In case you are just tuning in, Wall Street done blowed up over the weekend. CNBC talking heads sounded like undertakers on Sunday night. Quite the spectacle.
Watch the comments for updates throughout the day.
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Without looking at any financials I’m short Citi because it is the largest bank on earth. You wont get a better proxy for the global financial mess.
Yerk
who sold his AIG puts today but can’t figure anymore why
AP is reporting as breaking news that the Fed is holding another emergency meeting for AIG this time. Can’t url it so far and nobody else seems to be carrying it yet.
The Wall Street Journal says that there will be no rate cut unless conditions worsen, though the language may be softened.
The WSJ seems to be the official paper that the Fed uses to leak its intentions, so this is an important article.
Just listened to Paulson’s speech that was recorded @ 1:50pm from CNBC. Talk about someone that is high on Koolaid.
BTW.. wait for the confirmation candle of XLF below 19.75. Looks like it is preparing for the worst when Whitney has her interview @ 3pm.
SDS tried another run at the double top on 15 minute.
That puppy is up 4.79 on the day.
CNBC is just so funny to watch. They are saying that today should be treated as a victory given that we didn’t pierce the 1200 level on the SPX.. Yay!!
Meredith had downgraded GS’s earnings, and based on their $150 oil reiteration twice, I can’t see them doing well. GS has their earnings tomorrow, so XLF will continue moving this week. However, you have the low bar theory…
Here’s a surprise that I missed: Whitney had a “Perform” rating on Lehman last Wednesday, based on a $27/share book value: http://tinyurl.com/5egjn4
Meredith could give us our 500 point down day. Everybody will be listening.
David there is the divergence. 2B maybe?
I bought a VERY small amount of SPY calls. VERY small. Risk management!!
Cramer is asking fo ANOTHER bailout, AIG.
At the same time, he has given a financial sell list. Once a hedgie, always a hedgie.
Charlie,
Here hoping for another CNBC-styel “bull victory” tomorrow! Then everybody’s happy!
Cramer is asking for a 50 bps cut.. hey.. why not a full 100 bps
ICE is below 80 (down over 11.00 today) where I thought it should be for the next juicy trade. I’ll watch for a launch on the next market rebound.
If JPM can’t hold $38, it and the financials are finished. Where’s Meredith…?
Tough double top on the SDS 30 minute but looks like it is doing it.
Is the S&P gonna go down and test that 1200 level?
Decisive break of double top on SDS George. See if it holds.
“This situation makes matters worse”
Meredith Whitney Quotes:
“At a miminum it’s traumatic for everyone involved”
“Never in my wildest dreams did I think I would see something like this”
“Lehman collapse makes the credit crunch worse”
“Lehman failure is traumatic across the globe”
“People don’t grasp how much liquidity will come ouf of the market”
“House prices will fall – peak to trough – WELL OVER 40 to 45%”
“I’m curious of the math at Wachovia and Citigroup”
“Short of govt action, doesn’t know HOW we get out of this”
“Surprised at how WELL the stock market is doing today”
Merideth rocks! And she’s no doubt go it right. Lehman’s collapse reduces global liquidity which means asset prices get whacked.
Thar she blows! Man XLF is toast.
Lol.. Wow.. talk about a dose of reality from Whitney.
I’m out. 218% YDT. Will be looking to go long from here
Go Meridith. Adding machines for everyone (at Wachovia)!
She did make a good point about the effect LEH will have on REITs and commercial real estate. I already have a position in SRS, but you all may want to look at it when it backs up to a good entry point, as it broke out of a falling bullish wedge today at about $85.00
The Vix is marching, but still below the high at the open.
Say it with me: D-E-F-L-A-T-I-O-N
D-E-E-F-L-A-T-I-O-N
*BZZZZZZZZZZZZZZ* WRONG
Sorry Crash Can;t Spell.
C-R-A-S-H
U.S. Stocks Slide Most in Six Years as Lehman Spawns Credit-Market Turmoil
Fed Injects $70 Billion of Reserves to Banking System, the Most Since 9/11
WOHOO Glad am home before market close. I think I will hold onto SKF. Apple I got no choice.
