Session of 03/01/2007

[makingmoney]

China stock can go down 10% more, but that will have less effect on US market than when it first went down. since when Hillary Clinton is an economist? Greenspan already changed his remarks, he just said in Japan: Reccesion is not probable! on top of this, today's numbers suggest a still solid economy. on top of this again, market recovered from the steep drop at the open. put one more thing on the top, if you are looking at a regular chart, you have to draw a bull conclusion, at least short term. So I sold all my shorts and going long exclusively. But only for a couple of days.

this is just my thinking. I might lose shirt on this thinking though.

[BigSully1]

Just a thought but it was rumored Greenspans comments on the "R" word triggered the China sell off. Hilary Clintons words that are being repeated on CNBC should hit China hard again if thats the case. Is there a overall China pure play such as a ETF that we can short?

If China has another down day I think margin calls will send them in a tail spin

PowerShares Golden Dragon Halter  PGJ

[BigSully1]

Chinese auto sales jump 28th February 2007
Int 2006 FC Thumb.jpg (6.0k)

Read more about the platinum group metals markets in Johnson Matthey's bi-annual reviews click here.

It has been suggested that there will be a substantial increase in the sale of vehicles in China this year.

Statistics quoted to Bloomberg by an analyst from Beijing Antaike Information Development have indicated that demand in the Chinese market is set to flourish in 2007, as the country's economy has made car ownership more affordable for many people.

Over the past ten years, the Chinese economy has grown by nine per cent per year and during 2006 sales at automakers such as General Motors (GM) and Volkswagon increased by around 25 per cent compared to the previous year.

Vehicle sales in China surpassed Japan for the first time during 2006 and it is anticipated that such growth will continue, with the China Association of Automobile Manufacturers expecting sales to rise by 18 per cent across the vehicle sector during 2007.

Commenting on the growth, Beijing Antaike Information Development analyst, Jin Xiangyun, told Bloomberg: "The market share of diesel vehicles will grow rapidly as more rigid standards for emissions are in place or are to be implemented worldwide on environmental concerns."

Could that be another reason why Goodyear GT is up so much? I was considering a short at $27.

[dnickers]

This is not about china this is about the U.S. the potential for a slowing economy. The negative housing market and collapse of the subprime market.

I agree - this is not and should not be about China.  Further, the housing market decline is already known and figured in.  The housing market is also just correcting.  You think the housing market will ever get cheaper?  Maybe a little, but definitely not over time.  The population worldwide is growing exponentially!  There are only so many places that people want to be, and the demand for those prime locations around the US/world will never go down significantly.  Nor do I believe there will be a collapse in anything - that is really a dramatic sounding word that implies complete failure.  People have access to so much information these days - and the investing body is very well informed...how can one think a total collapse in anything is possible?  The last couple days around here have made it seem like the sky is falling.  I think we just need to slow down and let the market digest what is going on.  Then we can evaluate the situation.  All this seems a bit premature.     

Full blown recession?  Collapse?  Not likely.  Slowing?  So what.   

[WallStreetnBio]

I believe all these little rallies are false.  They are closing open gaps from Tuesday and will more than likely fall    No hurry to jump back in on the long side of these tech stocks

I think your right. Weak hands that are short are covering but I bet tomorrows open is down again. China has to tighten up there markets with either currency, equites, trade policies, copy right laws etc. etc....something has to happen and i think things might get ugly

When  this market drop is over with...we'll all buy these fundamentally sound stocks and make lots of money . 

I think this rally has further leg. it can run for a couple of days. For the big picture, this is only a correction. I don't think it is the start of a bear market. China is doing fine, their market is overheated, so what? I don't want to be disrepectful, but the mention of copyright laws is a joke. what is that to do with market drop?

stealing patents is a very serious situation in china. american corporations are losing millions because china steals everything. the point i was trying to make is markets dont like it when policies tighten up. the bottom line is china needs to tighten its policies and i think its a lose lose "short term" for our markets

[ravenquork]

This is not about china this is about the U.S. the potential for a slowing economy. The negative housing market and collapse of the subprime market.

I agree - this is not and should not be about China.  Further, the housing market decline is already known and figured in.  The housing market is also just correcting.  You think the housing market will ever get cheaper?  Maybe a little, but definitely not over time.  The population worldwide is growing exponentially!  There are only so many places that people want to be, and the demand for those prime locations around the US/world will never go down significantly.  Nor do I believe there will be a collapse in anything - that is really a dramatic sounding word that implies complete failure.  People have access to so much information these days - and the investing body is very well informed...how can one think a total collapse in anything is possible?  The last couple days around here have made it seem like the sky is falling.  I think we just need to slow down and let the market digest what is going on.  Then we can evaluate the situation.  All this seems a bit premature.     

Full blown recession?  Collapse?  Not likely.  Slowing?  So what.   

Your comments are breath of fresh air. Nothing wrong with taking a cautious wait and see attitude.

[buddjas1]

David, I have a feeling that the market is going to end positive today and maybe even erase the 4% or so decline by the end of the week.  In fact, SP just went green as I write this.  At what point would you have to change your mind and become a bull again?

...Personally, I dont see it happening, I mean, what will be the catalyst?  Earnings season is over, oil is going up, geopolitical instability remains, the yen carry trade hasnt yet fully unwinded, etc.  So erasing the 4% decline by end of week (ie tomorrow) is a bet that I would put my whole portfolio against if I could.

