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- ETrade has injected a very healthy amount of fear into the market yesterday- not a bad time to reload- buy ETFC
- Commodities have finally started a decline... It does not smell like a mere correction - it smells like a real decline here- wait for a quick dead cat bounce and short RTPs and BHPs of the world...With most of the world slowing down dramatically how could commodities go up?
- At the time of fear correlation on the downside increases dramatically hence any markets with high Beta (BRIC) will decline faster than the US. The question here is whether we are up for a 4-5% short term bounce? I am not sure yet, so I'll wait before loading on FXP (ultra short China 25) - sold all ultra shorts why are they are still up...
- Watch for retailers on any signs that demand is picking up- WMT and TJX first sings today?
- The rebound will be led by tech decliners- RIMM and AAPL? Again I would not expect the commodities decliners (FCX, POT etc )to rebound all the way back for now...Some gains are certainly in the works but not enough to take the risk...
- Financials leading the pack? How long could it last? We have not yet heard from several banks on the write offs? Are those priced in now?
- Everyone expects the Fed to cut rates- what if they don't? How hard could the market fall? Will commodities lead the sell off again?
- 50BP rate cut is now widely expected? Why? Market tends to overreact so this could be the bad one...No Santa Clause rally here in my book...
- Goldman has started unloading the emerging markets, I am in a full agreement at this point- all rallies one day come to a rest...
Anyway trade safe and cheers,
Vad
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Comments (2)
Vad, on Financials, total market cap 2.7 Trillion, down 15.4% past six months, that would be 491 Billion decrase in market cap.
WSJ 11/08 had a headline grabbing estimate of 250 to 500 billion total carnage on sub-prime/credit crunch, to include FASB 157.
Overall, the losses may be priced in - the question would be whether the amounts in individual stocks are correct. Meanwhile the P/E for the Sector is 11.0.
Tom
Posted by Thomas Armistead | November 14, 2007 9:27 AM
Tom,
Given the fact that most banks and insures trade based on Price/Book ratios I would counter that we might have another 15% correction potential if you believe the worst case scenario
Posted by dishwasher | November 18, 2007 5:45 PM