Goldman, Lehman Rating Outlook Cut to Negative by S&P (today)

http://www.bloomberg...6...&refer=home

Thanks. Can't think of a better tell Monday than seeing the reaction to this news. Like FDX and other's, terrible news reactions spoke loads at least for the day Thursday. It has been a long time when bad news was absorbed as it was yesterday. I know I know it was just "a bear mkt bounce".....I could care less what it was, as I trade for a living and it was clear that mkt wanted up yesterday, which matters not Monday. At the same time, over several decades of trading, last week was as scary as I have ever seen including 9/11. There was fear Sunday night Monday a.m. Put call and trin (as I use and manipulate the raw data) was at historic extremes. We now have a great place to trade from 1250. Below it is hell above it is potentially very profitable if nimble. Over 1398 cash is quite interesting. There is enough stucture which makes being bearish from a swing point of view dangerous imo. Why not wait for 1250 to snap as it will give 100+ handles very rapidly?

and again... on thurs... there was very large volume on OTM april puts (LEH, MER but not GS)

Gawd, this is sooo SIMPLE. There's nothing at all to be bullish about.

This is a serial train wreck.

1) Mortgage Brokers... A WRECK, over 200 MBs BANKRUPT!!

2) Bond Insurers... BROKE and INSOLVENT

3) Investment Banks.... BEAR STEARNS tip of the iceberg. We'll see one a quarter of these go under at a minimum.

4) Hedge Funds .... A string of failures already and more will come

5) Commercial Banks... Citibroke will be the first major bank failure followed by many regionals and at least one or two more major banks. Heck even the Arab Sovereign Investment funds have said... they won't make it, we need more investment. And are they getting it? HELL NO!

All I hear is bullish reversal setups... EVERY ONE HAS FAILED.

And lost in all this is those stubborn trend-followers from the bull market. It's like an old VW, you turn the engine off and it continues to "diesel" turning itself over with no spark, just excess fuel. No forward motion, just trying to continue a dead cycle...

The ignition is switched to "OFF" here. Whether you realize this or not, there is a seller behind EVERY ROCK... that is why the Nasdaq can't get over 2275. There are sellers out there who have programs set to "SELL ALL YOU CAN, AND THEN SOME" at that price.

Go ahead bottom pickers, defy those fundamentals. Fade those sentiments. That works fine in normal times. THESE ARE FAR FROM NORMAL TIMES.

Gawd, this is sooo SIMPLE. There's nothing at all to be bullish about.

This is a serial train wreck.

1) Mortgage Brokers... A WRECK, over 200 MBs BANKRUPT!!

2) Bond Insurers... BROKE and INSOLVENT

3) Investment Banks.... BEAR STEARNS tip of the iceberg. We'll see one a quarter of these go under at a minimum.

4) Hedge Funds .... A string of failures already and more will come

5) Commercial Banks... Citibroke will be the first major bank failure followed by many regionals and at least one or two more major banks. Heck even the Arab Sovereign Investment funds have said... they won't make it, we need more investment. And are they getting it? HELL NO!

All I hear is bullish reversal setups... EVERY ONE HAS FAILED.

And lost in all this is those stubborn trend-followers from the bull market. It's like an old VW, you turn the engine off and it continues to "diesel" turning itself over with no spark, just excess fuel. No forward motion, just trying to continue a dead cycle...

The ignition is switched to "OFF" here. Whether you realize this or not, there is a seller behind EVERY ROCK... that is why the Nasdaq can't get over 2275. There are sellers out there who have programs set to "SELL ALL YOU CAN, AND THEN SOME" at that price.

Go ahead bottom pickers, defy those fundamentals. Fade those sentiments. That works fine in normal times. THESE ARE FAR FROM NORMAL TIMES.

chill bro. what ? do u have have a vendatta against da bulls ? its only a market. the market always wins.

When Citibank hired Vikram Pandit as CEO, I knew they were in deep ******** and wanted a scapegoat to hang the bell on.

Semi, I agree this pig should fall. But what is probably holding up the market is all the soveign wealth funds. Petro dollars + Singapore + China = massive buying that is counterbalancing the US domestic selling. The petro dollar and China camps want to recycle dollars. The China camp does not want the Yuan/RMB to appreciate. At the same time they have been hit hard by losses in treasuries. Catch 22. They have recently found that owning a piece of the market is better than treasuries. Because hedge funds and the like are not transparent, we really do not know the extent of this flow of funds. It is there, you just can't see it. Just like adding more CO2 to the atmosphere. But just like global warming, at some point these flow of funds will be seen and it's impact noted as significant. So the old rules may be out the window. Maybe it "really is different now".

If it is as bad as you say it is, why did they buy it Thursday and close it near the high. I thought that no one would want to hold over the weekend (S&P downgrade brokers) due to the unknowns but they bought it and now their saying we are in a rally (IBD). Does that count for anything? Till break through 1260 ES convincingly we are bottoming or in a sideways trading range 1280 - 1340.

This time it is different.

There are many more hedge funds than there were in 2000.
The developing economies are in a contraction and last but, not least.
We are in the first third of an debt/credit economic calamity not seen in this country since the 1930's.

The Fed can put a finger in a hole in the dyke. The sovereign funds can put a finger in a hole in the dyke but,
for every action, there will be an equal but opposite reaction that, will offset in another way another part of the economic problems.

An example is Bear, Stearns. Sure the Fed/Treasury got involved and did what they could to mitigate a domino collapse but, you and I, the taxpayer have bought for 30 BILLION dollar, trashed mortgage notes. How many more times are they going to do this? How much more money will they print to save the ibanks?

How long and how many times can we do that?

How long can the dollar backed, only with the "good faith and credit of the United States of America," be worth a [bleeeep] to the world.
How much longer will other countries buy our notes?.... Underwrite our debts?

"A strong dollar is in our nation's interest and the currency values should be set in a competitive marketplace based upon underlying economic fundamentals,"
-- Henry Paulson, October 19, 2007

"We believe in a strong dollar policy and we believe, and I believe, that our economy has got the fundamentals in place for us to be, to grow and continue growing,"
-- George W. Bush, February 28, 2008

"Folks are making fun of the dollar. Our enemies around the world are pointing to the unreliable dollar as evidence of American weakness. It’s as though the administration’s neglect of the dollar is “peso-izing” or “Latin-Americanizing” the greenback."
-- Larry Kudlow March 3, 2008

Edited by milbank, 22 March 2008 - 11:45 AM.

If it is as bad as you say it is, why did they buy it Thursday and close it near the high. I thought that no one would want to hold over the weekend (S&P downgrade brokers) due to the unknowns but they bought it and now their saying we are in a rally (IBD). Does that count for anything? Till break through 1260 ES convincingly we are bottoming or in a sideways trading range 1280 - 1340.

Keep your eye on the ball, mild volume market games isn't "the ball" unless you are only interested in VST trading.

"The ball" is the larger economic context the technicals are working in.

Edited by milbank, 22 March 2008 - 11:51 AM.