You know there’s a big problem when the headline on yahoo finance has the treasury secretary telling us all to “have faith in the system.” Maybe this is worse than even I imagined….
I too am amazed the market held up this well.
Did AIG just cut in line, or does WaMu not have their appointment with the FED until this weekend?
I don’t know…this is disappointing – where’s my 500 pt Dow down day ? That’d be fun.
Meredith’s tellin truth to power (less) and really has some points but have you thought about this going forward ?
Without capital raising the financials are in asset liquidation mode which pushed down liquidity pushes down credit worsens asset value…yadda yadda.
How ’bout an “Asset Recovery Trust” for all the stuff on the banks books ? Now wouldn’t that be a hoot.
SPX touched 1200 briefly. DOW under 11,000 for a split second.
Luvin my ICE and SSO.
That was a huge bounce of 1200 for the SPX. A whole 12 points in 4 mins.. coincided with the 3:30 pm “big boys come out to play” time.
A few minutes ago, I took profits on my S&P 500 futures short position. For those of you who don’t know how it works, you make or lose $50 for each point the S&P moves – per contract. So, not only has it been rather exciting lately, I made a rather huge amount of money today.
I’m holding my SDS, QID, TWM, and QQQQ puts for the eventual cracking of 1200.
share the love Matt
btw when AIG fails will Cramer change his view on the market like he promised? hehe
Matt,
are you still hanging onto your other short positions?
So now it is time for a 2 month bear rally to 1,400?
damn it I want 400 point drop NOWWWWW *crying*
Oops, you already answered that
K, it’s coming, we have the whole week.
The govt is NOT bailing anybody out any longer. They are going to ask everybody else to do it. GS and JPM to bail AIG. What next?
The futures have fought back to the low made at the open yesterday. So this bounce might just be a back-test before a move lower.
LOL,
that pool of money was for GS and JPM to bail themselves out later. If the FED is forcing them to bailout AIG with it, then they are going to be in a heap of trouble when they need it.
These are conditions for a crash. VIX above 30.
i think SKF will be a fine bet for this week even if market rallies.
I wonder how many obituaries will be in the coming weeks and months related to people losing their life savings that they invested in “financial institutions”
muehahahaahah
On a day when Wall Street was melting down, Republican Sen. John McCain insisted Monday that the nation’s economy was “fundamentally sound,” drawing criticism from Democratic leaders and his opponent for the presidency, Sen. Barack Obama.
could someone explain to me what “fundamentally sound” is? WOW just WOW oops i guess i gave out my secret vote.
SPX under 1200.
Massive volume on the Q’s.
Does anyone think we will get a bounce tomorrow?
Dblwyo my wish for 400 was fulfilled rather quickly now i’m trying to help with your 500 wish. it would be NICEE although i’m usre i will be tempted to sell SKF waiting for a bounce tomorrow
charlie I do. just seems unavoidable going down nearly 500 and not getting a bounce.
Just sold my SDS calls again. Will re-enter again tomorrow on a bounce. I think that 1215 will be probably retested sometime in the coming days and I don’t want to risk profits given crazy volatility with options in the coming days.
sold my SKF 132.25
Hey there goes 1200 looks like Richs 1120-1180 is in play this week
Ooooooooooh.
Just missed my down 500 call.
Matt,
Nice call on today’s action. Looks like your OCT 125 PUTS are up 100%
I just took a huge profit on my QQQQ puts. That massive volume, the hammer candle, and a possible Fed cut sent me to the sidelines.
I still have all my double-short ETFs though. They are immortal and I can hold them through the next bear-market rally if necessary.
Right now.. the $VIX is above 30 (fear is in the streets), the $CPC is above 1.4 which means that there are a 1.4 puts for every call out there. $TRIN is also pretty up around 1.08 which means we are no longer in overbought territory. I agree that there isn’t much reason to buy, but then again.. I think we need to sucker in some bulls to call a bottom and buy into this dip in order to get more ammo to take the market down to 1120.
I’ll be waiting with cash in my fists to short.
i think i can get more SKF if need be tomorrow as am sure a gap up might be in the works. any profit is better than no profit
Wow broke 1200 11000 in the close does not bode well for tomorrow
oooooooo so close to -500
Crash.. you didn’t miss by much!
