up taking a profit very quickly. This time it was on SDS, the ETF that moves double the inverse of the S&P 500. I thought there might be a number of plays to come on SDS until the somewhat weird recovery Thursday afternoon. It is definitely an investment to keep at hand when the markets turn down again.
Realty Income (O) had a great move back up (more than $3) over the last two trading days.
Evergreen Income Adv Fd (EAD) also jumped back up $1.13 a share over the last two days and continues to be a good income producer for me.
Palm, Inc. (PALM) also has shown renewed strength after testing old support from which it bounced earlier this month.
I continue to hold the DB Commodity Index Tracking Fund (DBC) both as a hedge and as a pure directional play. If you know anything about candlesticks, take a look at today's crazy candle on DBC. If my service isn't just screwed up, it shows that shares of DBC sold as low as 49 cents (has to be a mistake) before closing at $25.16. I know of no way that the commodities index could fall so low.
Anyway, a pretty good week in that I took a profit and my other bullish positions were not destroyed by the market movements over the past weeks.
Have a great weekend.
Bill
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