Thursday, June 21, 2007
Bears bite back!
The markets saw some major declines yesterday. The Dow fell 146.00 points to 13,489.42. The SPX lost 20.86 points to end on 1,512.84. Our attempt to get our call side play on was scuppered by these declines. Usually we have been seeing that the bulls are buying the dips so we'll see what happens today. If there is a rise then we'll look to see what plays are about.
Reasons for the decline. Three things:
1. Simple profit taking.
2. Rising bond yields again on the 10 year notes(closed at 5.125%).
3. It was reported in the Wall St Journal about one of my favourite stocks to trade, Bear Stearns (BSC), that two large hedge funds run by it dealing with sub prime lending were about to collapse. The collapse of the hedge fund hurt BSC as its shares fell 2.4% yesterday. The other issue is that it could also filter down to home buyers as this particular fund dealt with riskier mortgages (sub prime) and its demise could further limit the amount of cash available for those needing sub-prime loans.
Until next time.
Reasons for the decline. Three things:
1. Simple profit taking.
2. Rising bond yields again on the 10 year notes(closed at 5.125%).
3. It was reported in the Wall St Journal about one of my favourite stocks to trade, Bear Stearns (BSC), that two large hedge funds run by it dealing with sub prime lending were about to collapse. The collapse of the hedge fund hurt BSC as its shares fell 2.4% yesterday. The other issue is that it could also filter down to home buyers as this particular fund dealt with riskier mortgages (sub prime) and its demise could further limit the amount of cash available for those needing sub-prime loans.
Until next time.
# posted by Paul @ 4:10 AM 
