Short term trades in the stock market •$$$$$•

[Tripsick]

NEW YORK (CNNMoney) -- The week ahead on Wall Street could be a choppy one, as investors remain worried about the debt crisis in Europe.
Trading volume is expected to be low, with many market players taking time off ahead of the holidays. That could make for a volatile week, since low trading volume tends to exaggerate swings in the market.
"Low volume can skew the market either way, and it can be quite dramatic," said Quincy Krosby, market strategist with Prudential Financial. As a result, she added, "analysts normally don't put much conviction in the moves."
That said, investors will still be keeping a close eye on what's going on in Europe.

 

[SpasticGramps]

BAC broke under it's $5 handle and helped drag the whole market down with it today. Looks like there isn't going to be a Santa Clause rally this year. Wonder how Uncle Warren is enjoying his new insolvent zombie bank $4 bagger stock?

 

[tr1ck_]

Check out this youtube video:

[YOUTUBEIF]Li0no7O9zmE[/YOUTUBEIF]

 

[SpasticGramps]

Markets have quieted down for a while after the emergency LTRO allocation from the ECB to the failing banks. The ~$400b in liquidity/bailout has bought them some time.

The ECB is monetizing Italian and Spanish bonds today ahead of their bond auctions tomorrow. Italian rates are above the SHTF 7%. Rumors of Spain needing a IMF bailout abound.

The EUR/USD 1:1 correlation with equities is finished as of the end of this year. EUR is down to ~1.27, but equities have gone up. Very very interesting.

China stock market continues to slowly tank, Europe is headed into their recession while looking at massive amounts of debt to be rolled over first three months of this year at interest rates that make some of the core countries in the EU insolvent. FrAAance's borrowing rates are on the rise as we wait for their debt downgrade.

The big story is how great USA is doing. We have seemed to "decoupled" from the rest of the world. Most people should know by now decoupling does not exist. There is only lag time. Thank 60 years of globalization and $1 quadrillion in circle jerk derivatives holding us all together for that.

 

[SpasticGramps]

Check out this youtube video:

[youtubeif]Li0no7O9zmE[/youtubeif]

LMAO. That about sums it up. It's such a clusterfuck all you can do is laugh.

 

[SpasticGramps]

The EUR/USD decoupling at the end of December is the biggest market news IMO. Whether the correlation continues to deteriorate or compress determines market direction.

Reading Into The Euro-Risk Decoupling

Since the start of December, the tight correlation between EURUSD and risk assets has deteriorated. Most notably from the middle of December, as LTRO pronouncements began, the positive correlation has flipped to negative and EURUSD became considerably less relevant while AUD (and other carry currencies) dominated as correlated drivers. Citi's Steven Englander notes this divergence and sees two reasons for it: the LTRO has contributed by theoretically underpinning eurozone (EZ) bank funding, reducing one source of EZ risk, but leaving in place broader concerns on sovereign debt (risk transfer from private to public balance sheets once again); and the growing confidence in the US that growth will be mediocre but not disastrous. However, even though growth expectations have bounced back to some degree, taking the S&P with it, expectations of future Fed policy have not adjusted upwards at all. Our fear, in agreement with Englander, is that asset markets may be much more sensitive to economic outcomes than is commonly expected and with growth expectations having angled up, the risk rally may be very sensitive to disappointment. The deterioration of European sovereign and corporate credit along with the EUR, combined with US credits underperforming equities in the last few days suggests cracks in the risk divergence are quickly starting to appear.

The reason for the negative sentiment of the EUR is partly due to investors taking notice of the ECB balance sheet.

Long live the Ponzi Bond.

Japanese Zombie Banks Perfected By Europeans

We discussed the start of a new breed of bond issuance in Europe earlier in the week. The Ponzi Bond was born and today Banco Espirito Santo, of Portugal, came to the market (was there really an external demand?) and issued EUR1bn of three-year debt guaranteed by none other than the 16.4% yielding-equivalent three-year Portuguese government. Peter Tchir notes that "If the Japanese created the 'zombie' banks, the Europeans are perfecting them."

From Peter:

I haven't found the bond details yet, but I guess there is no rush when you issue it to yourself and send it straight to the ECB. I can't imagine there was massive actual demand for this. Portugal itself cannot issue bonds to the market. Its 3 year debt yields more than 16%. So why exactly is the ECB so happy to get the bonds with a Portuguese government guarantee?

The bank has a 1.7 billion Euro market cap with a Ba2/BB rating - both with negative outlooks.

If the Japanese created the "zombie" banks the Europeans are perfecting them.

This may not be a reason to be short but it certainly offends one's sensibilities. It also seems to guarantee that the Portuguese sovereign debt situation is worse than we know (lots of contingent liabilities) and all the banks and sovereigns are becoming increasingly tied together.

On the bright side, the ECB has saved itself the effort of creating a "bad bank" and has just become one.

Maybe Unicredit of Italy can issue some Ponzi Bonds for itself backed by the ECB and 7% ten year Italian debt? 30%+ two day drop.

