Mar 17, 2008 - Issue #102
De-leveraging must be a euphemism for, "Oh my God!"
How many other 'Bear Stearns' are waiting out there?
Perhaps CNBC can tell us how some really smart traders' knew enough to buy tons of
Bear Stearns Mar 30 Puts on thursday for prices ranging from .25 to .50 when the stock
was trading 58.60 - 50.48, closing at 57.00 only to open friday on a gap down and
crashing below 30 which sent the Puts to as high as 9 and a volatility of over 700%!!!
That's an overnight profit as high as 3500%!!! You don't suppose someone knew something,
It's a wonder the averages closed up for the week.
On tuesday, will the Fed cut the Fed funds rate again? If they do, how much further will
the US dollar fall? How much higher will oil and gold rise?
As long as our government is doing nothing to strengthen the US$, certain ETF's can take
advantage of the dollar weaknesss: USO for oil, GLD for gold, and FXY for the Japanese
Yen. These have the advantage that it is not necessary to open a commodities account to
buy these. They can even be carried in IRA accounts.
Dow score card for the week ending 3/14/08.
DJ-30: 11951.09 +57.40 +0.48%. The Real World (arithmetical) DJ-30: 48.95 +0.25 +0.51%.
UP: 16, Down: 14.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 4 (+4) 13%:
-*CAT, +*IBM, +*INTC, +*MSFT.
Consolidating (Generally Lower Highs/Higher Lows) 14 (-1) 47%:
AA, CVX, DD, +*DIS, +*GE, HPQ, JNJ, +*MCD, +*MMM, PG, T, +*UTX, VZ, XOM.
Declining (Generally Lower Highs/Lower Lows) 12 (-3) 40%:
AIG, AXP, BA, BAC, C, GM, HD, JPM, -*KO, MRK, PFE, -*WMT.
+/- denotes change of direction.
* denotes change of category.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!