how to lose $6 Billion in 1 week

just ask Amaranth Advisors.

Happy Friday - unless you work for the aforementioned firm.

DJIA 11,508.10

NASDAQ 2,218.93

SP500 1,314.78

the shorts are on

Another week has passed; the markets have continued their moves to the upside. Equities at least. The Dow 30 and S&P are right at their near-term double tops from several months back. The nasdaq actually finished the week above its 200 dma, so congrats to the Naz. The sell-off in certain commodities, particularly crude oil, now has the pundits talking about gas being at a $1.15 a gallon by years’ end. Turns out according to the ‘experts’ the price of oil was artificially bid up by speculators including hedge funds over the last 9 months. The greater fool theory was in full effect and someone got stuck holding a bunch of really expensive crude right at the top. Just for an example of the overall state of energies, put up a 2-year chart of XLE (energy sector spyder) in log format and then draw a trendline and connect all the low points. In the last week, it has broken a two year uptrend. On a 3 year chart it looks even better, it’s rolling over and looks to be trending down now (or it could be trending sideways so put on one’s trades accordingly). Next stop 50? 45? 35??? If the speculators were the ones who drove up the price, then it begs the question: so there were no supply or demand issues whatsoever? If that theory is correct they (the hedge funds and speculators) are probably profiting just as much on the downside as the shorts are now on and the crude is flowing…downhill. The big boys put on a short, made the stop the all-time high and now sit back and dare the longs to try and make them suffer. It’s a cruel world out there. By the way, if one is keeping score at home, DO looks great under 70 and HAL looks really weak too.

Happy weekend.

DJIA 11,560.77

NASDAQ 2,235.59

SP500 1,319.87

which way will they go?

the nasdaq is back at the 200 dma again, trying to punch through to the upside. It has not been at its 200 dma since mid May. The dow 30 appears to be coming up to a near-term double top, (the previous top being early May) after rebounding from a double bottom (made in mid June and July). S&P 500 is in nearly the same boat as the Dow 30, almost up to the double top from early May. At this point, it could go two ways for Q4. Either those indices will hit their respective resistance levels and retreat lower over the next several months, or they break through resistance and move to higher ground. Ground not seen since the first half of 2001 in the case of the S&P and the Dow. The Nasdaq…well let’s just see if it can stay above its 200 dma. One would be prepared by having a list of possible longs and a similar list of shorts depending on market direction.

5 years later

in a recent newsletter from Man Financial, they had the following observation of global/macro events: “However, it now appears that the economy has slowed and that the pattern of interest rate hikes might be coming to an end. Furthermore, the world has also seen a massive decline in energy prices ($12.60 to the recent low in crude oil and 57.6 cents in unleaded gasoline) that should have a stimulating impact on the economy, or at least the decline in prices should take away some of the resistance to future growth.” Interesting premise, if the prices don’t stimulate they will at least lower the resistance to growth.

Finally, a moment of silence to all who lost their lives 5 years ago today and a special nod to the men and women in the securities industry who were in the worst place at the worst time.

what else is there?

Happy weekend.

DJIA 11,392.11

NASDAQ 2,165.79

SP500 1,298.92

labor day

the end of summer, now that everyone is 'back' tomorrow, maybe the market will pick a direction and go with it as positions are built or eliminated and stocks start their trends heading into Q4.

Happy Monday.

DJIA 11,464.15

NASDAQ 2,193.16

SP500 1,311.01