Protection

[Grieve]

If US Defaults, Stocks Fall 30%, GDP 5%: Credit Suisse
Anyone buying Armageddon protection? I bought some QQQ way-out-of-the-money puts. And still got my silver call spreads.

At first I thought there was no way there wouldn't be a deal by Aug 2nd. Now it seems like there is no way there could be a deal...

[Vanraw]

I was like you. Im kinda waiting on a large bump once something passes. But now I dont know.

Getting some puts is probably a really good plan. Perhaps in some nice over inflated tech stock that will just take a beating......

[Vanraw]

Seriously, WTF is going to happen next week. I had my finger on the Sell all button several times on Friday. The debt ceiling issue is less concerning then the GDP data.

[Grieve]

I'm hoping we get a bigger drop so I can buy some more options on sale. I sold some of my call spreads expiring in August and October, but I'm holding onto the Jan 2012 ones. I think any drop will be temporary, and the economic news WILL start getting better. Certainly corporate profits are on fire.

[Grieve]

Getting ugly out there.

I sold half my protective puts yesterday morning, since they had doubled. That was a mistake...they've tripled as of right now, and it looks like stocks may have a lot further to fall...

[Vanraw]

I wonder how far. We broke 11k. The debt shit is gonna pass, though there will be mumbling and rumblings, it will subside. So what is the next Good / bad news cycle that will hit the market.

What if...

The Bad...
- Double dip recession? If we had signs it was here I could see the dow dropping to low 9k.
- Moody's drops US to AA from AAA. I could see a small dip perhaps lower 11k, but then it would move back up.
- Italy or Spain pukes. I dont see Euro causing a USA depression. They are more reliant on us. So Low 11k and then back up.
- GDP or unemployment or bad earnings.... See double dip above.

The good
- Unemployment news goes positive, and dips into the high 8%. I see the DOW going to high 12k perhaps low 13k.
- Positive earning / GDP. Same as above.
- umm I cant think of anything else good right now.

[Grieve]

Good point. Even Doug Kass was saying that the bad news is baked in, so maybe we are nearing a bottom. And two of the rating agencies have already reaffirmed AAA (for now).

I think the double-dip is still the biggest fear. Lots of layoffs announced by big corporations recently, and the debt cuts aren't going to help that.

[Vanraw]

Interest read.

World Poorly Placed to Meet New Economic Crisis

[Grieve]

Looks like Armageddon may be arriving today (at least in stocks).

[Vanraw]

I'm betting on a bounce after this. Just bought into TNA. a leveraged bull ETF. Up 1% since I bought it. If this is a correction, and the market bounces it will be a quick 10% or more.

I hope

[Grieve]

I was betting on a bounce yesterday (sold the rest of my puts in the morning), but then today happened. I'm going to wait and see before doing anything else...don't want to try to catch a falling knife...

Man, my stocks are really getting murdered today, though. FCX down 6%...FFIV down 4.5%...POT down 5.5%...RCBN down 6.5%...NFLX down 4%...

Even my supposed hedge against disaster, silver, is getting taken to the woodshed today - down 7%...

[Vanraw]

Yea, Im down 5% on the leveraged etf now, but I think it will be a ok, even if ok ends up being a long position.

Really surprised this thing took another turn south mid day today. Dow was down 400 points for a while there.

Not sure if you read the link I posted above. I think its interesting that there isnt a "thing" you can stick this on. ie, 2008 was a Leaman and the bank / housing crisis. This is just a "growth isnt as strong as hoped"....

In the end here, I think this is just a correction, and I think it is going to leave allot of good deals on the floor, if you have cash. Friday might be another bad day. I guess we will see what europe does.

[Grieve]

Ended down 512 - yoikes! I agree it's not a "thing", but it is "lots of things". Not just growth, but also Europe, the continuing debt nonsense in congress, jobs, Fed out of bullets, etc, etc.

Pretty scary stuff.

[Slamz]

That's the part that worries me -- we're out of bullets. If this turns into a double-dip recession, what are we going to do? Lower interest rates? TARP? Bailouts? How much wiggle room is there?

I was surprised to see silver drop, though. Usually when there's big economic fears like this driving stocks down, it seems like gold and silver rise.

Wish I knew what Friday would bring. Tempted to jump back into Amazon. They took a small hit from an announcement about a bill that would seek to impose a federal tax on online sales -- something Amazon has said in the past they don't fear, so long as it's uniform -- and then the dive today took them down a much bigger notch. Guess I could buy and just plan on holding long term if the market dives again. I still think Amazon is a company with a lot of good ideas and room to grow, but it would be painful to buy right before what could turn into double dip... lotta doomsayers in the market news feeds.

[Grieve]

Gold and silver fell because of margin calls as stocks fell, not because of weakness in the metals. In other words, if you owned stocks on margin (borrowed money), when they fall suddenly, your broker comes calling for cash. So you have to sell your gold and silver to raise that cash. I expect both to go back up.

Stocks...i don't know. It seems overblown, but people are spooked by the last crash. They may just get en mass rather than risk staying in.

[Vanraw]

I think its more then people being spooked, but the algorithms the machines use being spooked. The volume patterns were strange.

But I have zero absolutely sub zero, any idea what the hell is going to happen Friday. I did what Slamz suggest and jumped in for the slight run back up, and figure Ill hold long if I have too.

We might see massive exodus tomorrow with a drop of hundreds more in the DOW or we could see a nice 200 point gain, or more likly, opening low and then just whimpering flattish.

[Grieve]

Saved by the jobs report!

[Vanraw]

Which is interesting because it pretty much feels like what ADP was saying in the beginning of the week. This big drop smells more and more like a "market makers" manufactured correction.

[Grieve]

Holy headfake, batman! This is starting to look really bad...

I want to buy up some "bargains", but it's a pretty scary prospect right now.

Edit: Crap...the protective puts I bought for 50 cents and sold for (I thought) a nice profit at $1.17 and $1.55, are now worth $4.25...

[Vanraw]

Edit: Crap...the protective puts I bought for 50 cents and sold for (I thought) a nice profit at $1.17 and $1.55, are now worth $4.25...

lol, stop looking at that shit. It just makes make bad choices later.

[Jakensama]

I picked an awesome time to open up my own office in an industry based on shipping consumer goods.

[Slamz]

So whaddya think about Monday? Friday seemed a bit of a wash. Unemployment figures didn't change much and the market didn't move much.

USA credit rating down to AA+ after markets closed. Nobody will care? Stock up on shotgun shells?

[Grieve]

I have a feeling we will see a bounce on Monday. Now that the downgrade is out, I can see it being a "sell on the news" (in reverse) type of thing.

I will say that it is VERY suspicious that the market got hammered so much BEFORE the S&P downgrade. I'd lay money that news leaked out to some big players earlier in the week, and that led to the massive selloff.

The other big factor for Monday is the big meeting in Europe on Sunday. If they come to a big deal on the European debt crisis that could spark a big rally. Or the opposite if they don't.

[Vanraw]

I suspect we will see a bad Monday. At least I think it will open bad. Prediction would be the dow somewhere around 200 down at the open. Mostly the "buy and hold" crowd saying , fuck this, and placing sell orders in this week end.

But I think we will see a week of meh.... A couple of good bounces perhaps, but doubt we will see last week recover.

FYI, if your looking for a mortgage in the near future, lock in those low rates now.

[Grieve]

You could be right - right now Dow futures down 250, Japan down 1.5%, gold up 2%, silver up 4%...