Futures are down slightly. 1490 is tough resistance right now on the 500. With last week being one of the best weeks of the year, I would think a little pull back is in order. However if we close well above 1490 tomorrow or Tuesday, I think we close the year out at or above new highs on the 500 and DOW.
One would think buying a straddle might be a good play here, but the premiums are so damn high because of the recent 300 point days that it's just not worth it.
If we open flat or slightly up or down tomorrow, I might short the s&p 500 with a tight stop buy if it closes over 1500. Small risk for good rewards if the market tanks back to the November lows.
That is my game plan right now.
One would think buying a straddle might be a good play here, but the premiums are so damn high because of the recent 300 point days that it's just not worth it.
If we open flat or slightly up or down tomorrow, I might short the s&p 500 with a tight stop buy if it closes over 1500. Small risk for good rewards if the market tanks back to the November lows.
That is my game plan right now.
There is hope for humanity with you possibly shorting stocks.
With the amount of collaborated intervention, I personally dont believe the market will tank prior to Christmas, but the market is the boss and my opinions mean little as I let the tape dictate my actual trades.
If it tanks, so be it and all I hope is to be on board for at least part of the ride....same thing regarding if it goes to new highs.
My game plan is if market looks bullish in morning im buying financials and if it looks weak im shorting something tech related.
Ill be around to post if I trade anything.
GL
Truth be told I really wish the market would just stay flat for a while. I'm tired of these 1,000 point swings ever 2 weeks. November was just brutal on my nerves. The market dropped 10% from its high and my portfolio dropped 25% which says I'm wayyyyyyyyyyyyy to leveraged. There is nothing wrong with being long but I can't let a 30% correction wipe me out. I did add a great solar stock last month (STP) and now I'm looking at a natural gas play to help mitigate the risk in my folio.
I will be around in the morning too.
I will be around in the morning too.
you wanna talk nerve wracking it's NG right now
I'm in it pretty good as I think it's one of the larger value plays in the sector...post who you're looking at, it'd be interesting to see. my largest is PMGYF which is a 100% NG Canroy. down about 5% in 6 months but it pays a 24% dividend. on sale if you ask me
also one day NG will be $20.....that mfer could go down another 25% and cut the dividend in half and I'd still patiently wait
[SIZE=+1]Sub-prime debacle is not the big story[/SIZE]
<SMALL>The Times| 12/3/2007 | Anatole Kaletsky</SMALL>
What has been this year’s most important economic and financial story? Most people seem to agree that it has been the global credit crunch and the US housing crisis. However, in fact, this has been a sideshow compared with the far more important shift in the structure of global growth in favour of America, largely at the expense of Europe, including Britain.
This shift was confirmed by the remarkably strong US GDP figures published last Thursday and is likely to trigger a substantial rebound in the dollar – just when cover stories in business magazines around the world are announcing the American currency’s permanent decline.
While the markets and the media have focused on the risks of a US recession, the third-quarter GDP figures actually showed an acceleration of growth to 4.9 per cent - the strongest quarterly growth rate since the first year of the present expansion in 2003.
However, the good news that America has kept growing rapidly despite the collapse of housing is tempered by some very bad news: the biggest casualties of the falling dollar and the crisis in the US property market will not be American homeowners and consumers, but businesses and workers in the rest of the world.
This is because the driving force of the US economy’s acceleration this year has an upsurge in net exports – and this trend is likely to become even more pronounced in the near future, for reasons directly related to the property slump.
A strong link has been observed over the years in most advanced economies between housing cycles and the balance of payments. When property prices boom, a country’s imports tend to rise and its exports to slow down, as market forces shift labour and resources from manufacturing to housebuilding and consumption. Once house prices start to decline, the opposite effect occurs and the trade balance shifts in favour of exports. This relationship was clearly demonstrated by the detailed study of 44 housing cycles in 18 countries published two years ago by the Federal Reserve Board, which I mentioned on this page two weeks ago.
The experience of all these cycles suggests that, as house prices decline, the US will probably reverse most of the deterioration in its current account deficit over the past four years. This deficit increased by 3.5 per cent of GDP, equivalent to $400 billion, between 2002 and 2005. Thus a narrowing of the same amount – say $200 billion in each of the next two years – should now be expected.
A year ago, such a prediction might have seemed just a theoretical speculation, but in the past few months, the narrowing of the US trade deficit – and the boom in America’s export sector – have become observable facts. Since the summer of 2006, America’s deficit has shrunk by 1.5 per cent of GDP and the latest trade figures have shown US exports growing by 15 per cent in real terms, while imports grow by only 5 per cent. In the next two years, with the dollar now at record lows, this shift in the US trade pattern is likely to move even faster, adding 1.5 to 2 per cent to America’s growth.
