Thursday, May 08, 2008


I have had my eye on this. A stock market mini-meltdown: is it here ... as in right now? Exhale.

How blind can we be?

The Hiroshima and Nagasaki of modern credit securities finance (going by the names of Fannie Mae and AIG) have detonated this week. Shouldn't we by all right be getting ready for the show?

NOTE TO MARIA BARTOROMO: That $3 trill on the sidelines is there for a reason, girl. (Here, we call it, "soon-to-be melt-up money.")

I have written about complacency referencing weak NYSE Composite volume. How can we not see the cultural complacency in the face of such GIANT bad news at the core of American finance?

Fannie Mae and AIG? Dick Vitale says, "That's China Syndrome, baby."

At least to that shaky little thing called confidence... particularly when there's money involved.

Is it time for the much anticipated mini-meltdown?

I say, Get Ready. It might just be January.


I'll just let the lines speak for themselves. For all you intellectual types: other than a slap in the face, they're meaningless ... at least to me ... but I think not to everybody ... so after I help make you a ton of money ... maybe go see if there are some interesting statistical tidbits you can share here ... and even if they suck I'll help you make more money.


Forget about the "rising wedge" I have mentioned a couple times since last Friday (5.2.08). What we gots here is an irregular flat. Go ahead, laugh. The Royal Society laughed at Leibniz, too.

I was just looking today at the week options expired in January, 2008. On Monday, January 14th the S&P 100 closed at 663.48. By Friday's expiration on the 18th — after just four full days of trading — the OEX went out the January contract at 620.43. That's six and a half percent ... in four days ... options expiration week ... when time value is dirt cheap.

A potentially dangerous trap! (And that is why they throw a January, 2008 Fort Knox at you... to suck you in.)

So, here we are. Next Friday (5.16.08) is May expiration. Will we see a repeat of January? Could this even be worse?

You bet it could.

OEX 5-min

I see barely a comeback today ... after a rather surprising sharp decline yesterday ... with RSI now balanced. Yesterday's mid-day price-RSI collapse apparently had a little sting, eh? It sure looks that way.

So, let's see. Tomorrow we might have an a.m. AIG gassing, followed by some sideline cash looking for a home in this stalwart (a la FNM a couple days ago) — because the worst of the credit crisis is behind us, right? — ... and then we strike.

This will be huge ... if my eye serves me right.

The bridge on the River Kwai has exploded!

Here comes the choo choo...

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