Congrats Matt.
I had a phenomenal day as well, and it sounds like most of you did as well.
Rich, if you see this, re our exchange yesterday, it is just a difference of opinion, and I didn’t mean to offend you, if you were.
newbie,
I’m not the only one making good calls here. We have quite the brain trust going!
I didn’t quite make 100% on the puts, but I did OK!
Matt
I see the DOW down 504.48
They’re still counting and its… its… down 504!!!!!!!!!!!!!!!
Drinks are on me.
I wish we could all go out for 1. or 2. Pooch would dig that.
Good profits on this gang. Congrats Matt.
Treasury yields came down at the end. 0.83% now. We have fear. Now waiting for full panic.
Japan, Hong Kong and China will crash tomorrow morning.
dow down 504!!!!!!!!!!!
Hey Crash.. the the DOW numbers just get revised.. seeing the DOW under by -503 + pts.
damn i’ll take a cut of water instead. unless you want to sneak one out to me and go to jail
Hey guys,
Vindication feels good, huh? All my non-trading buddies thought I was crazy…
As it stands now, all of my financial postions (except for a few JPM 22.5 puts) are long Oct+ puts, and short Sep puts, which are losing all their time value, so I will make money on XLF either way.
I closed my housing (XHB) positions, for a very small gain (I bought some at XHB 18.5). There are easier targets that the PPT has trouble helping: I’m going to build up my retail shorts and the big exporters in the future.
I still have SDS and IWM positions, but I cleared out of SKF. I’m going with with shorter time-frame plays (I’ve held the SKF for over a month) in the future on that and stick with XLF options instead.
We should have an interesting expiration week ahead of us.
What I want to know is how much the ETrade baby lost today.
i know expiration week is wild but what do you expect Paul? mostly downside?
I will maybe stay out of SKF for now
Matt quite dumping into the close my Q’s dropped .08
Crash lets see what happens tomorrow,might take you up on that drink
Matt my Q puts
i’m starting to regret selling SKF without looking at the charts but oh well. maybe i need to take a walk
K,
Sorry about that. It got a good laugh out of me. I feel like one of those Internet creeps.
Pooch,
Thursday I’ll take care of your request downtown at the Square.
It’s ok Crash.
another year and i’ll hunt you down for that drink hehe
By the way Rich, great call on the bottom today. Perfect!!!!
Rich Says:
September 15th, 2008 at 11:00 am
SPX 1236 was resistance. SPX 1170s-80s, here we come!
PIMCO should be pretty nervous now.
Geez K,
I wish I would have known what you know at that age. I would give the following advice, whether you want it or not
Never get too cocky with the markets and never let a loss run away on you.
interesting chart about the possible rate cut
http://themessthatgreenspanmade.blogspot.com/2008/09/rate-cut-tomorrow.html
Crash I will try not to be the next Timothy Sykes in cockiness meter. I will try to help out close friends and family prepare for the rough times we’re heading into tho. I’ve only been into stock trading for 2 years and now i found the greatest bunch of people on the web
Great advice Crash… I think this market can hurt a lot of people in the worst ways possible. It hurt a lot of people out there, but fortunately, most on this board think alike and hence we avoided and even profited from it today.
Think of all the people that worked at LEH & MER that will now be looking for work. The sad fact is that I’m sure a number of these people worked for BSC a few months back.
Wasn’t the crash of 1987 a 504 loss? A perfect omen.
K,
I expect downside to the S&P, but financials could go either way. I don’t know if (a) the FED will cut and (b) how the market will react if they do. While a cut would represent weakness, a 50bps cut would significantly reduce banks’ borrowing costs.
Borrow $100k from FED at 2%, loan at 5%
500/200 -1 = 150% profit
Borrow $100k from FED at 1.5%, loan at 4.5%
450/150 -1 = 200% profit
If 0 is short and 10 is long, then my positions on financials are about a 4. On the rest of the market, about a 2. Financials still are mostly a short-term market that turns faster than I like.
On the other hand, it looks like XLF has NO support before it’s July low, so I may buy some OTM puts with a small amount.
