4 replies to this topic

[arbman]

So, the theory was whether they can make or lift up the market for a $30B IPO, just $30B, not 100, not 200 and for a company which has 50% high risk junk bonds in its portfolio, not even some heavy large cap influence there, and that is while RUT is underperforming the whole time, and for a company whose owners already enjoyed hundreds of millions of dollars of income, and who can not care less but dump more to the unsuspecting and overly risk hungry public. I meant to write this on several occasions yesterday, that bulls were betting on something way too crazy, perhaps I am the one who is crazy, I went short the close... What prompt me to tell sell short is the volume yesterday was just as much as the previous day on the indices which mostly retraced the losses instead of promptly recovering. So, at least 50% of that volume must be selling, there was a double top in the last few hours, the price and internal momentum did not recover a whole lot other than a typical retracement either. The implied volatilities did not come back down to near the previous day's lows, it was even unchanged on RUT. The equity P/C ratio did increased in the morning, but then it came down for the rest of the day, everyone "figured out" the day quickly after a severe sell off on Wed... Today, there is a pretty big gap down in the futures, I will probably cover at the open, but this is the kind of sentiment that indicates the crowd is probably now conditioned. Remember, the crowd does not reason, the crowd acts on insticts and tradition. When the crowd behavor takes over, even the most rational guy will start to follow the majority and the irrational sentiment will just feed into itself. If the equity P/C does not hit the roof right after the opening today, I would say it will not for a few days and that sets up for a pretty good pull back at least. If so, I will promptly load up the short positions, I expected this move to be the one, but there is the end of the month and holiday related positive seasonality and the conditioned buying on the Fed news, so I still have to be fairly cautious... Good luck, - kisa

[ogm]

Would be interesting to see how the Blackstone IPO plays out. There is a whole bunch of these LBO clowns trying to file IPOs now. Insiders are cashing out. look at the Bear Sterns weekly chart I posted earlier. The rats are fleeing the ship. These guys are sitting on mountains of junk, These are the dotcoms of the 2007. Remember all the goodwill that had to be written off after the aqusitions ? Its just about the same deal here with all that leveraged garbage that can't be properly marked to market. Mostly because there is no market for it. Would be interesting if we gap down and NOT bounce, but proceed to break down through the trendline support. That would suck for the people who bougth for the bounce yesterday, and they will be trapped. If the market doesn't recover the opening gap , by the end of the day they'll be liquidating. Who'd want to sit through the weekend, being trapped long, when there is a possibility of another gap down on Monday, due to another China fallout or whatever else. Lets see if it plays out this way.

Edited by ogm, 22 June 2007 - 08:12 AM.

[arbman]

Of course, they are trying to buy nonstop, this is now getting very interesting. The more important question for me is what I am going to do about it

[arbman]

OK, I covered the trading short here, I will continue to watch... It is interesting that RUT and Qs did not come down as much as the others, it is probably setting up for a bear trap now, if the market was going to break down today, you would expect RUT to lead due to the rate jitters...

Edited by kisacik, 22 June 2007 - 08:59 AM.

[arbman]

Everything was there for the bearish case and it is not working, I am going marginally long here, my cyclical indications are saying another bounce should be near now, perhaps another consolidation day on Monday but the market seems to be getting prepared for the end of the quarter now and it has the high odds for the higher high on the indices. The rates are pretty much in the prices, so the Fed will be probably no news, unless it starts a rally. I will look for shorts at the end of the month from here. No more messages until then, I posted enough noise over the past few days... Good luck, - kisa