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Two Ways To Play: Markets Caught Short


Strengthen your portfolio in good times and bad.


Holy Short Squeeze!

In concert with yesterday's actions by the U.K. Financial Services Authority, the Securities and Exchange Commission today took action to ban short selling on 799 financial services companies. SEC Chairman Christopher Cox said the move was done to combat manipulation and restore equilibrium to the markets.

The emergency order will be effective immediately and will expire at 11:59 p.m. EST on October 2nd, 2008. The SEC may opt to extend the deadline, but such an extension wouldn't last for more than 30 days.

From the Bull Pen
: What a short squeeze in the financials, but it might not be wise to chase these stocks after such a large gap up. Bulls can eye the Russell 2000 ETF (IWM) which has made recent higher lows. Sell stops can be set near $70.

Minyanville's Why Wall Street Will Never Be the SameFrom the Bear Cave: The situation doesn't change the outlook for the consumer. We could see shares of Tiffany (TIF) rally to as much as $45 and bears can consider downside plays if it reaches near that level.

Oracle Jumps After Hours

Shares of Oracle (ORCL) are higher this morning. According to Bloomberg, the world's largest software maker reported first-quarter earnings above analysts' estimates and gave a reassuring second-quarter forecast that made clear the global economic downturn won't kill its profits.

Earnings came in at $0.29 per share, which is $0.2 better than estimates. Revenies rose 18% year-over-year to $5.42 billion - inline with consensus. For the second quarter, the company sees earnings of $0.35 to $0.36 per share and revenues in the range of $6 to $6.17 billion. Shares are up 14% in the premarket.

From the Bull Pen: For those bullish Oracle, sell stops can be set below $20.

From the Bear Cave: Bears looking for a downside tech play can consider AT&T (T) if the stock can rally to $32. Buy stops can be set above that level.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng +9.61%, Nikkei +3.76%, Sensex +5.46%, Taiwan +5.82% and Shanghai +9.46%.

A quick look across the pond finds the CAC +6.60%, DAX +4.47%, FTSE +7.37%

As of 8:30 a.m. EST, S&P Futures are trading +49 points to 1253 and Nasdaq futures are off +66 points to 1775.

A Look At Commodities

Commodities are mixed. Crude oil +1.76 to 99.64. Gold -53.70 to 839.50, silver +1.028 to 12.648, copper -1.75 to 307.80.

The dollar index is higher +0.780 to 78.799.

No events on the radar today.

Bulls and bears can agree that it's been a wild week. Good luck and have a great weekend!

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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