Posted on 06/07/2010 5:55:09 AM PDT by blam
12 Ugly Charts That Scream COLLAPSE
Joe Weisenthal
Jun. 7, 2010, 7:14 AM
Image: StockCharts.com
The futures have come back a bit from the overnight pain, but lately things have looked horrible.
All the key measures of risk and optimism have worsened of late.
As the week progresses follow these 12 indicators to figure out if we're still melting down, or if risk appetite and optimism are starting to recover.
Click here to see the charts >
[snip]
(Excerpt) Read more at businessinsider.com ...
Not prit-tay.
Friday's Controlled Descent in Equities: A Perfect Storm Is Brewing
Ya know, when folks start posting “charts” of “collapse”, it’s probably time to buy.
But the unicorns will be out crapping skittles on Wall Street today. It has probably been ordered.
If Newsweek and Time run panicky cover stories about a forthcoming crash, oblivious to the damage they do to their hand-picked President, then it's time to buy. "Folks" posting charts in Internet articles constitutes barely a dent in the national consciousness.
Does anyone know why Palladium dropped 30% in just a few days?
Scary...
I have no idea, sorry.
Today's corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market.
Poor car sales probably ,, and there’s always rumors about some new catalyst that used different technology.
Either all the sky is falling articles are correct, or this is a buying opportunity. But the VIX is only in the mid 30’s, which is elevated but not astronomical. So the strategy is long puts and long calls. In other words, buy volatility. In fact the best strategy maybe is bear put spread plus bull call spread, about 5% out of the money, maybe for July.
Here’s why: the market is under pressure because of multiple potential threats (euro collapse, isreal vs. turkey, n korea vs. s korea, jobs numbers bad, gulf oil spill). Any and all of those things could either spiral out of control or resolve without longterm damage. (Jobs numbers could be just a one shot bad number because of gulf layoffs, for example, or could be the start of another “dip”).
In any case, depending on which threats resolve and which spiral out of control, the market could go way up or way down. The double-spread strategy wins if it either goes way up or way down, but loses if it stays about the same or in a narrow window.
For me, it’s hard to imagine the market staying in a tight window here. It is either going way lower or way higher. Normally under those conditions the VIX would be much higher, in the 40s or 50s or even more. But VIX is just modestly above normal now.
Last week I already had bear put spreads in place, but now that the market has come down quite a bit I’m going to see if I can balance that with some bull call spreads, as long as the VIX remains low. It may go lower today because futures point higher, allowing you to set up the spreads for even less money.
True, but to me it represents the depth to which the “prevailing” opinion has penetrated the into the structure of market participants.
In other words, when one of my partner’s wife comes over and says “maybe you guys should go short”, we go triple long.
prepare for a run up in equities...
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