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61421-61440 of 69565
The Trend is your friend and the trend is down.
China owns 376 billion worth of fannie and freddy debt.
Russian owns 21% of that debt.
Altogether foreigners own 1.3 trillion of fannie and freddy debt.
Read Bill Bonner in daily reckoning
dailyreckoning.com:%201.webloc
STI is likely to gap up on Monday, as a result of overestimation of Citigroup's potential losses. It underperformed HSI which actually closed pretty bullish.
2857 likely the opening price; break above this level is bullish. May attempt to test the levels 2887, 2917 if prognosis of the markets remain bullish.
Key supports 2850, 2830; failure to stay above 2830 likely to lead to test of 2819 and 2802.
Caveat emptor.
TA-wise, Dow is in an uptrend mode currently. Plus, Citigroup's performance was above expectations for an already depressed market.
This round I didn't rely so much on Fibo, but looked more at levels of interest in the Dow to index options holders (normally figures ending with multiples of 100). Also, oil broke some key supports ($135, 132.50, even $130) as a result of expectations for Fed interest rate increases coming soon (USDyen up, oil and gold drop).
And also note SEC is not allowing the mkt players to hold short positions without scrips soon (If I remember correctly it's from 21 Jul onwards), so that's also partly why we keep seeing buying pressure to cover shorts.
With these in mind, I decided 11500 as the likely peak to factor in bullish position closures by funds before the weekend. 11300 as the potential initial downside due to the adverse reports by Merrill Lynch and the potential profit taking effect on Fri after 2 straight days of 200+ pt gains; Microsoft and Google's lousy reports affects NASDAQ index more as it's the index for the tech sector.
Note I temporarily departed from my proprietary index projection techniques for this case because of some fundamental (but possibly temporary) changes to the US market.
hondastream ( Date: 19-Jul-2008 10:22) Posted:
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hi cwquah, how do you gauge the dj index would be in the range of 11300 to 11500?
thru. fibo??
DJ continues to run up for the past two days with a pretty good result, just wonder why STI still dropping... sigh.... Will STI rebound on
monday ? will DJ continues its rally tonite ? lets see on monday.....
some good news. ... over the week end. now is all till the market close.
and keeping finger cross for monday asia market. to have a good start for
the week. s
macro economic... !!!!!! exchange rate. interest rate. ...
Might offset potential losses on Dow a bit. Expected range 11300-11500.
Citi Posts Smaller-Than-Estimated Loss on Writedown (Update1)
By Josh Fineman and Bradley Keoun
July 18 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, reported a smaller loss than analysts estimated after about $7.2 billion of credit-market writedowns.
Citigroup rose in New York trading after the bank said its second-quarter net loss was $2.5 billion, or 54 cents a share, compared with earnings of $6.23 billion, or $1.24, a year earlier. Analysts estimated the loss would be $3.67 billion, according to a Bloomberg survey.
Citigroup's report follows surprisingly strong profits from JPMorgan Chase & Co. and Wells Fargo & Co., and disappointing results from Merrill Lynch & Co. Citigroup Chief Executive Officer Vikram Pandit, who took over in December, has raised $44 billion of capital and outlined plans to reduce assets by $400 billion over the next two to three years.
``The worst news is out,'' said Malcolm Polley, chief investment officer of Milwaukee-based Stewart Capital Advisors LLC, which manages more than a $1 billion, including Citigroup shares. ``I don't think it's going to get worse. It may not get better for a while.''
Credit Suisse Group analyst Susan Roth Katzke had predicted the company would have as much as $10 billion of writedowns in a June 24 note. Shares of the company rose to $18.56 in New York trading, from $17.97 at the close on the New York Stock Exchange yesterday.
Second-quarter revenue dropped 29 percent to $18.7 billion, compared with the average estimate of $17.3 billion among analysts surveyed by Bloomberg.
Consumer Banking
The U.S. consumer unit, which includes retail banking and loans to individuals and small businesses, had revenue of $7.89 billion, virtually unchanged from a year earlier. The global cards business rose 3 percent to $5.47 billion.
Revenue at Citigroup's corporate and investment bank plunged 71 percent to $2.94 billion.
Pandit, 51, put former Morgan Stanley colleague John Havens in charge of trading and investment banking, moved U.S. consumer head Steve Freiberg to head a new credit-card division and recruited former Wells Fargo executive Terri Dial to oversee consumer banking in the U.S.
He also is taking steps to free up capital by selling assets. Under Prince, Citigroup's balance sheet swelled by $689 billion, an amount larger than the entire balance sheet of Wells Fargo, the fifth-biggest U.S. bank. Total assets stood at $2.2 trillion at the end of last year.
