Just had a good shower. Quite refreshing.
Immediately after the FOMC news (2:15pm ET today), I expect dramatic movements in the market. It provides good opportunity to make money.
Key to playing the FOMC news is to have access to the news fast. In this case, I rely on Briefing.com (Platinum service) and CNBC. The next step is to quickly interpret what the FOMC statement meant and what the market interpret it as. Use of Candlesticks charts is also important to me.
If the market interpret it as a pause in interest rate hike, almost any stocks would probably rally. Housing stocks (e.g BZH, KBH, DHI, etc) and home lenders (e.g. LEN) would probably be among the gainers.
If the market interpret it as - more interest rate hikes in the near future, then most stocks would probably slide. The Housing stocks (e.g BZH, KBH, DHI, etc) and home lenders (e.g. LEN) would probably be among the worst losers.
To maxinise returns, I would play at-the-money or in-the-money options. I might even play the QQQQ.
- PersianCat04 (Millionaire-in-progress)
Thursday, June 29, 2006
Awaiting FOMC news
The market had been volatile the last few weeks. It is difficult to choose a play without being slaughtered within the next few days. It seems that in such market condition, an intraday play seems to be the best strategy.
The FOMC is due to make their interest rate recommendation today (2:15pm ET). While a 0.25% increase is given, what is important is the language used - whether further rate hike will still be in the making. In this regard, I find that the market expectation is rather foolish. Which FOMC in the right mind would say that there would not be any more rate hike when inflation is still creeping (e.g. light sweet crude oil is still above $70 (abt $73.35 for Aug futures), metals prices are still high as compared to 1 year ago). Logically, the FOMC would still monitor the inflation figures and would be "data dependent" in raising future rate hikes.
Hopefully, whatever the outcome, the market can find some kind of direction. While I am bullish on some of the US companies, the rising trade and budget deficits, extremely low savings, extremely high borrowings, and high cost of raw materials (e.g. oil, metals, food, etc) painted a bearish picture of the overall US economy.
I expect great movements (and perhaps quite volatile) in the market immediately after the FOMC statement at 2:15pm ET.
As for me, I'm waiting for the right signal to short the housing stocks (e.g. BZH, KBH, PHM, DHI) once the overall market direction is clearer. While I am still bullish on the metals (gold, silver, uranium, etc) stocks, it seems that at the moment, they are market followers (i.e. follow the overall market movement).
If the market reads that FOMC would pause any rate hike for sometime, then almost any stocks would rally at least for today.
- PersianCat04 (Millionaire-in-progress)
The FOMC is due to make their interest rate recommendation today (2:15pm ET). While a 0.25% increase is given, what is important is the language used - whether further rate hike will still be in the making. In this regard, I find that the market expectation is rather foolish. Which FOMC in the right mind would say that there would not be any more rate hike when inflation is still creeping (e.g. light sweet crude oil is still above $70 (abt $73.35 for Aug futures), metals prices are still high as compared to 1 year ago). Logically, the FOMC would still monitor the inflation figures and would be "data dependent" in raising future rate hikes.
Hopefully, whatever the outcome, the market can find some kind of direction. While I am bullish on some of the US companies, the rising trade and budget deficits, extremely low savings, extremely high borrowings, and high cost of raw materials (e.g. oil, metals, food, etc) painted a bearish picture of the overall US economy.
I expect great movements (and perhaps quite volatile) in the market immediately after the FOMC statement at 2:15pm ET.
As for me, I'm waiting for the right signal to short the housing stocks (e.g. BZH, KBH, PHM, DHI) once the overall market direction is clearer. While I am still bullish on the metals (gold, silver, uranium, etc) stocks, it seems that at the moment, they are market followers (i.e. follow the overall market movement).
If the market reads that FOMC would pause any rate hike for sometime, then almost any stocks would rally at least for today.
- PersianCat04 (Millionaire-in-progress)
Monday, June 12, 2006
Friday, June 09, 2006
Market update
Yesterday, the major indices INDU (DOW), SPX (S&P500), NDX (Nasdaq 100), COMPQ (Nasdaq Composite), RUT (Russell 2000) and even HGX (Housing) formed a hammer at a significant pivot low. ETF such as XLE, OIH and many others also formed a hammer.
And it is about time as I do not know how to play the market as most stocks are already oversold. It would be easier if the market correct itself before continuing in its bear trend. At the end of today, if the market closes above the yesterday's high, we would have a confirmation candle. Then the market is expected to have a rally next week (may be a short one though, but we never know). So far, the market is expected to open higher today.
For the rally, I am focusing on the precious metals (e.g. mining stocks like TIE, NEM, BHP). In the meantime, I have been sharpening my skills in trading ES.
- PersianCat04 (Millionaire-in-progress)
And it is about time as I do not know how to play the market as most stocks are already oversold. It would be easier if the market correct itself before continuing in its bear trend. At the end of today, if the market closes above the yesterday's high, we would have a confirmation candle. Then the market is expected to have a rally next week (may be a short one though, but we never know). So far, the market is expected to open higher today.
For the rally, I am focusing on the precious metals (e.g. mining stocks like TIE, NEM, BHP). In the meantime, I have been sharpening my skills in trading ES.
- PersianCat04 (Millionaire-in-progress)
