vodka is bad
I read an interesting article on GM and the "Wealth Council" or plunge protection team. The article claimed that the PPT stepped in and reverse GM's stock price via a merril upgrade when the stock was down around 20. its interesting because GM is going into the shitter for many of the same reasons that america is a whole is facing. The saying is something to the effect of as goes GM goes the USA. So GM crushing itself under debt, healthcare problems, retirement/pension issues and nothing to sell (export) so it turns to foreigners (Nissan/Renault or in the US case debt to china, middle east etc etc). Pretty fascinating.
So Since last post Ive added to my SDS around 68 bucks, sold my SSRI in 23.5 area, bough some GM jan 07 32.5 puts at $5. Im wondering what to do about my nat gas position - im going to hold it through hurricane season at least. and for the 10% div i can take the pain. I want to also add to my mkt short position - I sold my CFC cause I was a bit concerned of a market rally and once again I was too eary. I think the stock is now under 33. Still I made 65% on that trade...not too shabby. i also like puts right now instead of shorts cause volatility is so cheap - so if the market starts to stumble you could really rake in some nice money.
boom
I think we got the first part of the market downturn this week - SP took a pretty good shot even with the Fed pause. Funny how every time there is a terror even the US market opens down a few handle then finishes positive. At least with the subway bombings and this plane.
My LUV southwest airlines puts have paid off pretty well - unfortunetly through the terror fears as opposed to the company heading down. CFC Charter one is getting creamed which is paying off well - the company basically said no one wants a mortgage and apparently thats a huge surprise to mr Market. I also sold my MSFT stock position at 24.41 however am still long DELL (Killing me) and INTC (Flat). I added to my market short position with some SPY puts - march 07 with a 127 strike which was ATM when i bought them wednesday.
I think the market is going to range a bit for the next week or two as most people are still on vacation. If the market catches a bid I will use that as a chance to short some more - as well as getting long volatility. I have also been looking at GM puts as I think the price of that stock is going back towards 20 - its a matter of how expensive the options are. The consumer is in its last throws I believe and this is what will lead to a recession.
I got that feeling
SP cant seem to rally through 1280 and no one seems to know what the fed is going to do. Volatility is still not existent which - while I understand its summer is certainly surprising. People arent worried and I dont get it. I still have my tech holdings which Im going to peel out of (sell MSFT,DELL, INTC). I will also buy some more SDS which is trading around $70/sh (2x short the SP500) . I continue to hold my CFC and LUV puts.
Secondly with the Home builders index HGX starting to rebound up around 210 I think it might be a good time to start rolling into a new short position with some puts probably early 2007.
People are tapped, the consumer is done. Gas is going to crush everyone either through fueling their cars or having business/industry pass that cost onto the conusumer. Our government is spending everything we have - our taxpayers are aging and the burden is ending up on the young people. This has to play out and I feel like the next 6 months will be the first signs.
