Grad Call Notes 9-18-08

In tonights grad call, we stepped back and discussed some of the historic market conditions that we are currently trading in.  To really understand how to trade this market, we need to look at the market in two parts…News and Technicals.

News Aspects:

1.      Fed keep pumping into the banking

2.      Government took over AIG

3.      Fannie and Freddie taken over

4.      LEH collapsed

5.      Commodities weakening…volatile

6.      Regulations:

a.       Banning Short Selling…UK…banned short sales of all financial stocks till January  –

b.      Talking about doing the same thing in the US

c.       Possible legislation allowing for the banks to sell their bad loans to the government. –Print money—inflation.

d.      Moral Hazard: Fairness

e.       Giving FDIC insurance to Money Market accounts…

 

     Has everyone recognized the problems that exist? -this is the major question to answer to determine if the situation has hit rock bottom.

 

 

 

Technical or Market Aspects:

 

1.      VIX

2.      $CPC

3.      $NYHL

An introduction to the above indicators can be found at www.stockcharts.com by doing a search of their site.

Happy Trades,

Jeff