Monday, September 29, 2008

MON. SEP. 29- The New King Of Banking

Sometimes, a deal can be really really good. On paper, this certainly seems to be the case with JP Morgan (JPM). For $1.9 billion, they received access to all of the deposits at Washington Mutual. As of June 30, the bank had deposits of almost $200billion; amidst a quiet bank run, about 10% of this was withdrawn in the last two weeks bringing the bank below its key capital requirement ratios. Yet, for a measly sum, JPM acquired the access to all of this capital and simply wrote off all of the bad debt. This of course is phenomenal for JPM should the banking system work out as they now have deposits to loan out, a mortgage business via Countrywide, and a brokerage arm via Bear Stearns. However, it also did something else- it staved off a Great Depression. We are well aware how that it sounds, but stick with us. The FDIC has less than $50 billion in funds. Washington Mutual has tremendous amounts of bad debt. So, if depositors went to get their money out, the loans much more than offset the deposits. And suddenly the FDIC has no money (although the government would merely turn on the printing presses to fix that one in all likelihood). And then people rush to Washington Mutual. And then the media gets involved. And then people go to other banks to take their money out. And suddenly, there is no banking system. That is how close we were to the precipice on Thursday night and it is also why for the first time in its history, JP Morgan announced a major deal on a Thursday rather than a Monday. As it is, there is a major credit lock-up; dry bulk ships cannot leave ports right now because they cannot receive funding to go as they have no access to their credit lines. So, if everything turns out OK, JPM will be the go-to bank and if not, you know, it just won’t matter. As for day trading, realize the good and bad dichotomy will continue and intensify as the system is cleaned out no matter how this deal turns out.

Overnight, markets were hit very hard throughout the world with Hong Kong down 4% and markets throughout Europe down 3% across the board. The perception is that Europe and Asia are not joining the fight with the U.S. plus ‘the deal’ is not going to solve much of anything in its compromised state. Thus, stocks will open sharply lower state-side. With no monies forthcoming imminently from the government coffers and a Jewish holiday tomorrow, it could be a very scary day today.

Reiterating-If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 based on direction of the market unless specified



Good-

C, WFC- trying to take over WB…would be good for company if they get same sort of deal JPM got with WM.

MNI- avoided a default notice by refinancing; stock should be higher else short thru unch

RZ- strong all day Friday

IDEV- up on strong good news..would love an A-B_A2 pattern near Friday’s high at which point it is a buy thru that 3.80 high

CCOW- exploded on a short squeeze late Friday afternoon

BAC,WFC- had huge buy imbalances on close; if they open unchanged, they are actually sharply lower from 3:59PM on Friday and would buy a weak open if market rallies
Bad-

WB-discussing a deal of some sort with C…if deal goes through, will probably be take-under and if deal does not go through, bank needs capital so not good either

AGU- crushed after downgrade; looking for bounce with other stocks in industry else short thru Friday’s low of 63.30

SVNT- poor drug news; looking to short thru Friday’s 15.66 low

GNW, FED- among others, these got destroyed on Friday…cannot short them so they are worth watching and even an A-B_A2 to upside if they open higher and hold unchanged

TRA- down in sympathy with AGU in similar downgrade

SDA- chicken producer ravaged on Friday; looking for a short thru 9 on a down A-B_A2 pattern if it sets up

MON SEP 29 BEF

CALM ? ? ? ?

SCS .22/866M .25/886M .89/3.44B .97/3.46B

WAG .45/14.69B .51/15.35B 2.18/59.12B 2.45/64.74B

MON SEP 29 AFT

CMGI ?/270M ?/297M ?/1.11B ?/1.21B


Good luck today.

www.protradingnetwork.com

1 Comments:

At October 1, 2008 7:02 PM , Blogger ProTrading Network said...

