You write "Born to Kill" on your helmet and you wear a peace button. What's that supposed to be, some kind of sick joke?
The Reflation Trade
The Copper, Silver, HUI and Corn are all pretty much tracking those paths. Our fearless leaders are willing to sacrifice the USD for the sake of confidence and a higher stock market. Most all commodities (even Live Cattle, hehe) are signaling a move higher. Therefore I would only recommend long exposure to commodities (and the ancillary plays including Alternative Energy) until the DXY finds it's bottom. My long exposure consists of Corn, CLF ($30 tgt) and KWK ($14 tgt, was neutral but now a moderate bullish tilt in the spread). I am looking at ENER ($17.75 tgt,) as a potential 'AE' play but waiting to see if it holds 14.50. OIH is tracking 115, but I have no position in it directly. Short exposure is EWZ (now going to be a hedge, how convenient thurgy). Another reason to be exposed to commodities on the long side is in the event of an actual recovery this sector will lead. I would expect any stock market rallies are results of another dollar-smashing "plan" out of Washington. I think I would wait before taking any new positions at this point. I am looking for one more pullback and lunge for the finale. Doesn't mean it will happen though.
Let's see what happens when/if the market gets to 1017-1030 or so and Q's at 41. Watch oil to see if Goldman Prophets call for $85 will come true. Let's watch DXY at the 77.50 area. I don't see much below that until *76.50 and 75.
Trading is easy
...Banner Ads and Subscriptions.."What a jerk!" some might say. These are all rocks being thrown from what used to be my glass house. These were shots at the likes of RealMoney and the thousands of stock-picker-bloggers and stocktwits who's motivation is to generate traffic for banner ads, twitter followers, stock-picking-subscription services, recognition and ego. None of that interests me. For starters, 70% have no business doing it (including myself). Secondly, 70% will no longer be here this time next year. It's a sad but true statistical fact. I imagine over the next year the new trader odds will be even worse from the whipsaws we will see. Don't get me wrong, there are some good ones out there who deserve to do what they do and they know who they are. I would much rather learn from someone's mistakes and/or thought process than look at stock picks. The message I was trying to send is Humble thyself, otherwise Mr. Market will hand you a diploma from Pain State University. Now that I've cleared that up I will stop making those asshole wisecracks.
Digital Dickweed
(This is about the time I doubled-down on those FNM puts)
[Econobrowser May 2008] From page 102 of Fannie's 2007 Annual Report, as of the end of 2007, the enterprise had leveraged $44 B in stockholders' equity with $796 B in short- and long-term debt to acquire $761 B in mortgages either held outright or intended for resale or trading. I read that as an equity cushion against a 5.8% loss on the mortgages held directly (44/761 = 0.058). But in addition (page 1), Fannie has guaranteed $2.1 trillion in separate mortgage-backed securities it has sold to outside investors, for a ratio of core capital to total book of business of 1.6%.
[Update1] Been meaning to say this, but a "logical target" for a pump monkey would be the "Dow 10,000". That way the floor traders can pull out that hat again.
[Update2] Corny is about to limit up.