Also, my play on the FED: short the move, either way. If no cut, I’ll buy XLF puts Sep/Oct right after the news release. If 25bps cut, I’ll go long Nov/Dec puts, short Oct puts near the end of the day.
Perhaps da boyz are driving the market down to force the Fed to cut rates.
i think i called a black monday yesterday.
but the 1987 crash does wasn;t as inflated as 11,000 so i guess when we see a 1,000 loss then we shall see
Did ALL the Asian market have a holiday today? They’re gonna shit a brick when they open tomorrow. I think the fact that they weren’t there in the morning helped us out.
I wonder if this will actually make the top story on the news today….
So tomorrow I see two possibilities: FED pulls yet another rabbit out of its hat (hopefully the thing is still alive as it seems like they had quite a few stuffed in that hat) and we end up/down a percent or so or we move into full on panic and see an even worse day than today. Not sure what would be best for the long run…but I must admit, this whole train wreck slowed down so it takes years is starting to wear on me.
i cannot short nor do I want to at this point as I’m still learning going long on short ETF’s.
might short S&P but will have all night and tomorrow morning to do research and read this blog (yes i will get at least 6 hours of sleep i promise.)
Barry has also his input on a rate cut … he makes a lot of sense to me
http://bigpicture.typepad.com/comments/2008/09/a-disasterous-r.html
George,
That’s interesting thinking. To force the FED’s hands, I think the market would have to be down 130 pts by 2pm, otherwise they’ll just see today as normal but not overly stressed, given the news (they still amy cut either way). We’ll also have to see if the VIX rises or falls in the morning.
towelie,
One thing I noticed is that most of the European markets were down 3-5% all day, even when the DOW was down only about 170 pts, so they weren’t buying the intraday rally either.
Whoa i found out my credit score for free. hehe
not an advertisement just some nifty site. no hidden fees although loaded with ads i don;t want to post and give them free advertising though so. cool
creditkarma you know the beginning and end. 
K,
I NEVER go short actually: I don’t want a margin call on a bull bounce. I buy puts and inverse ETFs. It is just simpler to say “go short.” Options are the best way to go, but paper trading for at least 6 months first (real paper trading with commissions and the position size you would normally be using).
Since you are starting out, I don’t recommend options simply because you really need a bankroll to make multiple trades of $1000+: $10k that you can afford to completely lose at a minimum; $20k is even better, and beyond that it helps but not as much.
There’s nothing wrong with inverse ETFs, but I think TWM (Inv Russell2000) and SDS are less risky plays than SKF at this point.
Gentlemen, the earlier target range is within reach here, as it looks like we’re 1-2% from a short-term low before a 5-7% short-covering clearing rally possibility precipitated by a Fed rate cut (yawn).
The highest probability support levels to the number are 1168 to 1179, which are weekly-close support going all the way back to Oct. ’05, believe it or not.
Of course, the selloff into the close might have been enough for Wail St. for a bottom for now; or we might need a spike lower at the open for good measure to wash it out.
Asia will likely be in a full-blown crisis mode overnight.
Stay tuned . . .
P.S. Danny, no offense taken, my e-friend. You’re a good man for saying so. Thanks.
Thanks Paul. i got a 10k account and lost 8% of it YTD. not bad considering i was being a knucklehead and still am for holding tight to it. 6% of the 8 is all apple losses.
thanks for the input. as always i really appreciate it and i hope i don;t become a pain in here as sometimes i really get hyper
Back in – it was time for lunch. Got my 500 pts. Thanks guys.
Need a Matt TRIN analysis soon if we’re playing tomorrow. Mine is up to 1.04 at the close on a 2Da MA on a daily chart. Lewis and Thain were on CNBC and it’s online well worth your time because the discussion of the future of the finance industry they’re talking about a huge re-structuring of the whole industry. Couldn’t have sounded more sensible if Larry Summers, Dick Bove and der Whitney put their heads together.
Here’s a guess – Thain saw all this months ago and cleaned up the balance sheet in July to set it up. He was just to astute about the de-leveraging.
Means lots of action to speculate on.
O lala
Largest declines in the Dow
http://bespokeinvest.typepad.com/bespoke/2008/09/largest-decline.html