Something To Cheer About?

roubini interviewToday, most of the morning we experienced a rather flat day of trading, with some weakness in the financial sector, due to a mixed earnings report announced from JPMorgan, which showed record net profits, but also piled up a severe amount of losses due to bad loans. With the help of some positive commentary from Mr. Nouriel Roubini, a well respected economist, markets covered some big ground in the green in afternoon trading, as the Dow closed up again just over 95 points. Roubini boldly declared the US economy to no longer be in "free fall" and that a strong recovery is closer than we expected.

Before the closing bell today I was able to pick up some shorts on DIG as well as some some more shorts on GLD. In these transitional periods, some of the best, lest riskier ways to makes some money is through commodities. In the long run, I think both gold and oil will be a great investment, especially as we see inflation kick into full gear in 2010. In the 1980's, during the inflation peak, we saw gold reach the + 2000 per ounce levels, which I definitely consider it a strong possibility of reaching those levels again. However, for now, I believe deflationary pressures are winning, which in turn should bring both gold and oil down a bit before the large increase.

We saw a weak report from Marriott today, which was on my short list this quarter. We should continue to expect this out of hotel companies, especially destination resorts. With the continuing unemployment woes, people are traveling much less and bunking up with friends and family. Hotels are experiencing their worst year in decades in which could continue for another few years. Even class A, irreplaceable resort hotels are being foreclosed on, as we saw two very high profile hotels in Southern California go BK last month. I am still bullish on a short on Marriott.

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Closing out tomorrow should be interesting. Despite the large gains today, volume was very low. Even with multiple days of buying, we still cannot spark that massive buying volume that usually comes with a so called "rebound rally." Technically, I would expect a rather strong selling day, as bulls should likely consider taking profits and opt out of holding over the weekend, which is always a risk these days. Keep an eye on Bank of America and Citi earnings results, as they are likely to create some momentum, either up or down. I am hoping for a slight rebound in my portfolio tomorrow, as this week has not been the best. Happy Trading.

3 comments:

  1. Anonymous Says:

    Hi FF,
    how are your FAS puts doing from Monday? I had some SDS and SRS and that hurt.
    With the markets up so much the last few days are you thinking of getting more short at this point? I am tempted, but it seems like getting in front of a train. Its march all over again. Not breaking 870 was huge....its game over for the bears for a while now

    J.C.

  2. Finance Fanatic Says:

    JC,
    not so good this week. TBT and others have kept the wounds shallow, but I definitely could have done without this week. I will probably be sticking more to commodities.

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