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Wednesday, December 10, 2008

AIG Sucks Another $10 Billion Into The Vortex

Here's an ominous bearish chart pattern developing. It's the Dollar index, 10 days, 15 minutes, and it's why oil is up and the market is rallying.

Sometimes the Yahoo Finance Homepage can be a surreal experience. Among the bad news, Rio Tinto cutting 14000 jobs, and Office Depot closing stores. The auto bailout, now reduced to $15 billion, is being recieved as good news. Then this item, down near the bottom. AIG needs another $10 billion. They'll get it, and they won't be humiliated on C-Span.

Energy and Basic Materials are again asserting leadership, which you would expect with a falling dollar. Financials, conmsumer staples, and health care are lagging. I have on breakout so fat, MBB. New highs so far are about the same as we have been seeing: LZR, OCN, INT,CSKI, HEV, and DCM. On the earnings sheet, GEF reported this morning and is up about 5%.


Anonymous said...

Hey David,
Good to speak to you again. Ive been looking at the idea of shorting the treasuries. From what I heard, this is the next bubble as people are flying to safety. But as we pile on more debt, there is a likelyhood that the US debt will seem unsustainable, there fore the repayment of all those T notes looking iffy without printing money. ( I make reference to what the UN economic analysts have said) So Im thinking of buying some long term puts on one of the treasuries. What do you think? Which ETFs should I look at. Ive heard you mention the ntn, tnx.
Here a prediction. By looking at the weekly Chart. I think well retrace to about 10,000 or so ( thats the first FIB retracement), in a few month, then well get a pile of bad new that will apply for the next yearor well get some disaster in the dollar with Obamas spending plans, and then the market will get discounted to below 6500.

David said...

Hi Eddie,

There are a few ETFs that track treasuries, the only one I can recall off the top of my head is TLT. I'll look them up and do a post on them today.

I agree with your prediction. I'm not suree how high we will go, but I do believe we will get a rally that lasts at least into January, then we head down again and hit new lows.

Anonymous said...

Thanks in advance

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