Tuesday, February 12, 2008

02.12.08 - Buffet to Reinsure

This is absolutely huge news (Buffet). Put that on top of the possible begginings of a deal seeking environment (MSFT/YHOO), economic stimulus (rebates + lower rates) and this could be strong fuel on what remains an oversold market.

By the same token, I am posting early because there was a dearth of oversold stock buy signals today, and this often correlates to a short-term top/lull. Watch the first hour very closely. It may be a good day to minimally consider partial hedges for long positions until we see how this plays out. It has been a while since the market has experienced a sustainable trend, and until the mortgage insurers bite, there may be a tendency to sell this news. To paraphrase Buffet, his offers aren't an exercise in altruism. Cautious optimism is the tone, in brief.

12:40PM CST UPDATE: Cumulative Tick is positive, but vacillating and in a mild negative slope. Financials are really pulling the day, as one would expect. Let's see if we can get a second wind going into the close. Tough call just now -- it may be temptating for some to fade into the close, but I believe we are exiting that type of environment. It would certainly be very bullish to not see this type of action.

2:50PM CST UPDATE: And so it goes. Looks like the original intuition was the correct one. Still, with the exception of the NASDAQ 100 (rebuffed after a period of relative strength by the 20-day MA) and Transports, we have thus far held the gap. Now for AMAT... looks good.

No comments: