The first of many to come?

Vallejo goes belly up

My NorCal city is not mentioning BK but they are many millions in debt....police/fire and city workers pay and pensions/obligations. (promises, promises,lol) Many cities and state governments spent like crazy when real estate/property taxes were going up....now the bill is due and real estate is declining. EVERYONE is in over their head: federal government, states, counties, cities, banks and WAY too many consumers....we haven't seen anything yet. The dollar is nothing but a piece of cotton, hold on to your butts.

Edited by Chilidawgz, 07 May 2008 - 10:14 PM.

you cant rely on pensions or ss or homes for retirement savings. we're screwed.

Oh sheesh! this is terrible news... Given SPX reached to the declining channel top, perhaps the next course will be only a retest next week. There is tremendous put buying, but I think there were many institutions getting prepared for the rejection... I don't know whether the hedging is adequate or excessive, only the price will tell us and it is not in a bullish cyclical state honestly... BTW, the overnight session is right about to make a decision to dump or rally above 1400 for the night. I think 1400-1407 band is a show stopper at this point...

Edited by arbman, 07 May 2008 - 10:18 PM.

i think you will see that the upper trendline you mention on the spx was re-set a bit higher at the tasty slope of ROOT-PHI. yesterday's action (along with the high bull numbers) was the big decline day needed to confirm. this is a good time for multiyear positioned bears to lift long hedges and GO NAKED short in the extra high leveraged index funds, imho.

I accumulated XLF put spreads for June around 26.5, 27.5 and 28 over the past 2 wks. I also sold some May calls this week. It is already below the May lows and it is the only major S&P sector index doing so poorly at the yesterday's sell off. I am following the leader...

arbman, With you on XLE, short @ 27.85. Feels a little oversold here may cover and get back in on Monday - Tuesday. What is your target? Mine is gap fill of 23.46 by end of June. No breach of 22.00 may get me long XLF & GS. JDJ

I am looking another dip into the 25s for a short time for XLF, there is too much put open interest in May, I doubt it will significantly dip below 26 during this pull back. It will be a slow decline probably, the June contracts are also loaded with puts and calls, so the market is slowly pulling back as the time value decays there. The cycle low is in June right after the June expirations, perhaps another dip to 24-25 there too, otherwise it is a trading range unless a running correction. I am more bullish into the summer than bearish for now... (edit: but I must say I will not accummulate any longs until I see a divergence in the new lows, so far the internal structure is weak suggesting mych more price deterioration, it can happen.)

Edited by arbman, 08 May 2008 - 11:36 AM.