Category: General

How important is this stock as an indicator?  Here’s some insight from Seeking Alpha…

“Let’s say an investor decided to buy $2000 of JDSU stock at 24.75 after the 588% run in 1997. This would buy 80 shares. This investor decides to hold JDSU and he does not sell until March 13, 2000. After splits, the original $2000 would turn into $1.34 million. A very modest investor could have been turned into a millionaire in just over three years.”

I’ve got to make a decision.  Futures indexes are all up, Asian markets opened in the positive.  Pointing to an all round bull market opening.  Nothing new is going to come out of Washington before the bell.  They want the cautious optimism to continue until the 11th hour.  The futures market seems overly enthusiastic.  I”ll check it again in the morning.  Selling the shorts depends on two things: will their be a bill that looks like it might get through the House and does the market look to be set for a rally in preparation for a bill to get through.

There are other factors to take into consideration.  Even a short term rally, which looks likely given the Asian and futures markets, could substantially  eliminate any gains my shorts have experienced.   In fact it could shoot them below my original bye-in for a loss.  For this reason I have queued my short index position for sale at the open.  It looks like the market will open with a rally.  I’ll sideline the proceeds to take action after a vote.  If their looks like there are the votes for this plan I’ll buy in to a few selects I’ve been watching including getting back into the Brunswick Corp.   I did not sell my real estate shorts.   May dump those in the AM too.

All futures are down this morning.  Asian and European markets slid down on the Debt Ceiling impasse in Congress. This is serious.  A sell off is almost imminent.  I will most likely profit today but I don’t feel good about what is about to occur to this country.  There will be blood.

Day Low = (10.20)

Day High = +339.50

Closed = +226.50 / +2.6096%

Following a 6.2% return on my first day of betting against the market, this morning I queued the purchase of more Proshares Ultrapro shorts.  I got 50 shares of 3x inverse of the Nasdaq100 (SQQQ), 100 shares of (SRS) 3x Short Real Estate and 100 shares of (SDOW) 3x shorting the Dow30.  Hope my trades occur at or near yesterdays closes.  This is one of the few times these none-diversified funds could have changed value during premarket trading as everyone runs from their primary holdings.

Japanese auto makers are restricting delivery, QE2 is ending because of inflation concerns, the debt ceiling is being used as a political obstructionist tactic.  The Dow will be in free fall below 11K within 60 days.  Shift everything to inverse indexes now or suffer the consequences.  I hate to see people (and their 401K’s) get hurt and there’s nothing but pain in the forecast.   Groupon might rally for a day or two but the reality is grim.  Fear and panic are already taking hold and as much as it sucks it is time to bet against the S&P, Russell, Dow and because of the recent contingency in the South China Sea and their adjusted currency valuation, it’s even time to bet against China.

So Groupon filed for their IPO valued to rake in at least $750 million.  Ain’t gonna fly like LinkedIn.  When can I short it?

In preparation for July I’m going to start looking into 2x inverse ETF’s such as those from Rydex, Direxion and ProShares Ultra. Primarily Investor Sector ETF’s like SZK – 2x Inverse Consumer Goods and SKF – 2x Inverse Financials (nothing like betting against the banks).  There’s a few reasons I’m going to gamble against the markets:

1. On June 30, the Federal Reserve is expected to shut the door on the quantitative easing program QE2.  It seems universally agreed this will lead to market volatility.
2. There will be a sell off in stocks.  Oil prices are starting to dig in now causing Bear Sterns to issue a recommendation to go light on commodities.  If the stock and commodities markets fall together a good ETF is where to be.
3. Bond yields will go through the roof when QE2 ends.  That will mean very few bond buyers.  Bond prices will fall and US Treasury yields will spike.  A bond sell-off in the U.S. could result in sovereign debt fears of the type seen in Greece.
4. Last but not least, the 10,000 pound elephant in the room: The Debt Ceiling.  If for some reason we even get close to August 2 without an increase in the debt ceiling the end of QE2 will look like a tiny market adjustment.  Markets will panic, sell-offs will ensue.

Just today the ProShares UltraPro ETF’s such as SRTY (Short Russell 2000) and Powershares Crude Oil Double (DTO) closed up 9.3 and 4.91% respectively.   Due to recent successes in the market they are at or near their 52 week lows making them good deals right now.  If the politicians live up to the credit I give them they will argue the debt ceiling until the last minute or not raise it at all.  I want some of the Sept. and Oct. 2009 short fund action after Paulson’s famous “we won’t have an economy on Monday” speech.  The end of QE2 combined with the debt ceiling could make this looming “catastrophe” even more profitable.

For those who can’t get enough of this and want to know Kate Middleton’s new official and future royal titles, I went through the exercise of researching her royal ascension.  It might surprise you.

Catherine, Duchess of Cambridge, will actually be Her Royal Highness Princess William of Wales only after William becomes Prince of Wales once his father ascends to the throne or dies, whichever comes first. Then she will be Princess of Wales. She doesn’t have to wait for William to ascend to the throne to become Princess, as many have incorrectly stated.

When Charles becomes King she automatically becomes Duchess of Cornwall and Rothsay. When William ascends to the throne she will be Queen. Since an heir can only ascend to the throne through blood Prince Phillip has been forced to remain a lowly Prince to his Queen Elizabeth. He could not take the title of King because the throne supersedes the Queens. Not so for Catherine. William will be King and she will be his Queen.