Thursday, January 27, 2011

Thursday Links (AAPL, GOOG)

Social Mood

  • Foreign governments are starting to topple and emerging markets are crashing. These are signs of darkening social mood throughout the world. As I mentioned last night, there is a divergence in markets and in sentiment between the U.S. and the rest of the world. I do not expect this divergence to last long - ultimately the U.S. and the rest of the world are tightly coupled, as 2008 demonstrated. [Some thoughts on Egypt.]
Sentiment
  • Bullish Sentiment Above 50% For Eleventh Straight Week. The last time bullish sentiment was above 50% for eleven or more weeks was in the spring of 2007.
  • Again, I am still very bearish and I believe that the declines in emerging markets (and China!) will be leading indicators. Still, it is best to wait until you have an advantage and then press it.
Tech

8 comments:

Eric said...

I think "crashing" is overstated. Just a little. At least so far.

CP said...

Egyptian market was down 10% today and down 21% ytd. That is a crash.

Earlier this month Bangladesh dropped 9% in an hour. They have had various exchange closures too, always a terrible sign.

AMZN down 10% after hours - back to sudden slumps for the high flyers.

Eric said...

AMZN down 10% after hours...

After hours action is not always all that meaningful.

Anyway, I will be looking to sell volatility on AMZN tomorrow then, but only for attractive premiums at attractive stikes. Because everyone I know buys at AMZN, and they buy more and a greater variety of things there all the time. So any fall for AMZN tomorrow will attract buyers...at some point.

What happens on Monday -- after people have had a weekend to think things over -- will be more interesting to me. One reason: how a shortfall at AMZN may be projected onto brick and mortar stores. Especially considering the (once again) weak jobless claims report.

CP said...

I am a very satisfied AMZN customer as well.

I could see AMZN doing well versus NFLX, i.e. a pair trade. You would be fading the recent earnings reactions.

By the way, I would like to see greater accountability among the commentariat. So, shall we put you down as just short AMZN puts, or short a strangle?

Eric said...

I will try to judiciuosly short puts tomorrow. Like I said: for the right premium at the right strike I will be a seller.

But I may end up doing nothing.

CP said...

Hmm.. well be sure to let us know

getyourselfconnected said...

Option talk makes me dizzy....

whydibuy said...

Hey, I was wondering. Does this latest gdp of 3.2 % qualify for end of the world status?? LOL.

You bears crack me up. Nothing good ever happens in the economy, does it?

Anyways, back in the bomb bunker, bears. You better wait untill gdp growth hits 20% before its safe to come out, LOL.