Pre Market – July 14th 2008
July 14th – The day that the French people stormed the Bastille Fortress and marked the beginning of the French Revolution.
Will today be the stock market’s own Bastille Day? A battle is a definite, but the outcome remains unknown in the short term. Futures up significantly, bond market remains ‘uncertain’ about the future, crude oil is spiking again, and gold is holding steady.
Our recommendation is to be in cash. If (and I emphasize the ‘if’) this is the catalyst for the next bear market rally there will be time to take a position to take some profits from it. There is no need to be a bottom fisher. Our view of today’s action is that it will be filled with much uncertainty and is likely to be a wild ride. My long term positions remains firmly bearish, short term I’ll be in cash to ‘wait and see’ what happens next. Lisa and I will not be taking any new trades today.
Earnings season kicks off this week and Bernanke speaks to the Senate tomorrow. The long term reality of the market remains focused on the economy, short term excitement is likely to be heavily shorted on any spikes.
Unless you have a suit of armor, a sword, and a strong shield I would stay out of today’s Bastille Day battle in the market. Let us wait to count the bodies that remain on the floor of the NYSE to determine who won today’s battle.
Bernankes opening remark to Senate: “Fiends, morons, lend me your ears”
Good call Chuck. I’m sitting today out as well.
Lehman started selling off after reaching a high of 16.30 in pre-market. It will be interesting to see how traders interpret the GSE stick save and the Fed’s ability now to save other banks/brokerages from failure. Think the Fed will rush in to save Lehman after the obligations they’ve already committed to?
Agree, good call Chuck.
Hi, I’m curious about your take on the US dollar (vs euro or gold). The reason is that you give the recommendation of ‘being in cash’. But myself being an europe based trader, being in (US) cash can still continue to generate substantial losses for me. Thanks in advance.
Thanks, Chuck and agreed. Man, the whipsaws in this market are INCREDIBLE. I have been stopped out of my SKF so many times this last week just to have the market immediately turn and arc back up! Makes me wanna puke! “Where’s the dramamine” is right! Aaarrghh! Cash only today.