Markets

Is yesterday’s 5% rally sustainable?

August 10, 2011
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Is yesterday’s 5% rally sustainable?

Why was the market up 5% yesterday after the Fed meeting? At first the market sold off 2%. Subsequently, the market came back to unchanged and rallied another 5%. Whoa. Our “green light” to buy worked out, if just for a day. Of course what everyone cares about is what to do going forward. We remain skeptical of a market crash based on something as mundane as a Fed statement on the economy or a Standard & Poor’s statement on the credit worthiness of the US. These are absurd reasons for a market crash though we remain vigilant of real reasons for a market crash. 1) Credit availability and liquidity really drying up across the global economy 2) An actual recession – there have been enough fears of one, and...

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Green Light for a Rally!

August 9, 2011
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Green Light for a Rally!

The markets are completely destabilized and due for a bounce from dramatically oversold conditions. For those investors who are bullish and wish to take the view that the US and global economy will not be in a recession in the next 6-9 months, we advocate buying while the buying is good and other investors are worried about an utter meltdown. Based on the lead-in to today, acknowledging the destabilized market environment, we would see a 2/3 chance of a very strong bounce that gains some momentum when the investing heard gets over the shock of an up-market. Of course there is a solid 1/3 chance that confidence remains completely dashed and we again have another heavy selloff. Why we are leaning towards a bounce… CSFB’s Global Risk Appetite Index...

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“Recession Trade” – Clear by Investor Actions Today

August 8, 2011
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“Recession Trade” – Clear by Investor Actions Today

                 The immediate observation for those watching this macabre sell-off is that stocks are pretty much being sold off based upon how they would be expected to hold-up in a recession, that will presumably be starting within the next 6-months or so. Any stocks that have a very high valuation, are particularly leveraged, are pro-cyclical or are discretionary look out! Stocks in these categories are down indiscriminately, regardless of near-term or current business trends. The market is being forward looking and pricing in a much higher probability of a recession on the horizon. There is no way to prove or dis-prove the recession prediction until more time goes by. Some stocks of note at 3:00PM: Goldman Sachs (GS) – (down 9%) Coach (COH) – (down 11%) Sears (SHLD) –...

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US Sovereign Debt Downgrade

August 7, 2011
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US Sovereign Debt Downgrade

The downgrade of the US sovereign credit rating is sure to cause continued jitters in the financial markets on Monday morning. In actuality, there may be net-positive developments this weekend as it now appears clear that the ECB will engage in buying the debt of Italy and Spain. Drawing a “line-in-the-sand” for Italy and Spain is one of the key elements of halting a financial crisis redux in its tracks. The Standard & Poor’s downgrade of the US sovereign credit rating looks to be timed to create maximum stir and hints at some political motivations. The downgrade was firmly signaled on July 14th when the US was put on credit watch. Standard & Poor’s looked for $4T in spending cuts to be announced in conjunction with the raising of the...

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Pressure on ECB to be decisive Friday morning

August 4, 2011
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Pressure on ECB to be decisive Friday morning

It goes without saying, that the DOW dropping 500 points, and the S&P 500 losing close to 5% will put enormous pressure on Europe tomorrow morning. We will be watching Spanish and Italian bond yields and European stock markets very closely in the wee hours of the morning. The Non-farm payrolls report is a side-show with the real issue near-term being “how to avoid a crisis”.      

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Welcome to Crackerjack Finance

July 29, 2011
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Welcome to Crackerjack Finance

Crackerjack Finance holds the view that superior investment results come from three areas: knowledge, perspective, and disciplined research. After growing weary of financial websites and blogs that either a) regurgitate headlines or b) scratch the surface with quick-and-easy investment recommendations, Crackerjack was conceptualized in order to provide deeper investment analysis with regard to the broad economy, overall markets, sector themes, geopolitical implications, and company/stock research. Crackerjack believes in an open forum where analysis can be exchanged and stand on its own merit. The idea is to create a forum for passionate investors. Crackerjack believes in anonymity so ideas can be evaluated, shared, and debated freely. All investment ideas will either be from Crackerjack’s founders or from outside submissions that are vetted by Crackerjack. Investors are encouraged to take ownership...

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