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VIDEOBuzz on the Street: Will Historic Crash Pave the Way for Black Monday?
Some of this week's most insightful and timely vibes.
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All day and every day, some of the stock market's best and brightest traders and money managers share their ideas, insights and analysis in real-time on Minyanville's Buzz & Banter. Check out some of the best of the buzz and for those Minyans not currently subscribed, click here for a free two-week trial.
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Monday, May 3, 2010
Crisis Averted
Jeffrey Cooper
With this morning’s announcement that a Greek bailout package was looming, the dollar is booming.
Go figure.
This story and the rain in Spain isn’t going away anytime soon apparently.
If the dollar is a tell, caution is advised against celebration and stock chasing as usual.
Beware German horses?
Tuesday, May 4, 2010
The Crash Index!
Todd Harrison
In mid-January, "Crash" the cat was adopted and the S&P dropped 5% in three short days. This morning, "Crash" went to the vet for his 'snip & clip' and the market is responding in kind.
Coincidence? I think not; S&P 1175-1180 is a zone worth watching; S&P 1150 is the level, at least for starters.
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R.P.
Position in S&P
Possible Topping Action?
James Kostohryz
One of the earliest teachings I can remember from my early days of studying the investment craft was a “rule” that said that volatility will tend to fall dramatically in a bull market rise but that it will tend to increase violently and unexpectedly when topping. Presumably the dramatic rise in volatility occurs even while the stock or indices are at or near recent highs.
That situation seems to fit the current market to the T. Is the principle valid? It has worked for me before, notably on the eve of the tech crash a decade ago.
I would also note that there has been quite a bit of capitulation amongst previously bearish analysts. Most notable of these examples was the most recent quarterly letter from Jeremy Grantham who has decided to hedge his bets by remaining firmly bearish on the fundamentals but suggesting that the market could race to new highs above 1,500 on the S&P 500.
This particular “capitulation” caught my attention.
I am 100% cash.
I also warn that I am quite far removed from the markets and am not in a position to “fine tune.”
Wednesday, May 5, 2010
Will the ECB be forced to begin a monetization program?
Lance Lewis
In my view, it doesn’t take a rocket scientist to see where the current sovereign debt crisis in Europe is headed at this point. If a $140 bln bailout package for Greece didn’t temporarily calm the markets, then nothing will. That leaves only one option (i.e. – the ECB is going to have to run the printing presses and maybe they’ll even get a helping hand from Bambi down at the Fed too). Sadly, because of the high debt levels of the PIIGS (which the market has amazingly chosen to focus on before the sovereign debt issues of the U.S.), it’s now “default or debase” for the EU just like it is for the U.S.
In short, very soon the ECB will be forced to begin a monetization program much like the Fed’s MBS, Agency debt , and Treasury monetization program back in 2009, where the ECB will commit to monetizing EU member nation debt on a weekly basis, and maybe even “launder” PIIGS debt like it is already doing with Greece’s debt by allowing it to be used a collateral by banks seeking funds from the ECB.
When the announcement comes (probably sometime within the next 10 days), watch for gold to explode in all currencies, as it becomes even more obvious that all of these fiat pieces of paper aren’t worth the cotton fiber that they are printed on. Oddly enough, the euro will probably rally against US confetti too on the news given the pounding it’s taken already ahead of it.
Position in Gold and Gold Stocks
SRS Trade Idea
Scott Redler
With recent market volatility increasing and some selling hitting the tape, traders can look to inverse ETF’s as short term trading vehicles for some trading opportunity.
I have highlighted a setup that has already developed in the Ultrashort Real Estate ETF (SRS) for a long trade.
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