maximummarket

ProShares Pioneering the 130/30 ETF

Investing is dying, Unfortunately it is all about performance strategies as opposed to investing now days. Most pension funds have caught on and just buy beta and supplement with performance products. Oversupply of money in these markets. This money needs to be put in the real economy and put to work before market forces elminate the extra money supply one way or another.

Reverse Convertibles: More Financial 'Innovation'

all they are doing is buying the underlying, selling a year out call, keeping the spread between the "interest rate" they give the client and the premium they collect, plus their transaction fee of course. Plus they get to put it as an "asset" on their balance sheet. It's a covered call strategy. What a rip off. I wonder how many clueless financial advisors will fall in line on this one.

Levels of Corporate Leverage Are Too High

Anyone want to take a bet that the indexes screeeeeeam past their resistance with 10 minutes to go today? Volume is really really weak. It wouldn't take too much for the powers that be to crank it through.

Goldman Sachs Principal Transactions Update: Collapse in Agency Program Trading Volume

Once they get all the grandma's and retail investors buying back into this market, they will be on the selling end of of the transaction. They will also be borrowing those same shares back to short.


On May 31 09:43 AM morph366 wrote:

> The only way to interpret recent market action is in accordance with
> the comment above from yellowhoard.
> Somehow though the Fed has to reveal its exit strategy from propping
> the market up, along with GS, without upsetting the applecart.

Goldman Sachs Principal Transactions Update: Collapse in Agency Program Trading Volume

Call your broker dealer and ask them where the 12.22 low on GE came from on Friday. There just happened to be a previous trade that has to be more than 2 weeks old they had to report on friday, so now if you look at the charts you see GE bouncing off of a 50 day moving average with a great looking reversal candle. They are really pulling out all the stops.

Friday Closing Update

Market indices no longer follow supply and demand of goods and services, only supply and demand of money. I think we are already farther into inflation than many of us realize.

A Summertime Short Play with SDS

Carefull, the leveraged etfs are like swimming in theta. You could have been long FAZ and FAS last november at roughly 55$ respectfully. Today FAZ closed at 5.9 and FAS closed at 8.74. If the market trades flat, the extreme leverage on the FAS and the derivatives in the FAZ depreciate. This happens in flat markets after extreme volatility has occured. Same principle with BGZ and BGU but not as extreme.


On May 15 12:56 PM BigJake wrote:

> i don't disagree as I bought it on the belief that hey we've gone
> pretty far, we're at least due for a retracement and well it looks
> like I ended up a fighting the governments PR campaign and fed liquidity.
> That was a fight I didn't want to get involved in. While it seems
> like the flow of good news was over, there are alot of powerful people
> that have their reputations staked on "green shoots", "glimmers of
> hope", etc... While I seem to be in agreement with most that its
> a bunch of BS, I also look at all the past recessions where sure
> enough they just pumped the bubble back up. China seems willing to
> allow us to do it again too. So I see both sides of this trade. I
> have changed my strategy to go both BGU & BGZ with a bit of FAZ
> thrown in to cancel each other out. My plan is to sell into whichever
> is profitable as the market oscillates. I'm guessing we are looking
> at a rangebound trade for a few weeks here as the bulls & bears
> fight it out. If something moves decisively in a particular direction
> thats when its time to roll up the losing position.
>
> Does this make any sense to people or am I out of my mind and about
> to lose my shirt? :)

Ongoing Observations on NYSE Volume

Quant funds, etfs, emini futures, and leveraged etfs are much more prevalent than in 03. ex. The spread between the bid and the ask in the futures is so wide, one can bid up the entire market with a negligible amount of contracts overnight by just taking out the asks and bidding up prices. If certain technical achievements can be manipulated in extended hour trading and certain announcements or dovish speeches can be made on key charting days...the upward moves get exacerbated in a major way. This is causing many indicators to reflect skewness.

BofA's State of Denial

BAC has 27 billion they can convert, then 11.7 billion they can sell from some china holdings. They will probably have another record quarter from "trading revenues" ie insider trading and more bailout money passed through from AIG. That is where they got that "needs 35 billion" figure from. The stress test results will be based on what banks can do, not what they will need to do. It is all a game to make things better than expectations. We still have over 1.1 trillion in short fall from 3rd party estimations, not government and IMF analysts 275 billion bridge figures. Plus, buckle up for commercial real estate.

IMF says the U.S. banking system needs another $275B in common equity, which could mean banks already have enough money, James Surowiecki writes. The IMF doesn't count money already injected through preferred shares. So if the gov't converts most of its shares to common stock, and gets other preferred shareholders to follow suit, that may do the trick.

oh yea, why didn't we think of that before! 275 billion should do the "trick". They certainly are pulling out all the stops for this stress test.

Citigroup (Incremental?) Equitization Talks in Progress

watch out for announcements from all over. Health Care stimulus, GE, Fed govs. Buckle up! I think we end flat to up unless volume picks up.

If Funds Are Buying, Why Is CalPers Selling?

The last 10 minutes of trading yesterday...That was full of orders meant to push up the markets. Real institutions use algorithims to buy and sell blocks of stock. Who drops market orders in really thin volume averages on huge institutional trades? It's obvious the government is behind this, the only question is...how long can they keep it up? Any guesses?

Friday Outlook: Commodities, Global Markets

JPM at 58 PE...Where am I?...(twighlight music)doodoodoodoodood...

Why We Shorted the QQQQ

This market is rigged. Over 600 points in this "rally" has been from peculiar extended hours volume. You can manipulate the futures with a minimal amount of contracts int he after hours. I can't tell you how many short plays I have seen in the last 3 weeks that got squeezed out. Don't expect the markets to be down for long, the government and the financial oligarchs are long the market.

Wells Fargo: Housing a Strength Again

Don't forget all the bearish option activity on wfc that now has to be unwound.