UK Stockmarket 2009 and beyond

sabretoothtigger

Selling a put means you went long right, so now you're a bit bearish. I think the market is in a bit of a wile coyote moment and just hanging in the air

but on the other hand suspension of disbelief has gotten us this far so who knows. I know a few people going short at this level and it looks fairly obvious with a straight line right across the recent move

WORLD FOREX: Dollar Gains Broadly On Brightening FOMC Tone
By Bradley Davis
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The dollar gained broadly Wednesday after the Federal Reserve painted a slightly rosier picture of the U.S. economy. The dollar also was bolstered by a day of positive economic data, leading investors to place bets the Fed could increase key interest rates sooner than previously thought.

The Federal Open Market Committee on Wednesday released minutes from its late January meeting that expressed confidence a U.S. economic recovery was gaining traction and noted debate among members on the details of eventually bringing monetary policy back to normal.
"Overall, the Fed minutes were in line with further signs of stabilization and could be seen as a signal that broader monetary policy normalization may come sooner than expected," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.
Ultralow U.S. interest rates, intended to stimulate the economy, weigh on the low-yielding dollar.

After the afternoon release of the minutes, the dollar raced to intraday highs against the euro, yen and U.K. pound, before retracing slightly.
Wednesday afternoon, the euro was at $1.3600 from $1.3772 late Tuesday, according to EBS via CQG. The dollar was at Y91.07 from Y90.11, while the euro was at Y123.83 from Y124.08. The U.K. pound was at $1.5679 from $1.5787. The dollar was at CHF1.0787 from CHF1.0660.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.468 from 79.630.

The minutes noted China's recent fiscal tightening could have helped boost the dollar.
When China, which has a voracious appetite for commodities that feed its massive expansion, puts the brakes on economic growth, its policies reverberate to emerging markets, as well as to commodity-linked currencies, such as the Australian dollar, said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.

"When you get indications of the removal of liquidity by major central banks, it tends to damp markets," sending equity and commodity prices down, and leading investors to turn to the dollar, he said.

Earlier, the dollar gained after data showed U.S. housing starts in January climbed to the strongest level since July 2009, while industrial production beat analysts' estimates.
"The data show that the economy will rebound in the U.S. before it does in Europe and Japan," said Sebastien Galy, currency strategist at BNP Paribas in New York. Based on those stronger U.S. economic data, "the market is also making a bet that the Fed will tighten [monetary] policy before the [central banks] in Europe and Japan."



-By Bradley Davis, Dow Jones Newswires; 212-416-2654;
bradley.davis@dowjones.com
(Fabio Alves and Michael S. Derby contributed to this article.)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=hfofof5MTg8ZCUch2XFPrg%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
February 17, 2010 14:36 ET (19:36 GMT)

Going on my cable correlation theory, its failed in its recent breakout which confirms a more bearish tone for me personally

tradetime

Selling a put means you went long right, so now you a bit bearish. I think the market in a bit of a wille coyote moment and just hanging in the air

Hmmn, it's kind of, but not really, if you go long on a stock as you know you can only make money if it goes up, if you sell out of the money puts, you can make a limited amount of money (the premium) whether it goes up, stays the same or goes down, as long as it doesn't cross the strike by more than the premium..
Selling a put is like reserving a long at a lower price and getting paid for it, March $30 SSO would have obligated me to buy SSO @ $30 if they were in the money and exercised, stock was trading in the low $35's at the time, by my guesstimation it would have required about a 7% drop in the SPX to put them in the money, from about 1070, I didn't see that happening before I could cover for a profit as I was expecting a bounce, but didn't want to commit money to the stock, it's just another tool in the box.

You can make "synthetic" trades using options, normally it would be on the short side where for some reason you can't short the stock, in that case you would buy a put, and sell a call at the same strike, same expiry, that would be a synthetic short and would perform the same as shorting the stock, but as you see it requires two options.

