Friday’s Trading?

I’m not bothering to do any analysis today because who knows what kind of market we will have tomorrow. Will the inverse ETF’s even be trading? How will put options behave if market makers can’t hedge their risk by shorting? Etcetera.

I am happy to report that I was all-in and leveraged short before the Crash of ’08, and I got out at an ideal time: Tuesday morning’s gap down. I had excellent profits, and got out before they changed the rules. Now let’s see if my profits evaporate out of the computers of the financial system.

Nice going Washington! Nice going New York! You crashed the whole thing!

Well, it could be worse. You could wake up with 10 Russian warships on your doorstep just like the Israelis.

I have noticed a lot talking heads in the media, including President Bush and Steve Leisman, using the phrases “free world” and “free capitalist world” recently. Have the geniuses in Washington who just wrecked our economy begun a subliminal program to brainwash us for a coming war with Russia?

Starting wars is a traditional method for the USA to end economic recessions and depressions after all.

I must say that this enthusiasm to fight nuclear-armed countries like Pakistan and Russia is a bit alarming.

So, lets hope that our fearless leaders have sated their appetites for destruction by destroying the economy.

Do you think Dick Fuld is deriving sick pleasure from taking the whole system down with him? There were actually fools in Korea who wanted to buy his sinking ship!

213 thoughts on “Friday’s Trading?

  1. Dressgaurd, I think the VIX is now “broken”…at the least it will behave differently than before now that shorting is banned on so many stocks. We just saw implied volatility shoot up now that people can’t short. We also saw stocks shoot up – way up. Perhaps we just shifted our panic numbers higher (e.g. VIX at 50-60 is now panic territory). I suspect it is far more complex than that…I think by the time we figure out the new behaviors of our favorite indicators, this ban will be over.

    Just imagine if you had purchased September SPY calls yesterday or this morning, you could have made a fortune.

    The bottom line is this ban changes nothing. If anything, liquidity in the market is now lower. Banks are still insolvent. Housing prices are still falling.

  2. what will happen when short selling comes back oct 3rd?
    they will be anxious and really take the bottom off the market.? or am I wrong hehe maybe wishful thinking

  3. Regulators shut down a 102-year-old West Virginia bank on Friday and sold all deposits to Pioneer Community Bank Inc. of Iaeger, W.V. and The Citizens Savings Bank of Martins Ferry, Ohio.

    The closure of Northfork, W.V.-based Ameribank Inc. was the 12th U.S. bank failure this year, making it the latest victim of the nation’s worst banking crisis in at least …

    i will really change my name to Spammer K hehe

  4. As far as I know on an option expiration day the VIX should go down in most cases. Options are settled so implied volatility should go down. VIX is of course distorted by the new shorting rules. But actually it should have gone even more down. Maybe I’m wrong here. I think Matt has better insight into that than me. But I’m very sceptical and the whole stock market – not only the VIX – is distorted and if you want “broken”. There won’t be a buying frenzy. Maybe the markets go up. But this would be another opportunity to go short. Btw, Germany followed the the U.S. and U.K. with a shorting ban, too. Concerted action across the world. I’m getting scared shitless now. Maybe it’s time to go in gold again, though I told myself never to do that again. DOW higher than 11000 is a joke in that kind of market environment. That biyatch should be between 8000 and 9000 points. As I told before – February feeling is back again. It’s really strange. Although I made some money this week I am feeling depressed. How would I feel if I had been in SKF, seeing it going up to $150, hoping it would go to $200 and seeing that thing dropping below $100? I think the bears had enough this week and the bulls don’t feel like partying either. I am very worried of the next little crisis in the stock markets. What will the government and the FED do then? The next crisis will be the panicking big drop and we will see the DOW and other indexed where they belong. At least a 20% drop from here.

  5. Dguard – actually think there’s some good sense in your assessment. Not sure it’s Armageddon but were, almost literally, dancing on the edge of the precipice. Go chart IRX YtD, especially on a log scale. Tu the markets went deeper into cardiac arrest worldwide than just before the BSC rescue. Whatever the ideological merits or objections one might have to RTCII the equity markets were about to nose-dive, as we know, big time again and the world credit markets weren’t responding to the de-fillibrator. I’m happy to debate the philosophical pros and cons but much happier to be around to do so. Thu up until 2:59 it wasn’t clear that opportunity was on the table. Fri we could, and can continue, to criticize the dancing bear for being a bad dancer.

  6. Dressguard,

    From what David Merkel says, it looks like the VIX should be distorted by the short-selling ban:

    “Put option implied volatility goes way up. (A lot depends on whether specialists/market-makers can still short…) Because of put-call parity, call implied volatility goes up as well.”

    Matt

  7. $700 billion huh? gosh maybe i finish school make some money and invest from another country. taxes will be bad. $700 nillion + a great depression yet to come. why can’t we just let the 2nd happen ASAP and not waster trillions like we have?

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