Technically Directing
Despite the relatively good showing on the market yesterday, I still do not see anything good in the near to medium term future. The Dow is at just under 12,000 before open today, but I believe we’re much more likely to see 11 or even 10,000 before we see 13,000 again.
Technically, I admit defeat because the DOW did make it back to 13,000, if only for a few days. In my heart, though…
I fucking told you so. I hell damn god told you so. Shit.
Also on that day nearly 4 months ago, I mentioned the falling dollar. Today we’re about in the same arena as we were back then as far as the strength of the dollar goes, but we’ve lost more ground against the Euro: they’ve taken a harder stance on interest rates and inflation and their currency has appreciated as a result.
AND on that day I congratulated myself for pinning down National City as “bank most likely to fail”. Well, Indymac failed first (although I doubt I would have thought about that one if you’d given me 6 hours and a blank sheet of paper), but if you bought NCCstock 4 months ago, I doubt you’re really pleased with the result. (You’ve lost 64% of your money as of right now and NCC actually had to release a press statement denying that they were experiencing a bank run yesterday.)
I’d still stay away from NCC. And Fannie Mae (FNM) and Freddie Mac (FRE).
If you’ve gotten into Dryships, and you’re wondering about the wisdom or you’re not sure you can handle the volatility, I say: patience. Wait for it. I wish I could have timed my investments better and jumped in at $68 instead of 85. And 105. And 85. And 85. And 79. And 77. And 68. And 75.
Yet Dryships has STILL outperformed the Dow, NASDAQ, and SP 500 over the last month, last 3 months, and last 6 months. So, you haven’t lost as much money as you could have.
Have faith in DRYS. By the way, the acquisition of Ocean Rig is officially complete, if trivia like that is important.
Where’s the market heading now? I no longer have the deep feeling of gloom that I did four months ago, and even though I questioned my gut feeling as the market rode back up to 13K it never felt right. Bank failures are lagging indicators of the economy. Banks that have failed or will fail were mortally wounded months ago (although a bank run, senator inspired or not, is still the most lethal thing to a bank).
I think we’re near the bottom. Are good times ahead? Let’s not start the party yet. The DOW could still touch 10K, but I think a return to 12 thousand is more likely than 10, and there is still plenty of turmoil ahead.
Kneel before boats,
Rembrandt
