Holy Moly Batman! Keep the Treasury Secretary away from microphones

Posted on Feb 10, 2009 by WHC Bassetti.

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The good news:  the exasperating and dilatory Senate passes a stimulus package.  The bad news:  Treasury Seretary Geithner informs market that some banks are going to the guillotine.  That will make investors nervous.  Especially if they are sitting on the front row knitting and checking their portfolios.  Offhand we would say that the market over reacted, but what do we know?  We’ll find out tomorrow what we know.  There are many positives in Geithner’s plan and enormous drawbacks in its non-theatrical roll out.  Frankly if we were running a few billion right now we’d be calling up Tim and trying to get in on the deal.  Government takes the risk (or some of it) and we get the profits.  What’s wrong with that deal?  We predict that a lot of money is going to be made by smart guys scarfing up these toxic assets.  And if Bush’s treasury hadn’t been such mudheads and ideologues we (you know, we the people) would have made a handsome profit on the bank bailout.  Something is going on here (in the market).  We think a rally is trying to get started.  Just as long as Tim keeps his mouth shut for awhile.

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Hope SPRINGS eternal.

Posted on Feb 07, 2009 by WHC Bassetti.

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Friday HOPE sprang (sprung?  springed?) in the Dow.  In the formation we could call a “tight spring” there was a power bar across the tight spring trend line. These kinds of signals are of strictly temporary duration — but that doesn’t mean that there couldn’t be extensive follow through.  At the very least we think it means this downwave is finished and we are in for some upwave. Additionally there have been reversal days and bottom looking patterns forming in a number of issues.  In line with the theory of natural hedging some longs in the portfolio are reasonable.

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Sucker for the lottery.

Posted on Feb 05, 2009 by WHC Bassetti.

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Jim Rogers is supposed to have said I just sit around watching and when somebody leaves money on the table I go over and pick it up.  What we want to know is how does he know that it’s really money and not bait on a trap?  Anyway today they offered us BAC way down and on what looks like a reversal day so we bought a lottery ticket in it.  Same with PFE.  We wouldn’t do this at home without a trained brain surgeon standing by.  But a stop 3% under the lows might keep the lottery ticket from turning into real money for someone else.

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The yawning chasm…. yawn.

Posted on Feb 05, 2009 by WHC Bassetti.

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The long term chart of the Dow shows the market poised (like a porpoise) on the brink of a precipice.  (Attention:  awarders of the Nobel prize for alliteration!)  Well you have a choice you can either cry your heart out over the market, or have a little fun.  The long term chart here shows the black hole lurking beneath the market.  Two things are supporting the market right now–the faint hope that Washington politicians will stop playing ideological games and enact a meaningful jobs bill and bottom fishers who are inspired by prices they never saw before.  (As technical analysts know prices can always go lower–until they get to zero.  (See FNM and FRE and AIG.)  Seeing the faux conservatives posturing over the size of the jobs bill (after they spent a trillion dollars on a faux war in Iraq) is nauseating.  Be that as it may — what does the analysis say about the potential downside in the Dow?  Looks like about 5600-5700 in this analysis.  Want to see some really low prices?

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Gold! Gold! Black gold in California!

Posted on Feb 02, 2009 by WHC Bassetti.

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Speaking of black gold — that black stuff that drives the world crazy — we think the time has come to exit the short side of OIL.  In fact we would buy a little of it.  We remarked some time back that it was a short and readers who took the hint should have made a barrel full.  Whereas it was overbought before it is oversold now.  Don’t blame us if this doesn’t work out.  .300 is a hell of a good batting average with the hard ball.  How do they do that in cricket?  Do they have batting averages?  And if not, why not?

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