Use access key #2 to skip to page content.

tonylogan1 (29.11)

Dollar strength, Commodity weakness, CA broke, Market drops...

Recs

30

July 05, 2009 – Comments (7) | RELATED TICKERS: SPY , TLT

As the owner of SPY July Puts, I am excited to read this article. Hopefully the market responds with dollar strength (market weakness) to this report.

http://www.reuters.com/article/marketsNews/idUSL570633320090705

Add to this the probability that we continue to see "good" bond auction results this week, and it could combine to push money out of equities and into bonds and cash (and continued de-leveraging).

Commodity weakness looks likely as well with breakdowns of oil under $70.

If you need any extra bad news to help the market down, the deflationary effects of the downturn in California should be enough to help dampen the overall mood (no bailouts look possible for now, instead CA is going to get job losses and spending cuts).

One last thing helping the cause... 2nd quarter statements are in the books, so the sheep that only check once every three months should be ready for shearing.

7 Comments – Post Your Own

#1) On July 05, 2009 at 5:40 PM, FleaBagger (99.16) wrote:

Don't count on a strong dollar, friend:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aR7yfqUwTb4M

Report this comment
#2) On July 05, 2009 at 5:58 PM, tonylogan1 (29.11) wrote:

Good article to review Flea... although I suspect the people quoted in the Bloomberg article may not be perceived to be as influential.

You can also usually always find at least one person on Bloomberg screaming inflation while another cheers deflation is at hand…

Also, I would never count on a strong dollar for very long.... I am talking a 1 to 4 week kind of run, as the DXY bounced off support in the last few days. It will more than likely retest the down side and eventually break lower, but I don't see it happening for a few weeks until the upside resistance is tested closer to 85+

Report this comment
#3) On July 05, 2009 at 6:50 PM, binve (28.36) wrote:

tony, Nice post man. I was about to write something very similar to this:

Also, I would never count on a strong dollar for very long.... I am talking a 1 to 4 week kind of run, as the DXY bounced off support in the last few days. It will more than likely retest the down side and eventually break lower, but I don't see it happening for a few weeks until the upside resistance is tested closer to 85+

Yep, I agree. Long term the Dollar is in a long slide down, but short term it could get a bounce up off oversold.

I also agree: Oil looks very weak right now and needs to correct fow awhile (short term, I am still extremely bullish on oil over the long term).

Report this comment
#4) On July 05, 2009 at 7:04 PM, PrestonCheek (88.98) wrote:

I also agree: Oil looks very weak right now and needs to correct fow awhile (short term, I am still extremely bullish on oil over the long term).

BInve and tony, I also agree that oil will correct, and is now correcting short term. I don't know how much further down but the further the better IMHO.

I will surely put money in oil long term and any discount I can get is welcomed.

Report this comment
#5) On July 05, 2009 at 9:59 PM, uclayoda87 (30.65) wrote:

 "If you need any extra bad news to help the market down, the deflationary effects of the downturn in California should be enough to help dampen the overall mood (no bailouts look possible for now, instead CA is going to get job losses and spending cuts)."

As California goes, so goes the US.  It will be the anchor that sinks us or it may show us a path to recovery.

The next big country to fail – California!

December 31, 2008 – Comments (1) | RELATED TICKERS: BAC , WFC

After reading Predictions 2009, and oh by the way housing = bad
11 hours ago by DemonDoug | 4 Comments

It dawned on me that the next country to fail is California.  It’s trying to pass to its state employees a worthless currency.  It has tried to finance the Californian lifestyle by spending money it doesn’t have and issuing debt of questionable value.  It has seen its banks fail and real estate values plummet.  You can think of California as the Iceland of the west coast, only bigger and warmer.
In fact, California has achieved a title beyond too big to fail, it’s too big to save.  They can’t even drill off their coast for oil to make up the difference.  Since oil prices have fallen, the oil revenues would not be enough to make up their financial shortfall.  They have already mined their gold reserves and their woodlands have burned down this last year.  Their only hope is an act of God.  Something powerful enough to shake their collective consciousness and awaken them to the reality that even Uncle Sam doesn’t have enough money to keep them afloat.
When the inevitable happens, there will be financial opportunities in the golden state.  History records how Bank of America made its original fortune following the big San Francisco earthquake.  That bank bought building material from Seattle and sold them to businesses in California, while providing the loans for these transactions.  Can history repeat itself?  The old Testament had multiple examples of societies that turned away from God, only to be destroyed and eventually rebuilt, better than before.

California has always been lucky in the past, lets hope their luck doesn't run out.

Report this comment
#6) On July 06, 2009 at 3:39 AM, portefeuille (99.97) wrote:

Yep, I agree. Long term the Dollar is in a long slide down, but short term it could get a bounce up off oversold.

Maybe it is just "range bound"

USD in EUR.

Report this comment
#7) On July 06, 2009 at 2:12 PM, Mary953 (23.42) wrote:

rec 25

 

Report this comment

Featured Broker Partners