Unemployment claims were lower than expected, so we might see some recovry in the banks today. C up 11 cents in pre-market. Although the typical attack by shorts will occur once the market opens.
Bid/ask on the C Oct 5.00 calls have gone UP, since yesterday’s close, while the stock price has stayed flat. 31,000 contracts traded so far. Perhaps lending credence to Eric’s thesis of a 5.00 close on OE?
Can you give us a heads up when the sequel comes out so we know when to sell. Part deux could be nasty!
Will do. In return, can you pop in and tell me a week ago to take another vacation for a week because nearly everything has gone back to last week’s valuation. Eh, September.
I have a buy order in on 2.50 2011 calls. Have a small position at this strike and adding a little to it. My goal is to hold it to expiration and buy and sell calls against it. The buying and selling of calls would be some income and should Eric’s plane theory work then I’m hoping for a nice return on the core position. That’s the plan, we’ll see how it works.
Has everyone moved their distressed financial love to C instead of BAC now?
BAC is moving down from a lack of buying interest but I think (think mind you) that this will shake off some Oct. puts. In other words, say a guy like myself had enough money under management to move a large market like BAC and a pile of now worthless put protection (‘cause you know I hedge) and I’ve been steadily buying with dreams of tractors, boats and green acres. But then one day, I realize winter is coming* and I stop buying and call all my trader friends up and let them into my game. BAC sinks, my worthless puts become worth something and I sell them, roll the profits into worthless OTM calls, and flip the buying switch back on.
The alternative is that the sky is falling. Again. But that song is old and we didn’t buy it the first time. However, if the sky is falling again, the soothsayers will begin making comparisons with the ‘31-32 markets where all the smart people who didn’t get knocked out in the first place began to be culled on false bull rallies.
On the technical side, some specialists are still calling for a pullback. However, (1) we’ve been ignoring technicals this whole year, why should we care about technicals now? What changed? (2) Downward selling pressure is relieved through time. We’ve effectively been grinding sideways which could suggest distribution at the top like we saw in Q4 of 2007 except we’ve been grinding sideways with good volume in the sectors that traditionally lead in a recovery, suggesting that the market was arranging the deck furniture as more players sat down at the table. (3) Technicians forget to make comparisons with the beginning of the year in preference for making comparisons with the March 6th low which was largely driven on false rumors that at least one major bank was going to be nationalized. We’ve had a monster rally from March but a nominal rally on the year. If the rally is nominal, then the technical selling pressure is also nominal. This last point is one of emphasis: market participants with a twelve month or longer investment horizon do not see the technical selling pressure with the focus of the those market participants with a thirty day emphasis.
* All word problems should contain spurious data.
[ Edited: 25 September 2009 11:49 AM by Eric Landstrom ]
Has everyone moved their distressed financial love to C instead of BAC now?
I did last month, taking my profits from BAC>C>BAC>C>BAC and putting them into C once more. I never seem to learn to sell at the first whiff of a rally (the 5.30 move a few weeks ago) so I can buy more shares back when the inevitable drop comes along. Right now I’m not certain if we’ll see 5+ before earnings (or even at or after earnings). If you do get a couple of dimes above 5, I’d be tempted to sell and wait for a pull back and then get back in before earnings. Me and everyone else.
Citi is up on the news that its not the bank being investigated this week by whats his face, the grandstander.
Actually, I believe C is up because of a weekend report that Citi is the largest Q3 gubbament bond underwriter which isn’t surprising since 50% of Citi’s business is international banking.
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