Prince Era
Citigroup slumped 39 percent this year through yesterday, reaching the lowest point since the bank was created a decade ago from the merger of Citicorp and Travelers Group Inc. The decline led to the ouster of former CEO Charles O. Prince as credit- market losses piled up and Citigroup's market value fell below those of Bank of America Corp. and JPMorgan. New York-based JPMorgan reported second-quarter earnings yesterday of $2 billion. Wells Fargo's profit was $1.75 billion.
``We will continue to have substantial additional marks on our subprime exposure this quarter,'' Chief Financial Officer Gary Crittenden said on a conference call last month.
Citigroup also wrote down the value of so-called monoline insurance companies including Ambac Financial Group Inc. after they were stripped of their AAA credit ratings.
``All of the over $300 billion in capital raises worldwide have plugged holes,'' Oppenheimer & Co. analyst Meredith Whitney said in a Bloomberg Television interview earlier this week. ``They haven't funded new equity growth. You plug these holes and you are still in the same situation where you started off.''
Dividend Speculation
The bank slashed the quarterly dividend by 41 percent in January to 32 cents a share, the first drop since the early 1990s. Analysts including Whitney have said the bank may have to cut the dividend again to bolster capital as losses escalate.
Pandit said in May that Citigroup will shed ``legacy assets,'' including real estate holdings and collateralized debt obligations, such as bonds backed by pools of subprime mortgages.
Citigroup also plans to cut $15 billion in costs in the next two to three years, while aiming for revenue growth of 9 percent, Pandit said.
The bank said in January it would eliminate about 4,000 jobs in the securities division, and said two months later that the number had increased by about 2,000. Citigroup said in April it would slash 7,000 jobs outside the investment banking group over the next year, and executives have said further reductions are likely.
Citigroup agreed to sell its German consumer banking unit to France's Credit Mutuel Group last week for 4.9 billion euros ($7.7 billion).
To contact the reporters on this story: Josh Fineman in New York at jfineman@bloomberg.net; Bradley Keoun in New York at bkeoun@bloomberg.net. Last Updated: July 18, 2008 06:51 EDT
here we go; why our market's down today.
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Earnings set to weigh on stocks
Wall Street set for sharp fall after Merrill posts hefty loss. Google, Microsoft fall short of analysts' estimates. Focus turns to Citigroup.LONDON (CNNMoney.com) -- U.S. stock futures tumbled early Friday as investors digested disappointing earnings from Merrill Lynch, Google and Microsoft and braced for results from financial giant Citigroup.
At 5:05 a.m. ET, Nasdaq and S&P futures were sharply lower, with a comparison to fair value suggesting opening losses for Wall Street.
Stocks rallied for a second straight session Thursday, supported by a hefty decline in oil prices. Solid results from JPMorgan Chase also helped bank shares climb.
Financials But the financial sector may have trouble holding on to those gains after Merrill Lynch (MER, Fortune 500) reported a wider-than-expected loss of $4.9 billion after the market close Wednesday.
Investors will be focused on quarterly results from Dow component Citigroup (C, Fortune 500), which is due to report before the opening bell Friday. The financial services giant is expected to post a big loss.
Techs A number of tech titans posted results late Wednesday that came in short of estimates.
Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) both missed Wall Street's expectations, although IBM (IBM, Fortune 500) topped estimates.
Freddie Mac In major corporate news, Freddie Mac (FRE, Fortune 500) is considering a plan to raise new capital by selling up to $10 billion in new shares, according to a report in the Wall Street Journal.
Energy Oil prices rebounded after sliding for the past three sessions. In electronic trading, crude futures climbed above $130 a barrel.
Other markets Stocks in Asia erased early gains. Major European markets fell in morning trading.
i think we should ban shorting in the local market. this way, there will be less volatility, and less cowboy action. worser for the local BBs, but better for retailers.
unfortunately, ours isn't quite a place that protects the small fries.
Apparently the shorting is still permitted for market makers... from bloomberg:
SEC Poised to Exempt Market-Makers From `Naked-Short' Sale Ban
July 18 (Bloomberg) -- The U.S. Securities and Exchange Commission is poised to exempt market makers in stocks from an emergency rule aimed at preventing manipulation in shares of Fannie Mae, Freddie Mac and 17 Wall Street firms.
The agency's staff, after conference calls to discuss the rule that limits the ability of traders to use abusive tactics when betting on a drop in share prices, agreed to requests by exchanges and brokerages to modify the terms. Exchange officials had told regulators that without an exemption, market makers responsible for pairing off investor orders will struggle to keep transactions flowing and may raise costs for investors.