The good news is that this export boost should be enough to offset the damage done by the housing slump to the American economy and its jobs market. The bad news is that the $400 billion worth of extra economic activity gained by US businesses and workers will be exactly matched by losses in Europe, Asia and the rest of the world. If this happens – and it is happening already – the biggest impact of the US housing slump may not be on America, but on its trading partners. And perhaps the most important questions about next year’s economic outlook is which countries and regions will suffer most from the “improvement” in US trade. Most people’s instinctive answer is that the countries most threatened by this reducing in the US deficit must be the ones that have the biggest surpluses against the US – China, Japan and the oil-producing countries.
If the US trade deficit shrinks by $200 billion or so in each of the next two years, simple arithmetic seems to suggest that the trade surpluses of other regions will have to fall by the same amount.
Because Japan, China and Opec are the only US trading partners with surpluses that big, it seems natural to assume that they will be the ones that suffer from the loss of US trade. However, this simple arithmetic is misleading: the US trade deficit could easily shrink by $200 billion or more, even if the Chinese and Japanese surpluses stayed as big as they are today or kept expanding. This could happen if Europe moved from its present position of rough trade balance, to an American-style deficit of several hundred billion dollars. In that case, Europe would prove more vulnerable than Japan, China or the Middle East to a US slowdown, just as it did in 2000-02 and in 1991-93.
How likely is this to happen in the next year or two? Most European policymakers and businessmen seem to think that it is impossible. Europe, they say, has never had huge American-style deficits in the past, so why should they suddenly emerge now? Sadly for European exporters, the answer is quite simple: currency movements. Although today’s media headlines and market chatter are dominated by stories about the “collapsing” of the dollar, the real currency story of the past few years has not been the devaluation of the dollar, but the revaluation of the euro and the pound. The fact is that the dollar has scarcely been devalued at all against the important Asian currencies – it is worth exactly the same against the yen as it was three years ago. [Or the Chinese yuan]
Meanwhile, the euro and the pound are now 20 per cent more expensive, not only against the dollar, but also against the yuan and the yen.
To make matters worse for European exporters, the character of America’s trade adjustment is now undergoing a change. Whereas last year’s narrowing of the US trade deficit was caused mainly by a slowdown in US consumption, the global trading system is now moving into a phase in which the devaluation of the dollar becomes the main driving force. This is because a currency movement typically takes two years or more to affect exports, and so the full effects of the weak dollar on global trade patterns will only be felt in the two years ahead. As a result, the marginal producers of goods for the American market are much more likely to be European than Chinese, South Korean or Japanese. Moreover, the biggest trade effects of the dollar’s decline against the euro are likely to be seen not in the American or European markets, but in third countries where European manufacturers compete against American, Japanese and other Asian rivals on roughly even terms. These are the markets in which European exporters will be squeezed out most readily by price competition from their Asian and American rivals.
In sum, it may seem natural to think of companies such as Toyota, Sony or Samsung as being most vulnerable to the present US mortgage crisis, but the real casualties of a US slowdown will probably be the likes of Volkswagen, Philips and Nokia.
<SMALL>The Times| 12/3/2007 | Anatole Kaletsky</SMALL>
What has been this year’s most important economic and financial story? Most people seem to agree that it has been the global credit crunch and the US housing crisis. However, in fact, this has been a sideshow compared with the far more important shift in the structure of global growth in favour of America, largely at the expense of Europe, including Britain.
This shift was confirmed by the remarkably strong US GDP figures published last Thursday and is likely to trigger a substantial rebound in the dollar – just when cover stories in business magazines around the world are announcing the American currency’s permanent decline.
While the markets and the media have focused on the risks of a US recession, the third-quarter GDP figures actually showed an acceleration of growth to 4.9 per cent - the strongest quarterly growth rate since the first year of the present expansion in 2003.
However, the good news that America has kept growing rapidly despite the collapse of housing is tempered by some very bad news: the biggest casualties of the falling dollar and the crisis in the US property market will not be American homeowners and consumers, but businesses and workers in the rest of the world.
This is because the driving force of the US economy’s acceleration this year has an upsurge in net exports – and this trend is likely to become even more pronounced in the near future, for reasons directly related to the property slump.
