Wednesday, September 17, 2008

Where's The Money Coming From?

We've just bailed out another institution, AIG. 85 billion dollars. Eventually this will result in the government holding an 80% stake in AIG. Public companies becoming government companies, scary. The impact of these bailouts will be hard to see until a few more years down the road, after we're out of the recession. But, what do we know, perhaps these bailouts are actually necessary to save us, but at what cost?

Now, to the markets! I gladly took the opportunity given in this early morning's gap down to exit my puts. Not only did the SPY break the 120 intra-day, it gapped way down to open at 117. But, as the charts show, the markets closed significantly positive relative to the start of the day. The breakdown of the 120 support of the SPY failed it seems, and with this AIG news, we'll likely rally for a couple days off this apparent "double bottom" of the July low.

Will likely try to unload some of my LDK calls that will expire in 3 days and depending on how strong this rally is, maybe start building SPY puts on Friday. We're still in a bear market, any rallies are short lived and should be used as opportunities to exit long positions and stay in cash, or go short- depending on how gutsy you are.

And on a sidenote, fall quarter will be starting soon, so I will be back to being a full-time student, part-time blogger. My blogs will definitely drop off in frequency, and likely return to politics for the run-up to the November elections. Furthermore, since to me it's a lot easier to blog about politics than analyzing technical patterns and reading all the details of what actually is happening in these bailouts and coming up with a conclusion, my stock blogs will probably drop off as well. Probably just some short ones on stocks may appear, but likely for my own interest as a pseudo history-log of what my thinking was.

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