Tuesday, July 01, 2008

Daily Market Recap 07/01

---------- Foreword ----------

Thanks for cruising by to read. Posted daily, just after the close. If you appreciate the effort, don't forget to rec or bookmark the source; JoshSebastian.BlogSpot.com. Enjoi

There's nothing quite like waking up, on day one of your new venture, to find your trading account down 15%. I mean hell, if I was a hedge fund they may have shut me down already. Well, except for last month's profits. :-)

---------- Important Crap ----------

Oil - Apparently there was some sabre rattling concerning Iran and Israel that drove up the oil futures about 2%...then back to the flat line...then back up. LOL. I think oil is ahead of itself. I also don't think Israel can strike Iran in the manner they will need to and I don't think they will try until they can get some other folks on board. However, if you're interested in the prospect...go buy some calls a year out for $180 oil. You may just wake up one morning with a lot more money.

S&P - Is trading inverse oil and $ again (Bespoke spotted this too - It's all about Oil). There is no leader in this market. The futures opened lower then headed the other way. I thought this may be the spike, but no. Now that we're here, I'm calling for a gradual rise or more violent pain. Probably the later. I sold my S&P (hedge) calls. Just like I said...if we don't get a surge today, there will be blood. 100+ points on the dow bloody enough?

ISM - (Jacked from Michael Donnelly) "That sure sounds like good news, and many in the media (USA Today) (NY Times) will tell you it's good news. But unfortunately it isn't. " and "Orders were down from a month ago and are still in negative territory. This is now the 7th month in a row that orders have contracted. True, ISM said production was up this month, and that should be encouraging, but it all went into inventory."

There's a post over at The Big Picture,
with two important charts. Chart 1 shows commodities skyrocketing in a parabola. Chart 2 shows analysts flat expectations of inflation rates. The question is then posed, why the disconnect? There is no disconnect. Targeting inflation to a % leads to parabolic inflation.

---------- Random Crap ----------

The only game in town - I've noticed this jacked notion that whatever is happening in the U.S. economically, MUST be happening to the world at the exact same time.

This is fun to watch because these people obviously understand globalization and the information age. They just throw it out. People used to say...how can you be short the market and long oil...that doesn't make any sense (because if business sucks, they won't need oil). That is a great theory if you live in a bubble. So while it sounded stupid...it has obviously been very profitable for me.

Now, people are talking about an impending global slowdown as opposed to the "containment" of last fall. Hmmmm....that goes along well with my theory of the U.S. credit deflation spreading into a global deflation (EU to raise anyone?). Then again we all know "deflation" can't happen because commodity prices are still rising...which is great for business expansion and inflation (rolls eyes).

The point is...the U.S. aint the only game in town anymore. Plan accordingly.

(Trading was F$cked today. Only a narrow loss, but nerves, errors, Israelis...I had to go take a bike ride.)


SOLD EWZ 90 CALL (+10%)
SOLD EWZ 90 CALL (-30% - I fat fingered this and sold too many. Short term blessing, but I may wake up mad tomorrow.)
SOLD SPY 135 CALLS (-80% - Looks ugly huh? That's the point of an OTM hedge.)
USO 113 PUTS (+0% - Some how this managed to sell itself. Limit order from yesterday?)

XLF 20 PUT 01/09 (+10%, Golly! 6 months to go!)

So really I'm only holding some XLF puts and some (pending) cash right now.

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