I remain modestly bearish to neutral until we can cross 1115

tradetime

I know a few people going short at this level and it looks fairly obvious with a straight line right across the recent move

1100 - 1105 is short term resistance, I couldn't fault anyone going short into it, did so myself but only got a few points, risk is low with your stop nearby, we look tired here, but it's a tricky market on the short side, I like to be nimble on the short side in this market..

sabretoothtigger

tradetime wrote: »

Not sure what difference it would make really. TEF I can see trades on the NYSE, TNE5 trades on a whole range of European exchanges, If you have access to all those exchanges I'd say trade it on the one with the most liquidity.

I might just buy it in euros to balance out other shares I hold in dollars, its a European company anyway but with some nice international emerging market exposure I think

Seems like a buy to me, a bit like or even more so actually then VOD was at 110p

Just saw them mentioned here

Credit rallied far ahead of stocks last year, creating the chance of a "equity carry trade". Dividend yields on Telefonica are 8.2pc while yields on the company's five-year debt are 3.8pc, comparable to Spanish state debt. Likewise for France Telecom at 8.5pc against 3.3pc.

http://www.telegraph.co.uk/finance/economics/7251901/Credit-markets-flash-hottest-warning-signal-since-crisis.html

Better to be in shares then bonds I reckon though this is apparently not the conventional wisdom in volatile times



Remember a couple of share rights issues from last Summer, PTEC and REX. Both have done well, PTEC was an amazing buy at 280 for whoever got that, 490p now very impressive in the middle of this malaise.
Ive noticed this with a couple of gambling stocks actually though igg dropped back now


REX I did actually buy and sold much of it (neglected a buy order with ptec unfortunately), held a bit to see what happens with the div.
Also doing well it seems, no mention of asian operations in this report though, I thought they had some growth potential there but I cant remember now

February 18, 2010
Look at the whole package for Rexam’s true value


Graham Chipchase, the newly installed chief executive of Rexam, has managed to keep a lid on the packaging company’s substantial debt pile, but investors are still proving wary.
Yesterday’s results led to fresh falls in the shares to 277p. Profits before tax were down 13 per cent to £285 million in the year to December 31 and several of Rexam’s key markets remain in decline.
This recession has proven beyond doubt that Rexam’s success is intrinsically linked to consumer confidence and that even a relatively staid packaging business can be hit by the downturn. Indeed, seemingly innocuous things can have an effect: there has also been a long-term trend, particularly in the United States, of consumers switching from bottled water to tap water — not good if you make the bottle-tops on all those bottles.
Moving into higher-margin products, such as mascara wands and fragrance packaging, may have seemed like a good idea before the recession, but it has made the business less counter-cyclical. Manufacturing capacity in Europe was increased in 2007, just as demand started to ebb away.



Buying Rostar, the Russian beverage canning company, for $297 million in 2008 also looks like a mistake, in hindsight, because Russia has caused Rexam more problems than anywhere else. The market there has plunged as consumers switch back to local drinks in glass bottles. An increased tax on beer could also affect sales.
Yet despite Rexam’s considerable woes, the overall story looks less grim than it did about the time of the company’s £350 million rights issue last summer. Group sales rose by 5 per cent to almost £4.9 billion last year, although this figure was helped by the weakness of sterling. This does not necessarily mean that the company’s situation will worsen significantly if the pound rediscovers some strength — 75 per cent of the group’s £1.8 billion debt is in dollars, and the rest is in euros. Focus on working capital and cash-generation should help to reduce debt further this year.
Management has also taken action on the company’s overheads, with a reduction of 2,300 jobs — about 10 per cent of the workforce — expected to take place by the end of 2010.
Rexam’s core canning business stabilised in the final months of 2009, with European can volumes flat year-on-year in the last three months of 2009 after high single-digit declines in the first nine months.
The sales decline in North America improved to minus 2 per cent in the fourth quarter, a figure in line with long-term trends.
The cherry is the expectation that Rexam will increase its dividend from 8p this year to 12p.
If you’ve already bought in to the story, hold on for the recovery.