The catalyst is that there was no legitimate catalyst for the downswing in the first place.  Once people realize that (and I think it is happening) our little bull run will continue. 

[nullzero]

A ETF Chinese play you could short would be the [FXI] The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index.

Also here is one for Hong Kong

[EWH] The investment seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Hong Kong market, as measured by the MSCI Hong Kong index.

[ravenquork]

from Kyodonews International:
Nippon Steel, JFE (steelmaker) and KOBE Steel, which are Japans big three steel producers, all announced upwardly revised 07 estimates (9.6, 9.5 and 18.3 % respectively). 
This doesn't sound like they are anticipating an asian recession this year. 

[tokyopua]

David, I have a feeling that the market is going to end positive today and maybe even erase the 4% or so decline by the end of the week.  In fact, SP just went green as I write this.  At what point would you have to change your mind and become a bull again?

...Personally, I dont see it happening, I mean, what will be the catalyst?  Earnings season is over, oil is going up, geopolitical instability remains, the yen carry trade hasnt yet fully unwinded, etc.  So erasing the 4% decline by end of week (ie tomorrow) is a bet that I would put my whole portfolio against if I could.

The catalyst is that there was no legitimate catalyst for the downswing in the first place.  Once people realize that (and I think it is happening) our little bull run will continue. 

Hmm, I see your point, though that still is unlikely to cause a rally back to original levels by end of tomorrow.  Next week, maybe.  Still, while a full on rally is possible, but I dont think we can say there was no legitimate catalyst in the first place.  The market was overdue for a correction which was a catalyst in itself to the downside.

Gotta admit I am in new territory here, but I just think its premature to call it either way.  What I will continue to believe is that we are in a correction until a follow through day happens.  If it does, the shorts I have will torch me pretty bad, but I will have learned a lesson.  If it doesnt and we keep going down, I will make money, fairly straightforward.

[nullzero]

David, I have a feeling that the market is going to end positive today and maybe even erase the 4% or so decline by the end of the week.  In fact, SP just went green as I write this.  At what point would you have to change your mind and become a bull again?

...Personally, I dont see it happening, I mean, what will be the catalyst?  Earnings season is over, oil is going up, geopolitical instability remains, the yen carry trade hasnt yet fully unwinded, etc.  So erasing the 4% decline by end of week (ie tomorrow) is a bet that I would put my whole portfolio against if I could.

The catalyst is that there was no legitimate catalyst for the downswing in the first place.  Once people realize that (and I think it is happening) our little bull run will continue. 

Yes there was a good catalyst the market was way overbought since the lows in the summer of 06. The market is still over bought even with the nasty hair cut. The next 6 months dont seem to rosesy for the economy anyway you look at it. All this buyout action propelling the stock market to new highs the last few months is mostly done on high leverage borrowing. Add in the fact that the global market boom was fueled by borrowing from Japan using the Yen and investing in other places. This yen carry trade may cause huge problems, watch the yen closely it may show where the global markets are going if the Yen spikes up more then we can be in for a world of pain across the global markets.

[David Randolph]

Market turned green, tough to be a bear today considering the V bottom rally 

Not for me Tokyopua.

You see, I've been bear in the Dax from about 7,000 until 2,400 in the 2000 - 2003 period. Do you know how many "V bottoms" happened during that time?

I don't know either, but I can assure you there were many, especially near the top.

You can and will naturally think: "but I could have sold my QID with a 4% profit and buy back now at the same price I bought".

Yes, you could, but if one goes that path, 6 months from now the market would have made a 30% move and one could lose money even if he's right on the market.

I know how you feel ... I felt that way too 6 or 7 years ago. I also feel you're on the right path. Keep up and thanks for your post.

[ravenquork]

David, I have a feeling that the market is going to end positive today and maybe even erase the 4% or so decline by the end of the week.  In fact, SP just went green as I write this.  At what point would you have to change your mind and become a bull again?

...Personally, I dont see it happening, I mean, what will be the catalyst?  Earnings season is over, oil is going up, geopolitical instability remains, the yen carry trade hasnt yet fully unwinded, etc.  So erasing the 4% decline by end of week (ie tomorrow) is a bet that I would put my whole portfolio against if I could.

The catalyst is that there was no legitimate catalyst for the downswing in the first place.  Once people realize that (and I think it is happening) our little bull run will continue. 

Yes there was a good catalyst the market was way overbought since the lows in the summer of 06. The market is still over bought even with the nasty hair cut. The next 6 months dont seem to rosesy for the economy anyway you look at it. All this buyout action propelling the stock market to new highs the last few months is mostly done on high leverage borrowing.

There is a good case for a correction, maybe continuing for a while, but I remain uncertain and somewhat doubtful yet as to wether or not this is a full blown bear market. I have gone to 40% cash. One of the stocks I sold sent up 18% today.  

[David Randolph]

The catalyst is that there was no legitimate catalyst for the downswing in the first place.  Once people realize that (and I think it is happening) our little bull run will continue.

There never is. Or tell me, do you expect a recession to start and then the market goes down? Would a terrorist attack be a legitimate catalyst? (not for me).

What was the catalyst for the bear market that started in January 14th, 2000? What were the news on that month, or in February, that could lead to such a huge sell off?

There were none. The reasons came after.

[metrom129]

DSTI  On Fire!   I will be requesting this tomorrow