JULY STOCK TALK II

Question

We start the week at the following levels:Dow11,288.54&#x2B;73.03&#x2B;0.65%Nasdaq2,245.38-6.08-0.27%S&amp;P 5001,262.90&#x2B;1.38&#x2B;0.11%

Vermeer · Answer

We start the week at the following levels:Dow11,288.54&#x2B;73.03&#x2B;0.65%Nasdaq2,245.38-6.08-0.27%S&amp;P 5001,262.90&#x2B;1.38&#x2B;0.11%

Vermeer · Answer

Commentary from a noted market analyst and investor..

The U.S. economy suffers from stagflation that’s going to get worse and may not end this year or even next.

“We’re right in the middle of it right now,”

“I think the ‘flation’ part will heat up, and I think the ‘stag’ part will get worse.”

While didn’t cite the reasons for his pessimism, he has said elsewhere that the housing meltdown and sagging retail sales are dragging the economy down.

On other topics, he says the Federal Reserve is unlikely to have to bail out Lehman Brothers like it did Bear Stearns.

claycourtlesson · Answer

I guess the US stock market got a bye yesterday and wasn&#x27;t able to sell off more.  Exactly when a bad football team gets a bye week in NFL, and everyone picks them to lose to "bye."&#xD;&#xA; &#xD;&#xA;I&#x27;d say this month could be cataclysmic, as I expect EVERY SINGLE financial insititution is going to throw in the towel on their state of business and write down everything that can possibly be written down.&#xD;&#xA; &#xD;&#xA;But even with the write downs, can anyone with a brain imagine that any of them will make money in Q3?  Probably not, but I guess their Q3 earnings will "maybe" be the ol&#x27; "not as bad as everyone feared."  Ooyy yee vay.  Not looking good at all.&#xD;&#xA; &#xD;&#xA;BTW, did oil hit 150 rocks a barrel yesterday?  If not, Morgan Stanley ought to string that icehole oil analyst up before showing him the door.&#xD;&#xA; &#xD;&#xA;Maybe Monday will just not get here?

jaxwhitey · Answer

So we went through 1270 on the S&amp;P, what is the next major support level to look for in the DOW, S&amp;P or NASDAQ?  If the recent selling of coal/steel/ag continues I would guess that we would be heading down rather quickly as those areas are what was propping the market up in recent months.

claycourtlesson · Answer

Tough to really say where next "support" is.  Hate to say it, but it could be 800ish on SP 500 (2002/2003 lows).  &#xD;&#xA; &#xD;&#xA;That may be a little extreme, though.  800 to 1400 was the 2003-2007 rally, so you figure a 50% "correction" from that range would suggest an 1100 level on SP 500.  Probably close, which means basically another 160 points of sell-off.&#xD;&#xA; &#xD;&#xA;Not pretty, but let&#x27;s face it, there is NOTHING which would make anyone feel positive.&#xD;&#xA; &#xD;&#xA;I figure when the spot prices of gold and oil go down the crapper, that will be the last shoe to drop.&#xD;&#xA; &#xD;&#xA;Then do we come off 1100?  Yeah, some sort of "baragain hunting" rally for those who have cash.  Then probably a re-test of that low (who knows when), and if we break support, then I&#x27;d say Great Depression Part II is upon us.&#xD;&#xA; &#xD;&#xA;Scary.&#xD;&#xA; &#xD;&#xA;My rec is all cash, "trading" only-----but gd be careful, nimble, and use stops, cause something like a terrorist attack or mid east full blown war involving Israel could really unleash hell on anyone long.&#xD;&#xA; &#xD;&#xA;BOL

ClubDirt · Answer

i&#x27;m sitting on a pretty significant amount of cash that i want to do something with. &#xA0;it&#x27;s been earning next to nothing in a MMA for a while. &#xA0;i feel like i&#x27;m in a good position as i like to buy in times like this when everyone is so pessimistic but i&#x27;m worried about what might happen with iran and figure i still have plenty of time to get in while all the news is bad. &#xA0;i&#x27;d like to put some of that money into a nice dividend paying stock, maybe something relatively safe like GE, or maybe something riskier like PFE, FRO or ACAS. &#xA0;any thoughts?

KOAJ · Answer

clubdirt - ge is a turdpfe, mrk arent bad plays nowalso T is cheap and pays a nice dividend

ClubDirt · Answer

koaj, say it ain&#x27;t so. &#xA0;i&#x27;m close to putting much of it into GE and forgetting about it. &#xA0;if not GE, maybe JNJ. &#xA0; &#xA0;i&#x27;m interested in PFE. &#xA0;the news is all bad. &#xA0;the bottom has dropped out of the price. &#xA0;lipitor profits will dry up soon (no surprise there). &#xA0;nice dividend. &#xA0;it&#x27;s perfect for me.

jaxwhitey · Answer

Thoughts on AAPL this week with the new iPhones coming out on Friday? I expect good coverage in the news since there are already reports of people lining up this weekend.

Pick up some 180 July calls and probably jump out by Friday afternoon/next Monday morning

claycourtlesson · Answer

Be careful with APPL, Jax.  This one is notorious for having its moves way before the fact.&#xD;&#xA; &#xD;&#xA;If you get on those calls tomorrow and are in the money well enough on Wednesday, dump them.  Manipulators will jack up the call prices for all the suckers buying before Friday.&#xD;&#xA; &#xD;&#xA;You can make money on this, but no, not going to get rich.  The iPhone is just a bunch of hype and hoopla.  &#xD;&#xA; &#xD;&#xA;Fade the hype by selling way before Friday.

claycourtlesson · Answer

My prediction for the SP 500 for this week..................

claycourtlesson · Answer

The current state of the "global economy"............

Aeternus2006W · Answer

Invest in OIL! STEEL! COAL! ENERGY! GOLD! SILVER!OIL! OIL! OIL! WEEEEEEE!!!!!!!!!!!!!!!!!!Short FINANCIAL COMPANIES! WEEEEEEE!!!!!!!!!!!!

jaxwhitey · Answer

I guess I should have bought the AAPL contracts Thursday since its up about $1.50 pre-market and I can only sit here and watch it for another 2 hours and 2 minutes.

KOAJ · Answer

fannie and freddiehousingrumors - Possibility that FASB will change accounting rules requiring FNM and&#xD;&#xA;FRE to bring off balance sheet items on to the balance sheet. This&#xD;&#xA;would require FNM to raise $40BN and FRE to raise $20BN.

wallstreetcappers · Answer

Damn this market sucks.200 pt reversal in a matter of an hour on the DOW, a 50 pt reversal on the NAZ as well.Selling is heavy..across the board.

wallstreetcappers · Answer

I just saw that Koaj..they are killing Fannie and Freddie.And to think this all happened because of Greenspam and expanding the money supply, plus the greed of lenders and financial firms.

KOAJ · Answer

wall - lenders, financial firms, and borrowers are all greedy...cheap money gave them the chance to act on it

just like cheap margin in the late 90s and the next fad in 10 years after the "get rich quick" people have rebuilt their lives from this decade's overextension

wallstreetcappers · Answer

That is partly true. It wasnt cheap margin so to speak rather inexistant margin RULES and low maintenance requirements and when the 25k rule wasnt in effect.

Its all about regulation and the lack of such.

KOAJ · Answer

if i remember correctly it was 2 to 1 with no minimum in the accountnow its 4 to 1 with 25k min cash

wallstreetcappers · Answer

That is initial requirement, but the maintenance requirements were usually 3 to 1 back before the meltdown.

And you are assuming margin and 50% right, so 4 to 1 meaning margin at 2 to 1 and a 50% initial requirement?

The effective change was maintenance requirement, and the ability to have the broker change it or the exchange change it due to volitility.

KOAJ · Answer

referring to initialworking for an OLB in the late 90s, i saw margin requirements change every day without disclosure to the guys on the phones or the customersa customer could login and find themselves in a margin call without even thinking they were in danger

wallstreetcappers · Answer

Koaj,Me too..clients would be bringing cash and wiring daily, then they ran out of cash and had to sell.And the phone guys would be the ones who dealt with it and had to deal with the back office too for funding and requirements and sellouts etc.Late 2001 was a real mess for OLB workers.Man if they bring FRE or FNM down, it will be catastrophic for the real estate markets and the economy.

KOAJ · Answer

wall - i was out of the OLBs by may 01. my place moved, commute got more expensive and no salary bumps were offered. i took the severance and ran

just got off the phone with a friend in the business who was just at his company's gym and knows the managing director of equities...

they got to talking and it was relayed to me like this

my friend "i just put in an offer on a house 25% below ask"
DoE "are you insane? they are down 15% from their heights and will be down another 50% next year. pull your offer right now"

the DoE has been in the mkt since 1982 and is often on tv as a guest commentator

wallstreetcappers · Answer

Sounds similar to my situation in Philly.

When the market started to contract, the parent company of my firm decided to close all outer offices and have everyone truck into Philly and work. I also declined and took the package. At the time I was working in BrynMawr and going to Philly with parking and the city wage tax and extra time it would be like taking a 10k paycut to keep the job, so I left.

I think the prices in the east havent come down nearly as to what they have out here. I keep track of some zips in Philly and the suburbs and pricing hasnt come down enough at all, especially when out here the pricing is almost down to 2002 levels already.

JULY STOCK TALK II

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