Cable holds onto the lows since 5th Feb. I expect it to continue to do so till usa opens and then we'll see how it goes though I expect it to have limited upside and ultimately fall and fail this level - thats still to come.
The case for silver is analogues to this but silver represents a better hedge to me then holding cash

tradetime

The media continues to gnaw at Goldman Sachs' "financial innovation" in getting Greece into the Euro. It is somewhat unfortunate for Greece that they happened to choose the bank that was to become the world's arch villain, even if the story itself was unworthy of constant coverage, the fact that Goldman is in it will keep it prominent. I wonder how long it will be before the media gets round to speculating on how many other Euro members may have cooked their books to get in.

On a subject closer to home, UK just sported a budget deficit for January, when a surplus was expected, this country is in at least as big a mess as anywhere in Europe, we just don't know it yet.


Yes I continue to like Silver and will add on any weakness. It is my view if you can buy below $15, it will likely double in the next 2 years.

ses6jwg

Closed my first successful spreadbet today to bank a mini-profit of £52 should have covered the small losses I made when I first dabbaled, its been a learning curve!

AMINEX and GKP updates out today... market likes the AEX one and the fact that COVE just struck oil in the same basin as Likonde in Tanzania.

Not so keen on GKP update.

I've been in and out of GKP since 32p but not liking the opaque nature of the company and management so may move elsewhere.

MrMajic

tradetime wrote: »

The media continues to gnaw at Goldman Sachs' "financial innovation" in getting Greece into the Euro. It is somewhat unfortunate for Greece that they happened to choose the bank that was to become the world's arch villain, even if the story itself was unworthy of constant coverage, the fact that Goldman is in it will keep it prominent. I wonder how long it will be before the media gets round to speculating on how many other Euro members may have cooked their books to get in.

On a subject closer to home, UK just sported a budget deficit for January, when a surplus was expected, this country is in at least as big a mess as anywhere in Europe, we just don't know it yet.


Yes I continue to like Silver and will add on any weakness. It is my view if you can buy below $15, it will likely double in the next 2 years.

Basic question here, but can I ask which stock you're watching/buying as silver? Would this be a stock or part of a fund? THanks.

tradetime

MrMajic wrote: »

Basic question here, but can I ask which stock you're watching/buying as silver? Would this be a stock or part of a fund? THanks.

I use an American ETF ticker symbol SLV. trades on the NYSE

Similar products are also available on the LSE from the ETF Securities stable.

MrMajic

tradetime wrote: »

I use an American ETF ticker symbol SLV. trades on the NYSE

Similar products are also available on the LSE from the ETF Securities stable.

Thanks, I'll have a look.

JonnyBravo

tradetime wrote: »

Hmmn, it's kind of, but not really, if you go long on a stock as you know you can only make money if it goes up, if you sell out of the money puts, you can make a limited amount of money (the premium) whether it goes up, stays the same or goes down, as long as it doesn't cross the strike by more than the premium..
Selling a put is like reserving a long at a lower price and getting paid for it, March $30 SSO would have obligated me to buy SSO @ $30 if they were in the money and exercised, stock was trading in the low $35's at the time, by my guesstimation it would have required about a 7% drop in the SPX to put them in the money, from about 1070, I didn't see that happening before I could cover for a profit as I was expecting a bounce, but didn't want to commit money to the stock, it's just another tool in the box.

You can make "synthetic" trades using options, normally it would be on the short side where for some reason you can't short the stock, in that case you would buy a put, and sell a call at the same strike, same expiry, that would be a synthetic short and would perform the same as shorting the stock, but as you see it requires two options.

I remain modestly bearish to neutral until we can cross 1115

:think:

I've thanked you for this but have to confess I'm completely lost. It is stuff like this that makes me realise how naive I still am at this.
I buy shares and hope they go up then I sell them. End of plan.

Thanks for your ongoing education of us all though ( I suspect it's not only me..... God I HOPE it's not only me!!!!)
:laugh: