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Thread: OK I'm going to go out on a limb here ...

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    Banned Melonie's Avatar
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    Default OK I'm going to go out on a limb here ...

    ... and point out that with this week's options expiry and 'record-breaking' DOW hitting 14,000, it's now time to 'call the top'.

    The US dollar exchange rate couldn't even manage a 'dead cat bounce'. Foreign investors are selling out of hedge funds up to their necks in toxic CDO's. The truth about corporate profits is beginning to trickle out i.e CAT, GOOG, C all down big. Industrial metals up big and precious metals up too. US treasuries being bought due to 'flight to safety' hot money rotation. China reduces income taxes from 20% to 5% to encourage Chinese to save instead of purchasing stocks - plus raises Yuan interest rates.

    loading up on SDS shares !

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    Banned Melonie's Avatar
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    Default Re: OK I'm going to go out on a limb here ...

    ... and here's the ultimate convincer ...


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    God/dess Deogol's Avatar
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    Default Re: OK I'm going to go out on a limb here ...

    I don't think you are going out on a limb. There are a lot of people aware of what is going to happen... it's just a difference of opinion about when.

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    Featured Member Katherine's Avatar
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    Default Re: OK I'm going to go out on a limb here ...

    My boss was talking about this today!

    How the dow is that high, yet the dollar's just getting worse, and we base our rates on 5 yr treasuries, and those have gone way up, and rates ingeneral...

    I think you're calling a pretty safe assumption.

    Sophia_Starina = stripper goddess


    "Guys are so damn lame, the only way they can halfway make up for it is by opening their wallets."

    AznExtasy

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    Default Re: OK I'm going to go out on a limb here ...

    Not sure how recent this presentation is, but sounds like they are talking about the situation we are in today:
    http://www.prudentbear.com/Ppt/stillbear05.ppt#419,42 Goldman Sachs Economist

    .
    Last edited by Melonie; 07-21-2007 at 02:48 AM. Reason: fix link parsing

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    Default Re: OK I'm going to go out on a limb here ...

    I'm just shorting HBs and Financials. It's like shooting fish in a barrel, with a bazooka.

    I think gold finished it's run up, unless oil starts going up again. May as well ignore the devaluing dollar... If gold flounders all week, I'm going to make some bets that it goes back under 655. Especially since we are get closer to when the EU was going to start selling again. I'm sticking to my original thesis, you won't see 700 till after we see 500.

    Based on my observations, silver has been a much better indicator of the dollar strength/weakness this last couple of weeks.

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    Featured Member lunchbox's Avatar
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    Default Re: OK I'm going to go out on a limb here ...

    Quote Originally Posted by lunchbox View Post
    I'm just shorting HBs and Financials. It's like shooting fish in a barrel, with a bazooka.
    Did anyone else buy the CFC Aug 37.5 or BZH Aug 20 last month? unreal.

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    Default Re: OK I'm going to go out on a limb here ...

    Quote Originally Posted by lunchbox View Post
    I think gold finished it's run up, unless oil starts going up again. May as well ignore the devaluing dollar... If gold flounders all week, I'm going to make some bets that it goes back under 655.
    Did anyone else see gold just drop $10 in one minute? So much for waiting out the week.

    /me goes into corner mumbling to himself something about courage of convictions...

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    Default Re: OK I'm going to go out on a limb here ...

    ^^^ I'll be mumbling about 'naked short selling' of gold futures contracts being a very effective market manipulation tool LOL !!! It would really be nice to see the speculators burned for a change in order to re-establish some sense of fairness in the commodities markets. However this ain't gonna happen. If you'll recall, the last time that 'naked short sellers' got caught with their proverbial pants down (London Nickel futures contracts, to be precise) the London Metals Exchange simply changed their trading rules to allow the 'naked short sellers' to avoid actually having to buy and deliver nickel per terms of their contracts when their futures contracts expired !!!

    Also, I see that the Dow is down nearly 300 points so far today, and is down 500 points from when this thread was first posted. At the same time the Chinese stock market hit another record high. This is a pretty clear indication that foreign investors who had held on to their US stock investments despite home currency exchange rate losses are now heading for the exits on Wall St. and wiring money to Hong Kong brokers ! This has a potential for snowballing.

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    Featured Member lunchbox's Avatar
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    Default Re: OK I'm going to go out on a limb here ...

    Ever since the Hunt brothers, the advantage in commodities has always gone to the shorts.

    I'm more focused on the Yen and the TNX as indicators.

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    Default Re: OK I'm going to go out on a limb here ...

    yup, the US economy is so dependent on the Yen carry trade it's scary.

    The recent trend in the US dollar vs Yen exchange rate is scarier still ... because in the past week alone anybody who borrowed Yen at a 1% interest rate in order to loan / invest the converted amount of US dollars at 5-6-7% interest has taken a 3% loss on the exchange rate move. If the exchange rate continues to move another 2-3-4% they will be 'in the hole' on their borrowed Yen carry trade. If that happens, liquidity will start drying up like a desert and it will be damn near impossible for Americans without impeccable credit to obtain financing of any kind at 'reasonable' interest rates.


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    Default Re: OK I'm going to go out on a limb here ...

    Quote Originally Posted by Melonie View Post
    ... and point out that with this week's options expiry and 'record-breaking' DOW hitting 14,000, it's now time to 'call the top'.
    Great call! I felt the same way, but seeing you saying it too encouraged me more to hold off on making further investments (in my usual long-term divident paying gigs). I'm getting 2-5% more bang for my buck than I would have otherwise... so far.

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    Default Re: OK I'm going to go out on a limb here ...

    ^^^ GREAT !

    Actually, after having been nearly caught in the 2000 market downdraft, I'm probably a little 'quick on the trigger' re bailing early on the first real signs of trouble and thus missing the actual top. Therefore I hardly ever go on record making top and bottom calls. But this time it was just too obvious.

    The latest scuttlebut from those supposedly 'in the know' is to watch what happens on monday and tuesday of this week. There is a fair probability of a 'dead cat bounce' into August if the markets do turn up within the next couple of days. In that case the US dollar is likely to stage a small rally and the US markets are likely to keep creeping upward during the low volume trading days of August (where many individual investors are vacationing and not watching their investments closely, thus making the markets easier to 'manipulate'). However, in this scenario the markets are at risk of a MAJOR drop through September and October.

    If markets continue to drop over the next two days, I am told that this will confirm the exit of foreign investor money from US markets. In this scenario a continuing gradual drop in both the US dollar and the markets is to be expected into September and October.


    Also, be aware that you don't have to stop investing just because the markets are declining. There ARE lots of 'contrary' investments available, like the SDS exchange traded fund I bought into which approximates the INVERSE of the S&P times 2 , which was up 12% or so over the course of the last week.




    There are also a number of 'contrary' mutual funds, with examples like BEARX and PSAFX. But if you are set up to trade options, buying October Put options on any of the indexes, or buying Put options on individual stocks which are even more likely to take a dive like the Home Builder Companies Lunchbox referred to, will probably yield an even higher percentage of 'easy money'.

    Also, as you probably surmised already, because the S&P has a major composition of banks and financial houses, it is my opinion that the S&P will be hit harder than the DOW or the Nasdaq when the 'fit hits the shan'.

    ~
    Last edited by Melonie; 07-29-2007 at 03:41 PM.

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    Default Re: OK I'm going to go out on a limb here ...

    Re naked shorts above - I think it is a disgrace that the market has not been transformed. Just about every other western market has been regulated to provide stability but it seems that commodities are immune. It always amazes me.

    It is as if commodities are not important - clearly delusional. I understand why they do what they do, and why government lets them. Still it seems ridiculous to me.

    Sooner or later, they will get burned and there will be a financial catastrophe. Of course I mind less, as I hold real metal and don't short my holdings.

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    Banned Melonie's Avatar
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    Default Re: OK I'm going to go out on a limb here ...

    ^^^ agreed on holding the real metal. Physical gold and silver may not have made anybody rich over the past year or so, but nobody lost big time on them either. I look at precious metals as 'portfolio insurance' against the US dollar pulling another Zimbabwe or the banking system pulling another 1932.

    Plus I am of the probably stupid opinion that sooner or later the central banks will run out of gold to dump / lease, and the speculators will run out of credit, which will allow the precious metals market to trade in a less 'manipulated' manner.

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