What to expect the next 2 weeks
It is highly likely that last week was about locking in profits.
Hedge Funds had to show that they can make money, so they enjoyed a fast run up in the market and cashed out.
I see competing trends - recessionary signs versus loose lending. Throw in April 15th tax time and this is very confusing.
Lots of competing forces here. People need cash to pay the tax bills, so stock is getting sold. At the same time, the funds have new money to invest thanks to the Fed.
This makes for a very skittish market ready to collapse if there are signs of weakness. And there will be plenty of those as corporate guidance indicates recession in the US and possibly creeping into the EU.
Upside surprises will likely be the agriculture (soybean, potash, etc) and commodity stocks (oil, coal, chemicals, etc). And global consumer companies that enjoy exchange rate advantages.
But overall, we are highly positioned for a steep drop an dlong term bearish market. I believe there wil lbe a lot of volatility as the market seeks direction and hopes beyond hope that things will improve. That means to me that I will be buying and selling calls/puts sometimes within a day. I will be selling into strength (writing covered calls or buying puts) and buying into weakness. But not to hold for long.
Hedge Funds had to show that they can make money, so they enjoyed a fast run up in the market and cashed out.
I see competing trends - recessionary signs versus loose lending. Throw in April 15th tax time and this is very confusing.
Lots of competing forces here. People need cash to pay the tax bills, so stock is getting sold. At the same time, the funds have new money to invest thanks to the Fed.
This makes for a very skittish market ready to collapse if there are signs of weakness. And there will be plenty of those as corporate guidance indicates recession in the US and possibly creeping into the EU.
Upside surprises will likely be the agriculture (soybean, potash, etc) and commodity stocks (oil, coal, chemicals, etc). And global consumer companies that enjoy exchange rate advantages.
But overall, we are highly positioned for a steep drop an dlong term bearish market. I believe there wil lbe a lot of volatility as the market seeks direction and hopes beyond hope that things will improve. That means to me that I will be buying and selling calls/puts sometimes within a day. I will be selling into strength (writing covered calls or buying puts) and buying into weakness. But not to hold for long.
posted by Andrew at
7:30 PM
1 Comments:
Indian market tanked yesterday on the news that (ICAI) local authority had asked all the
Corporates to disclose their financial derivatives position… this is like asking the Banks in US to disclose their Sub prime exposure well in advance. Well, I like this step to protect the retail investors considering in the last 2 weeks there was a bullish sentiment in the Indian market because FII were the net buyers in the market and everyone was expecting the market to take off this week.
FII were caught in this crosswind not sure how would they get back their investment from the market especially if they had planned to gain profit it in the short term.
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