Wednesday, July 09, 2008

HOAX #2 FED steps into Freddie's Fannie

Due to enormous success of HOAX's #1 "Strategic Petroleum Reserve HOAX"
with following (USO) retreat of over 6% in 3 days I decided to continue this ridiculous series.

So here goes HOAX #2.
FED decided to guarantee debt of (FRE)/(FNM), boost much needed liquidity ( of course taxpayers did not complain) and restore illusive stability of credit markets.

FED felt sorry indeed that bone thrown to the public to be wasted on LCD TVs and some gas ( how about having someone who rules the country who is in charge for pork? I don't eat pork, so I would not care ) in the form of $160 billions caused by total inability of Mr. El Presidento ($ is not even as good as peso anymore) to pronounce any other phrases, but "Tax rebate, tax rebate.." went totally and orderly wasted for no good reason ( except for generating more cash for oil companies indeed - that is where most of $160 billions ended up anyways, right? )... I better stop before some tight a... as.. officials ah.. I better stop now.

Anyhow, on a serious note ( another one ) - in spite of today's market selloff a lot of ETFs continue to look surprisingly ripe for turnaround, namely (IWM),( IYT) come to mind first, but even (QQQQ) now sits on "volume support" and last 6 days still look like extremely volatile consolidation to me.. (XLF) still looks interesting for the long trade ( HEY - I am trying to pick a bottom here, you don't see me doing that every day, except on the beach during spring break...but you don't see me there, right?)
As a matter of fact, after been stopped out of 1/2 of long (XLF) calls with simbolic profit - I replaced disposed position with ( you WILL call me crazy, I knew that) (FRE) August calls (damn, so overpriced due to volatility )

My STOPS ARE right under Monday's lows
That is the price to pay for attempt to pick a bottom....

You might have a question - why I am risking so much? Is not it better to wait and not to make "first 10%"? Like "smart CNBC gurus" teach? ( I wonder - when they TRADE if they have so much time to TEACH?)

My answer - in this market "first 10%" might be the "last 10%" and it will be -20% for latecomers.

AND... just you look at this chart, (DXD) - double inverse of (DIA) for clearer reading, 2 days interval ( I always use different timeframes when look at the charts, normally I have 1,2,3 days, weekly AND monthly charts open at once for the same stock )

Look at those wicks - can yu spell "reversal"?

P.S. I will change my disclaimer at the bottom of the page to CNBC's disclaimer:
"When I recommend particular specific this one stock I don't recommend it, nor endorse buying it, I am just here to entertain myself, occasionally make a lying fool out of myself, make money I cannot make on stock market and take credits when occasionally things go right"

How about that???