Watchlist:
AF,AGO,AINV,AU,BAC,C,CBG,DCOM,MER,MS,NITE,
OTTR,OXPS,PHH,SLM,UBS
A non-event for me today. A lot of stocks had gapped big and so there wasn't much room for more trending up action. Sideways was the common theme. Watched the market for a while, but didn't really feel confident about trading anything, so left it.
The big news was obviously the shorting ban. Lot has been said already about it, but the one fact IMO is that it is bad for traders. And it relates somewhat to my "trading for a living" piece I wrote a while back, in terms of what to do if your strategy stops working and having to adapt a new one but still make a living at the same time. In this case the strategy hasn't stopped working as such (just referring to shorting here), but we can't use it, so the end result is effectively the same.
I know that the ban is just on financials and also just temporary, but we'll see what happens. Won't the same problems reoccur ? What i mean is: shorting has been banned, so prices will go up. Then on Oct 2nd (or whenever the ban is lifted), hey presto we can short again, so won't the prices start to fall big time again ??? If that is the case, then what is the point of it all anyway ?
One thing I am glad of is that I still have my normal job while I attempt to trade these very difficult times. And I can look further into other aspects of trading which I can add to my arsenal, something I have started doing anyway before all this rukus kicked off.
Anyway, have a good weekend all, and we'll hope for some stable decent trading conditions next week.
6 comments:
TR: nice post. I am concerned. Ralph
Trader AM,
That is exactly what I was thinking about the ban being lifted on October 2nd.
Of course, the market doesn't care what I think, but these banks are still shitty companies that made bad decisions and that needs to be displayed in their stock price.
This makes for market inefficiency, so it will be interesting.
Have a good weekend.
Tyler
Hopefully, a plan will be implemented to take off the bad debts from their books by Oct. How about enforcing the no naked shorting rules??
we'll see if the "ban" has the effect of the market NOT going down.
Jeff,
I truly believe this is the beginning of a major GLOBAL collapse.
So much money has been put in this market and they are now talking about possibly HALF A TRILLION to try to save it. And this doesn't count what was spent on Fannie, Freddie and AIG.
Not a pretty picture ahead folks...
"Q"
I agree that 'banning short sales' does not solve the problem but I imagine it will make the financial stocks less volatile and less prone to collapse until some kind of solution is reached. I think the idea is to remove the bad debt issue from the banks (ie: sub-prime loans) so the investor angst would disappear. Who knows if it will work and, more importantly, should they have done it in the first place. We're just printing more and more money and, in the long run, this will end up being more costly then letting these banks, who took on risky investments in the first place, fail. Of course, we're bailing out the banks who made stupid choices but who will bail out the homeowners who made stupid choices as well? Not looking like a balanced approach. Also, the CEOs of every bank that's benefiting from any govt bailout better not get huge bonuses. I mean, really... why should they. That would be an outrage.
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