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Trend reversal


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After over a month of being long, I sold and went short only to spot the remaining XLNX longs for over a few grand by the end of the day (I closed the long this morning at 26.35 and shortly thereafter opened the short at 26.28).

So now I am again fully into the question, "What does it take to bring this thing down?" or, "Will it stay irrational longer than I can stay solvent?"

Stay tuned. . .

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This is my take on today's action. As they caned the gold contract into the ground they were bidding for the equities. Put the miners on weekly charts and you'll get a clearer picture on where the gold bugs indices are headed.

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I think the market may not fall dramatically until everyone is tired of watching it and gaming it daily. That may take awhile, long enough to wear out the options players on both sides.

that era is over i believe! :P Miners held nicely today with the weakness in gold...

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Anybody read Fleck's column tonight? I'd like to post part of it but I don't know what the rules are concerning that. (I queried RealMoney about that and got zero response).

 

Anyhow, in a nutshell Fleck cites one of his old school bond trading buddies who calls for rates on the 10-year @ 6% by december. He says institiutions can't get out because wall street isn't bidding. LTCM is going to look like a hiccup by comparison.

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Art Crashin' on Crapvision just now said he's looking for the MoGauge next Wednesday. Sez that re-fi apps are down from 10,000 in the last week of May to 4,000 in the last week of July. A 60% drop! :o

 

"The consumer has been tapping his house for money to keep the economy going and that looks like it's drying up."

 

Is he a lurker? :D

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If rates on the 10 year go to 6% by December of this year....

 

Well, I doubt it.

why doubt it? who's going to buy all that paper? even if the treasuries don't get to 6%, mortgages are determined by agency paper anyway. Whenever treasuries find their footing, I think agencies are just going to keep on sliding. That will have a lot of people all messed up on their portfolios, just like LTCM. And with a slowing consumer, the foreign CB's won't have as much paper to recycle, = less demand for US fixed income securities.

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