Wednesday, March 07, 2007
Battered
Well it's been a while since I have last posted. To be honest I have just taken a much needed break from the markets, relaxed and reflected on what happened last week and what lessons could be learnt. I will share with you my thoughts later in the week by email.
What was very clear that a lot of traders and hedge funds got decimated last week. Yes we took a big loss as well but I promise you that was nothing compared to some of the losses others have made and are still making. As I said previously we traded through a MASSIVE event and survived relatively unscathed and are still up 10c for the year!!
Only another 9.11 is going to be worse but there are things we can do when we know for certain the markets will go down.
Anyway, where are we now and where are we headed?
Well the markets have been falling all week and yesterday they bounced big style. The Dow made triple digit gains advancing 157.18 points yesterday to close at 12,207.59 (the largest one day rise in 8 months). The SPX added 21.29 points to finish on 1,395.41. Had our play still been on we would be deeply in the red and still in a lot of trouble.
The subprime lending market is still in trouble and nerves are still raw. The carry trade is unwinding at a more frentic pace. Greenspan again said yesterday that the US has a 33% chance of recession in the face of all previous comments by current Fed official that all is well with the US economy (and globally). And the economic reports released yesterday seemed to suggest otherwise as well.
Fourth quarter productivity was revised lower to 1.6 percent growth from the initial reading of 3.0 percent. At the same time, unit labor costs soared to 6.6 percent from the initial figure of 1.1 percent. This was also more than double estimates, though economists are holding off until Friday’s employment report to come to any conclusions. Factory orders in January fell sharply, down 5.6 percent and off 2.9 percent with transportation orders excluded. This supports the view that the manufacturing sector is decelerating, which has been confirmed with weak readings in the ISM Index the past four months.
As to what way forward how would I know? I think very long term we are going down....Over the next 40 days its anybody's guess!!
Until next time.
What was very clear that a lot of traders and hedge funds got decimated last week. Yes we took a big loss as well but I promise you that was nothing compared to some of the losses others have made and are still making. As I said previously we traded through a MASSIVE event and survived relatively unscathed and are still up 10c for the year!!
Only another 9.11 is going to be worse but there are things we can do when we know for certain the markets will go down.
Anyway, where are we now and where are we headed?
Well the markets have been falling all week and yesterday they bounced big style. The Dow made triple digit gains advancing 157.18 points yesterday to close at 12,207.59 (the largest one day rise in 8 months). The SPX added 21.29 points to finish on 1,395.41. Had our play still been on we would be deeply in the red and still in a lot of trouble.
The subprime lending market is still in trouble and nerves are still raw. The carry trade is unwinding at a more frentic pace. Greenspan again said yesterday that the US has a 33% chance of recession in the face of all previous comments by current Fed official that all is well with the US economy (and globally). And the economic reports released yesterday seemed to suggest otherwise as well.
Fourth quarter productivity was revised lower to 1.6 percent growth from the initial reading of 3.0 percent. At the same time, unit labor costs soared to 6.6 percent from the initial figure of 1.1 percent. This was also more than double estimates, though economists are holding off until Friday’s employment report to come to any conclusions. Factory orders in January fell sharply, down 5.6 percent and off 2.9 percent with transportation orders excluded. This supports the view that the manufacturing sector is decelerating, which has been confirmed with weak readings in the ISM Index the past four months.
As to what way forward how would I know? I think very long term we are going down....Over the next 40 days its anybody's guess!!
Until next time.
# posted by Paul @ 4:23 AM 
