It’s funny that a small ISM data can push the market so much. No one cares about the weakening growth. All they care about is forced inflation.
The FED will force it. That’s what most people are thinking. The economy is growing too slowly. GDP is expected to grow at only 1.5% in the second half. So the FED needs to do something. However, QE doesnt work. We have seen how Japan has tried so hard, but it still failed.
QE helps to boost market optimism, but the real producers are not borrowing as they fear the reality of a weak economy.
The next round of earnings is here. I am afraid that ALCOA’s trend will come back… Look at all the previous ALcoa’s post earnings trend. They were all down. The market corrected almost 8% at every Alcoa’s earnings.
Will this happen again???
In the last call, Klaus Kleinfeld, CEO Alcoa, said that he expects 2H to be much better, with growth at 12% instead of 10%.
This means Alcoa should surprise us? Is this why the optimism is here? We will see this thursday.
I will be buying PUTS the protect long positions, and shorting a small bit on Material stocks which have gone way up. I was lucky to take abit of profit off my FCX short pre-market, as the BOJ news might increase risk appetite.
I have reshorted FCX at $91.5. And I think I will hold this short to $75 if it ever goes there. The market might crash.
Marc Faber says sell and go away in OCTOBER and NOVEMBER and come back when the market is deeply oversold.
Doug Kass says sell at 10600.
Pretcher (the most bearish of them all) said to be careful of a correction that may bring the S&P near september lows, but the march low is pretty protected.
What;s the trade.. short in anticipation of the ADP and Alcoa’s earnings.
Happy trading.
to Tolits --- Let LVS run abit more before the big drop to its real fair value. Or start taking small profits here and there.
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You might think I'm crazy but I shorted BAC today..... and I will carry the short position for a few weeks. I believe that the recent climb was unwarranted and expect the pps to drop substantially in the coming weeks. Your thoughts?
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