Friday, April 17, 2009

Taking Stock: For the Short Term

I have been learning how to do short-term trading, with the aid of the now infamous Dan Fitzpatrick and his website,

Making a great trade on Ashland (ASH). I got in at around $13, and am making enough to pay a month of rent.

Chicago Mercatile Exchange (CME) has yet to pan out for me.

Intuitive Surgical (ISRG) is doing nicely, especially today. It seems to be going the same way as Ashland, but maybe that is just wishful thinking.

There seems to be a commonality between multiple stocks, in that they are moving higher in a big way, banging up against their upper bollinger bands. Of course I am not complaining, but only making an observation. The broad market also seems to be inching its' way higher each day, but there are some doubts as to if it will lead to a brand new bull market. I doubt it also. The financials appear to be making steps toward improvement and getting at least somewhat healthier, but apparently they are not lending yet.

I couldn't help but think when I heard the earnings news for Wells Fargo (WFC), "Earnings surprise? How is it a surprise? They were not a part of the sub-prime lending scheme".

I made another interesting observation, in that there is a prominence and popularity amongst the activity in residential housing auctions, like The thing that caught my attention is that the banks have the ability to auction off a considerable portion of the "bad assets" (not necessarily MBS) that they have on their books within a month or so. It isn't necessarily a new idea, but the idea under the current conditions and causes to those conditions makes it noteworthy.

A Thought: Is it worth it?

Anything worthwhile doing is never easy.

Wednesday, April 1, 2009

Taking Stock: Bank Stress

The government stress tests on the banks are going to be done this month, which I am looking forward to. The way I understand it, is that the tests will determine which banks are solvent and which ones are not. Maybe the government will do what Dr. Roubini is suggesting, which is to shut down insolvent banks. The reason Japan had such a long deflationary period is because the zombie banks remained zombies for so long. In other words, they just let them sit there. That's the difference between the U.S. and Japan. If banks are confident that other banks are solvent, then they will begin to lend to each other again, which will get credit flowing again.

I find it somewhat ironic that Roubini is suggesting some improvement in the U.S. economy, considering that Dr. Roubini is normally the epitome of a perma-bear.

My other guides and sources of information tend to agree with Dr. Roubini on the outlook of the economy, so that is more than likely what is going to happen. I'm leaning more toward what the growth of China will be like.