(Oct 01-09:56) JoeD: bk nice call
(Oct 01-09:57) ekolodny2: may try again ntrs
(Oct 01-09:58) ekolodny2: got me again. in 72, out 71.92
(Oct 01-09:59) ekolodny2: stil lfestering fury that I missed AGM
(Oct 01-10:00) gregh: mkt big leg down
(Oct 01-10:00) KSwan: oil big leg up
(Oct 01-10:00) ekolodny2: MA/V at lwos...canot short V
(Oct 01-10:01) ekolodny2: missed MA
(Oct 01-10:01) coach has joined.
(Oct 01-10:01) ekolodny2: MA just broke 1 1/2
(Oct 01-10:04) KSwan: oils stocks got crushed
(Oct 01-10:05) TomM has joined.
(Oct 01-10:05) ray has joined.
(Oct 01-10:05) JoeD: ntrs
(Oct 01-10:08) KSwan: good call, ntrs
(Oct 01-10:10) KSwan: POT getting slammed
(Oct 01-10:10) ekolodny2: got it that time...3rd time charm.
(Oct 01-10:11) ekolodny2: HK maybe 20
(Oct 01-10:11) gregh: loved NTRS, couldnt pull trigger with market where it is
(Oct 01-10:11) jimb: SAME HERE
(Oct 01-10:11) whoop: .and here.
(Oct 01-10:11) KSwan: It seemed too thin for me
(Oct 01-10:12) KSwan: JPM hod
(Oct 01-10:13) ekolodny2: it is muc hdeeper than that, guys. if JPM, C, BAC, WFC all at/near highs of dau, why shouldn't NTRS do the same? Same industry
(Oct 01-10:14) jimb: WFC was tanking when NTRS went wasnt it?
(Oct 01-10:15) KSwan: For me, it's the .10 (at least) spread in the quote. When you're wrong and it goes against you, it can feel very scary because your out becomes so far away.
(Oct 01-10:16) JerryC has left.
(Oct 01-10:16) JerryC has joined.
(Oct 01-10:17) gregh: hk closer. thin
(Oct 01-10:19) KSwan: BK again?
(Oct 01-10:19) KSwan: went up a little too quickly, I think.
(Oct 01-10:22) KSwan: Oil numbers in about 10 minutes
(Oct 01-10:23) ekolodny2: MGM thru new low if LVS goesto new low
(Oct 01-10:23) JerryC has left.
(Oct 01-10:23) JerryC has joined.
(Oct 01-10:25) ekolodny2: AGAIn, LVS NOT shortable
(Oct 01-10:28) ekolodny2: shroted MGM 78, out half 55, balance 40
(Oct 01-10:29) bruce: JPM hod
(Oct 01-10:30) ray: WFC hod
(Oct 01-10:32) JoeD: cah hod?
(Oct 01-10:33) JoeD: nuan hod?
(Oct 01-10:34) JoeD: oil numbers
(Oct 01-10:35) ekolodny2: OIL HIT
(Oct 01-10:37) JoeD: kbe hod
(Oct 01-10:40) JoeD: stp unch
(Oct 01-10:40) AlisherM has joined.
(Oct 01-10:41) JoeD: hsy 40.50?
(Oct 01-10:41) ekolodny2: oil throttled...consequence of shrot selling rule...major banks near hod...but hedgies have to shrot something
(Oct 01-10:42) whoop: coal stocks crushed again
(Oct 01-10:44) ekolodny2: maybe RRI
(Oct 01-10:46) ekolodny2: no to RRI...was 6.75 when I typed it
(Oct 01-10:47) ekolodny2: AAPL lod...not tradingit at this point, but monitoring
(Oct 01-10:49) KSwan: ACI?
(Oct 01-10:51) ekolodny2: shoted AAPl 108, out 107.80 avg..on verge of getting back into rapid-fire trading mode
(Oct 01-10:51) KSwan: missed CSIQ thru unch
(Oct 01-10:55) ekolodny2: if you do ANY of this stuff, i.e. AAPL, ACI, et al and it does nto go your way, get out. Or you will lose your day in any rally. Very quick rapid-fire envitonment
(Oct 01-10:55) KSwan: WFC nearing hod again
(Oct 01-10:56) ekolodny2: all banks strong
(Oct 01-11:02) beverly has left.
(Oct 01-11:09) ray: ACI approaching lod
(Oct 01-11:19) gregh: bk big leg up near unch
(Oct 01-11:19) ekolodny2: insurance stocks continue to be belted...may be down due to worries to exposure to the LEH, WM, of the world? PRU, TRV, HIG, CB all down
(Oct 01-11:21) gregh: ZION taking off as well
(Oct 01-11:24) gregh: JPM through. tried and missed
(Oct 01-11:25) whoop: C starting to stag at 22
(Oct 01-11:28) gregh: STI off to the races as well
(Oct 01-11:29) AlisherM has left.
(Oct 01-11:31) ekolodny2: ALD 01 maybe
(Oct 01-11:38) ChatAdmin has left.
(Oct 01-11:39) gregh: serious reloader bac
(Oct 01-11:42) ekolodny2: BAC 37 padding on, but QUICK out if keeps relaoding
(Oct 01-11:42) JoeD has left.
(Oct 01-11:43) gregh: NTRS!?
(Oct 01-11:43) whoop: yes BK went right thru - no stag at all
(Oct 01-11:43) MichaelM has left.
(Oct 01-11:43) MichaelM has joined.
(Oct 01-11:44) whoop: yet
(Oct 01-11:44) ekolodny2: missed BK...tried buying a LOT...totally utterly missed
(Oct 01-11:44) gregh: STI leading the way
(Oct 01-11:46) ekolodny2: REALLY like the ALD 01...VERY thin
(Oct 01-11:58) ekolodny2: bought ALD huge 01...out of 2/3 of it 10/12/13...keeping rest for now...may buy more 25
(Oct 01-11:58) ekolodny2: missed BAC
(Oct 01-12:00) ekolodny2: out more 11
(Oct 01-12:01) ekolodny2: just will not launch
(Oct 01-12:03) ekolodny2: out of rest 11
(Oct 01-12:03) ekolodny2: just won't go
(Oct 01-12:03) ekolodny2: cnanot chance it now with financials selling off a little
(Oct 01-12:04) ekolodny2: had all variables in place, bad news, good tech pattern, market rallying, thought at least 20 cents (and maybe a point) there...made a dime on good size, but another broken dream
(Oct 01-12:06) KSwan has left.
(Oct 01-12:06) gregh: ALD above 20. big offer 25
(Oct 01-12:18) ekolodny2: taking quick walk...nto a good feeling ALD right now in my stomach and taking a few minutes so I don't do somethuing stupid
(Oct 01-12:23) ekolodny2: COF if mkt rallies
(Oct 01-12:24) ekolodny2: missed
(Oct 01-12:32) gregh: JPM figure maybe
(Oct 01-12:34) wally has left.
(Oct 01-12:39) MichaelM has left.
(Oct 01-12:50) ray: HK moved a lot but at hod
(Oct 01-12:54) ekolodny2: JPM was widowmaker. Bought 02's, got to 08. Fell 30 cents or so while market rallied. In a blink. Boight a little more 83. Sold 49.01 average
(Oct 01-12:55) gregh: ditto. was able to get off half at 95 when it first failed. avg 89
(Oct 01-12:57) ekolodny2: can AIG go thru 4 and then g o20 cents?
(Oct 01-12:57) ekolodny2: Probably not
(Oct 01-12:57) ekolodny2: thinking
(Oct 01-13:10) ChatAdmin has joined.
(Oct 01-13:15) Gregb has joined.
(Oct 01-13:23) ekolodny2: wow...in time, CALM 90
(Oct 01-13:40) gregh has left.
(Oct 01-13:44) ekolodny2: makret EXPLODING HIGHER
(Oct 01-13:45) bruce: ge news
(Oct 01-13:45) ekolodny2: RIGHT
(Oct 01-13:45) ekolodny2: warrne buffett ge
(Oct 01-13:45) bruce: exactly
(Oct 01-13:49) jimb: did GE stop trading?
(Oct 01-14:07) tims has left.
(Oct 01-14:08) jimb: that was a nice pop
(Oct 01-14:21) tims has joined.
(Oct 01-14:21) tims has left.
(Oct 01-14:25) jimb has left.
(Oct 01-14:26) tims has joined.
(Oct 01-14:31) ekolodny2: CNBC NOW
(Oct 01-14:38) coach: gs tests hod
(Oct 01-14:46) whoop: MI..may be setting up..not sure of reward..
(Oct 01-14:49) whoop: missed MI..bad judgement here...
(Oct 01-15:03) ChatAdmin has left.
(Oct 01-15:05) ekolodny2: in time, RRI
(Oct 01-15:07) whoop: RRI thru 6.50 if/when..?
(Oct 01-15:07) ekolodny2: want it to sagnate some in here...may not need it...look what it did yesterday
(Oct 01-15:08) whoop: was actually looking at stocks - did not even see Eriks post..same thoughts here
(Oct 01-15:12) whoop: tried it....didn't work..yet
(Oct 01-15:14) ekolodny2: in 50, out 51.
(Oct 01-15:14) whoop: in .50, out .53 avg
(Oct 01-15:25) ekolodny2: can one make 20 cent in HTZ?
(Oct 01-15:26) ekolodny2: look on daily/look on 5
(Oct 01-15:26) whoop: MON lod is 7 HTZ
(Oct 01-15:30) gregh has joined.
(Oct 01-15:36) ekolodny2: SLM, AEL, LXP, RAx all on/near lows...none shortable
(Oct 01-15:43) ekolodny2: AA 875600 to buy, NCC 19577900 to buy (NOT SHORTABLE), PFE 655900 to sell, UGI 639600 to sell, HRH 441600 to sell
(Oct 01-15:44) ekolodny2: BLUD/MOS/MU after-hour earnings
(Oct 01-15:46) TomM has left.
(Oct 01-15:46) whoop: wow...HTZ....will remember that one...good idea
(Oct 01-15:47) EASTSIDE has left.
(Oct 01-15:53) pags has left.
(Oct 01-15:58) ekolodny2: NCC dow nto 8.8 mil to buy...UGI 300K to sell; eveyrthing else nto really of consequence
(Oct 01-15:59) ray has left.
(Oct 01-16:02) coach has left.
(Oct 01-16:02) jmac2066 has left.
(Oct 01-16:02) ekolodny2: USI went the OTHER way
(Oct 01-16:02) ekolodny2: free money...but the OTHER way
(Oct 01-16:04) bruce has left.
(Oct 01-16:05) gregh has left.
(Oct 01-16:06) whoop: CNW cutting '08 guidance....
(Oct 01-16:09) whoop: CW also lowering '08 guidance
(Oct 01-16:10) tims has left.
(Oct 01-16:10) whoop: g'night all
(Oct 01-16:11) whoop has left.
(Oct 01-16:18) ekolodny2: NCC rallied...weird
(Oct 01-16:23) ekolodny2: SMSC horrid warning
(Oct 01-16:29) KSwan has joined.
(Oct 01-16:57) RalphW has left.
(Oct 01-17:18) MitchG has left.
(Oct 01-17:24) ekolodny2: MOS ravaged
(Oct 01-17:31) ekolodny2 has left.
(Oct 01-17:37) KSwan has left.
(Oct 01-18:46) JerryC has left.


www.CambridgeTrader.com
www.protradingnetwork.com

 

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