 

[TNTBudSticker]

My doctor predicts the we will go to war with Iran...And another article says that oil may hit $250 if the flow of oil is stopped.

 

[SpasticGramps]

War with a Iran has been a certainty for a while IMO.

They must be giving Nobel Prizes for coached antagonism.

Brent will explode. Consumer pain or not. Sacrifices are made in total wars.

 

[Sam the Caveman]

If we go to war with Iran and the price of gas spikes, there will be some serious opposition like never before. Before rising gas prices were blamed on the "speculators", but this time the only people to blame is the war mongerors and the politicians. They can't wiggle their way out of this blame, it obvious.

Do regular americans want to go to war with iran so badly they are willing to pay $5/g for gasoline?

I know most of them don't really want to go to war to begin with, mainly because it doesn't directly or dramatically effect them. If gas prices start jumping, it will be effecting them in a direct and dramatic way.

 

[SpasticGramps]

That's a good point. Inflation would start cripple the economy. People would start getting very pissed off.

We have military bases completely surrounding Iran now. I reckon the American War machine is at the point where we have one big last war or we pack our bags and start coming home cause we're broke.

Unless they monetize the war, but the dollar is basically dead so......

Interesting times.

 

[Madrus Rose]

you guys finding any good trades lately ? Lots of sell-off bounce plays and of course earnings runs began two weeks ago for GOOG & AAPL etc ....

Real nice performance in the aggie fertilizers leading up into MOS & MON this past week earnings but started two weeks earlier especially with "CF" .

 

[Sam the Caveman]

the new year gap up kinda messed up the technicals, just chasing the news and high volume runners for now.

 

[Madrus Rose]

That CF is one of the best in the fertilizers owns part of TNH too (terra nitrogen) one of the game traders and fundies love it , but already run up , earnings in 2/15 i think .


After the surprised positive sales data on DNDN , BMY just announced a $26 buyout of INHX tonight . This after tanking to $6.66 recently , there will be some happy longs on monday in INHX .

Lot of long sideways charts at their lows resolved to the upside on short covering now into earnings , like PANL NFLX DNDN on various news bytes . PANL does the OLED screens for Samsung thats doing record profs this qtr , beautiful screens on their phones .

DMND is one of the heavily shorted ones that did hold the $27 pivot , huge squeeze potential there but dangerous

GMCR's been building long sideways , still being leaned on am watching WLT as well , beaten down coal play .

XOM CVX COP been on good runs but topping a bit

SHLD just got crushed again but Eddie Lampert's AZO bid back up...

Three times now BAC was a buy off $5 , all these banks reporting starting with JPM next friday , they're bracing for some sketchy reports but they look ahead on these , GS earnings already revised down so far looks like $87 was bottom . BAC reports same day as GOOG & INTC 1/19 ...GS 1/17 & WFC the same week . Heck of a squeeze on JEF a few weeks back .

3rd week brings on all the oil companys

 

[Madrus Rose]

What are the best weekly charts in the market ? The Ciggies & fast foods LO MO PM RAI MCD BWLD YUM SBUX etc ... just starting to pull back

 

[SpasticGramps]

Cabot Oil & Gas: 2-for-1 split, payout up 33%

COG

 

[SpasticGramps]

"I'm all in on Ponzi Bonds!"

 

[bamacan1]

so what do you guys think about GE the only stock i own?

 

[Madrus Rose]

so what do you guys think about GE the only stock i own?

getting overbought so expect a little pullback here , but was overbought once already so alot of people piled into this , kind of a safe haven ....$21 would be tops looks like but expect a little congestion here .

 

[Madrus Rose]

Hey gramps , friggen NetFlix 38% gainer of congestion lows since the new year, was really in break-out mode again today tagging $100 almost ... check out classic textbook pullback for AAPL from the overbought retest of all time high yesterday @ $428 ...the same for CMG @ $350 and the same textbook profitaking hit that . Also MA correcting down finally ...

Google correcting down to support at $620 will be watched close tomrrow , CME been getting taken down ....SINA is retesting a low here that says "bounce" but stock has been heavily leaned on since China crackdown on net.

IDIX & ACHN DNDN real frisky after the INHX buyout , round two tomorrow .

GMCR popped off of consolidation low maybe a shot at $50

PANL was another play off consolidation lows (like NFLX ) that got some momo , AMOLED screen tech , Samsung going big with this at the CES show .

DB might be oversold here , JPM reports this friday .

Maybe nearing top here , but earnings not begun

Lot of stocks pushing the upper limits here even MCD hesitating at $100 and these majors all testing highs the ciggies MO PM RAI LO , the rails UNP CSX CNI NSC ...Oils XOM CVX COP IOC ...MON DE BA FDX CAT NKE AZO MCD YUM not too much room to go higher.

1280 been R here but the boyz getting there Jan rally in .....lot of little ones popping , lot of ones bid back up will get smacked down again.

 

[yesum]

I am long S & P this week, anyone else?