A strong link has been observed over the years in most advanced economies between housing cycles and the balance of payments. When property prices boom, a country’s imports tend to rise and its exports to slow down, as market forces shift labour and resources from manufacturing to housebuilding and consumption. Once house prices start to decline, the opposite effect occurs and the trade balance shifts in favour of exports. This relationship was clearly demonstrated by the detailed study of 44 housing cycles in 18 countries published two years ago by the Federal Reserve Board, which I mentioned on this page two weeks ago.
The experience of all these cycles suggests that, as house prices decline, the US will probably reverse most of the deterioration in its current account deficit over the past four years. This deficit increased by 3.5 per cent of GDP, equivalent to $400 billion, between 2002 and 2005. Thus a narrowing of the same amount – say $200 billion in each of the next two years – should now be expected.
A year ago, such a prediction might have seemed just a theoretical speculation, but in the past few months, the narrowing of the US trade deficit – and the boom in America’s export sector – have become observable facts. Since the summer of 2006, America’s deficit has shrunk by 1.5 per cent of GDP and the latest trade figures have shown US exports growing by 15 per cent in real terms, while imports grow by only 5 per cent. In the next two years, with the dollar now at record lows, this shift in the US trade pattern is likely to move even faster, adding 1.5 to 2 per cent to America’s growth.
The good news is that this export boost should be enough to offset the damage done by the housing slump to the American economy and its jobs market. The bad news is that the $400 billion worth of extra economic activity gained by US businesses and workers will be exactly matched by losses in Europe, Asia and the rest of the world. If this happens – and it is happening already – the biggest impact of the US housing slump may not be on America, but on its trading partners. And perhaps the most important questions about next year’s economic outlook is which countries and regions will suffer most from the “improvement” in US trade. Most people’s instinctive answer is that the countries most threatened by this reducing in the US deficit must be the ones that have the biggest surpluses against the US – China, Japan and the oil-producing countries.
If the US trade deficit shrinks by $200 billion or so in each of the next two years, simple arithmetic seems to suggest that the trade surpluses of other regions will have to fall by the same amount.
Because Japan, China and Opec are the only US trading partners with surpluses that big, it seems natural to assume that they will be the ones that suffer from the loss of US trade. However, this simple arithmetic is misleading: the US trade deficit could easily shrink by $200 billion or more, even if the Chinese and Japanese surpluses stayed as big as they are today or kept expanding. This could happen if Europe moved from its present position of rough trade balance, to an American-style deficit of several hundred billion dollars. In that case, Europe would prove more vulnerable than Japan, China or the Middle East to a US slowdown, just as it did in 2000-02 and in 1991-93.
How likely is this to happen in the next year or two? Most European policymakers and businessmen seem to think that it is impossible. Europe, they say, has never had huge American-style deficits in the past, so why should they suddenly emerge now? Sadly for European exporters, the answer is quite simple: currency movements. Although today’s media headlines and market chatter are dominated by stories about the “collapsing” of the dollar, the real currency story of the past few years has not been the devaluation of the dollar, but the revaluation of the euro and the pound. The fact is that the dollar has scarcely been devalued at all against the important Asian currencies – it is worth exactly the same against the yen as it was three years ago. [Or the Chinese yuan]
Meanwhile, the euro and the pound are now 20 per cent more expensive, not only against the dollar, but also against the yuan and the yen.
To make matters worse for European exporters, the character of America’s trade adjustment is now undergoing a change. Whereas last year’s narrowing of the US trade deficit was caused mainly by a slowdown in US consumption, the global trading system is now moving into a phase in which the devaluation of the dollar becomes the main driving force. This is because a currency movement typically takes two years or more to affect exports, and so the full effects of the weak dollar on global trade patterns will only be felt in the two years ahead. As a result, the marginal producers of goods for the American market are much more likely to be European than Chinese, South Korean or Japanese. Moreover, the biggest trade effects of the dollar’s decline against the euro are likely to be seen not in the American or European markets, but in third countries where European manufacturers compete against American, Japanese and other Asian rivals on roughly even terms. These are the markets in which European exporters will be squeezed out most readily by price competition from their Asian and American rivals.
In sum, it may seem natural to think of companies such as Toyota, Sony or Samsung as being most vulnerable to the present US mortgage crisis, but the real casualties of a US slowdown will probably be the likes of Volkswagen, Philips and Nokia.
Tiznow, are you ok man?
Im surprised this weekend this thread nearly went off first page.
Any guesses for market direction tomorrow?
Myself, I have no idea.
hno:
waiting for some "good" bad news to pick up his spirits.
come on Tiz, I'm sure you can find something about a company in Idaho that just laid off eleven employees. Hang in there buddy.
