Mon 1 Oct 2007
The Dead Whale Outside Wall Street No One Talks About
Posted by RichSlick under Watch Out
[3] Comments
I’m am utterly amazed. Oil at $80/barrel, gold at $750/oz, US$ in the gutter, banks in subprime meltdown, economic reports all bad and the markets rally on the hope of a fed rate cut. There was a time when investors took a holistic view of the financial markets and economic data to make investment decisions but now it all hinges on cheap/free money from the Federal Reserve.
“Will the Fed give us free money or will we have to pay a nickel for it this month” is basically what investing in todays market has boiled down to and I am jaw-dropped amazed.
I’m taking this opportunity to short the market even more and will likely pickup another 700 shares of DXD or SDS. Let’s face it, there is a big smelly dead whale sitting outside Wall Street and people refuse to see it, smell it, touch it or understand it and this will bring mayhem.
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October 1st, 2007 at 4:15 pm
Every news article I read is funny – if there is bad news it goes into a spiel about “this has market participants happy because it points to the Fed cutting rates further” – if there is good news it goes into a spiel about “this has market participants happy because it points out the economy is not so bad as bears think it is”
So basically all news is good news. The trend is your friend and right now trend is stomping on any bearish folk despite what the economist in all of us think. In fact today the rally for the first time spread from what I understand (large cap international stocks that benefit from global growth) to small cap domestic (which are the ones facing the slowing US consumer) – so I least understood the previous rally but now when small cap stocks relying on the US consumer bounce, boy its weird.
So for this Friday here is the game plan
If the jobs number is weaker than expected that is GREAT because it means more fed cuts
If the jobs number is stronger than expected that is GREAT because it means the economy is holding up
So whatever the number is Friday, just remember, its GREAT!
thats the type of thinking we have and the herd mentality.