``The staff is recommending exceptions to the short-sale order for market makers of the 19 stocks and their derivatives from arranging to borrow in advance for short sales in their market-making and related hedging activities, to avoid constraining the market makers' provision of liquidity,'' SEC spokesman John Nester said in an e-mail from Washington. The full commission may vote as soon as today.
SEC Commissioner Christopher Cox, who announced the order July 15, is seeking to make it harder for traders to illegally drive down stocks of the two mortgage buyers and Wall Street firms and prevent another collapse like Bear Stearns Cos. The rule takes effect July 21.
Investors will be required to borrow stock that they plan to sell short as a bet on a decline in prices. Prior to the order, which applies to shares of Fannie Mae, Freddie Mac and 17 brokerages, investors were only required to locate shares that they had reason to believe were available for borrowing.
Options Exchanges
Options exchanges asked the SEC to ease the restriction for market makers, who rely on quickly shorting stocks to hedge their trades, said three people familiar with the matter who declined to be identified. Market makers must quote bids to buy and offers to sell contacts on their assigned stocks.
``Without a market-maker exemption, I could see this having a profoundly negative impact on the liquidity that would be provided in stock and derivatives,'' said Steve Sosnick, an equity risk manager in Greenwich, Connecticut, for Timber Hill LLC, one of the largest options market makers in the U.S. ``The SEC has to be very careful not to craft a rule that has undesirable impacts on liquidity in various sectors of the marketplace.''
In a short sale, an investor borrows and then sells the shares in anticipation of a price decline. If the trade works as planned, the investor is able to buy back the stock at a lower cost and return the shares to the lender, pocketing the difference as profit.
`Naked' Short Sales
Traders are sometimes unable to actually borrow the shares and complete a ``naked short-sale.'' If the loaned shares are never repaid, investors can sell more shares short than legally allowed and put pressure on a stocks' price.
Freddie Mac and Fannie Mae shares, the two largest mortgage lenders in the U.S., and Lehman Brothers Holdings Inc., the No. 4 securities firm, have lost more than 70 percent of their market value this year. Citigroup Inc., the largest bank by assets, has lost 43 percent; Merrill Lynch & Co., the No. 3 securities firm by market value, has lost 39 percent.
``They are certainly on the political hot seat, but this is their response and you have to give them the benefit of the doubt for the time being,'' Bill Brodsky, chairman of the Chicago Board Options Exchange, the largest U.S. options market, said in an interview July 16. ``I'm hopeful that it won't be that bad. Right now it's limited both on scope and timeframe and we'll continue to work with the SEC.''
Costs Rise
Options market makers engage in short selling to reduce the risk they assume when pairing off customer orders. Forcing them to pre-borrow the shorted shares could make it harder for them to trade, making it more expensive for investors, said Peter Bottini, a former CBOE market maker.
``The cost for customers to trade these products could go up dramatically,'' said Bottini, who is now executive vice president of Chicago-based online brokerage OptionsXpress Holdings Inc. ``Our customers are going to have a tougher time taking a bearish stance in these companies.''
To contact the reporter on this story: Edgar Ortega in New York at ebarrales@bloomberg.net.
Last Updated: July 18, 2008 00:01 EDT
OneSharer ( Date: 18-Jul-2008 17:11) Posted:
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Thanks Cathy for yr enlightenment. Almost thot they alredi moved here in the late morning.
When I first heard about SEC dealing w/ manipulators, I was hoping its counterpart here would do similar.
Afterall, squeezing the golden goose 'til collapse will not do anybody good.
But of course, the mkt is more complicated than I can imagine.
cathylmg ( Date: 18-Jul-2008 10:57) Posted:
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A bad rating for bear talk in the forum means that bulls have not given up.
When bear talk gets good rating it means that the recession is almost over.
In a bear market good news is interpreted as bad and bad news causes panic.
It is a useful sentiment indicator -to keep in your scrapbook.
DO RE MI does rhyme with SO DO MI but they are as different as bull vs bear
Inestment tools .com dow theory has a strange looking creature neither bull nor bear- could be a singaporean
giving directions to a tourist?
www.investmenttools.com:equities:dow_theory%201.htm.webloc
Still sore about that?
If you like, I'll be happy to give you a "good post"...,no matter bearish/bullish posting,
as long as you agree to leave out the nonchalant attitude toward stroke. Deal? 
SupremeA ( Date: 18-Jul-2008 14:16) Posted:
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newmoon ( Date: 18-Jul-2008 14:10) Posted:
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No one loves a bear market.
We live in HOPE and DENIAL even when fundamentals point the other way.We cling to straws when drowning in losses and try to get even with mister market.
In the bear phase supports are readily broken even in an oversold market .
Post a bearish article and you get a bad rating.
oil price drop , mean demand for energy drop. but what is the relationship ???cannot really figure
???