Monday, December 14, 2009

Market Timing Swing Position Update

Long from 1091 at the close of Wednesday,Dec 9 ( See previous post )

Target filled today at 1012 for 21 pts profits. Market Timing Strategy works again !
Long 117-18 , 30 yr T-Bonds Futures ZBH10
Financial Press Overview:
News of yet another bailout greeted US investors this morning and led to early bullishness on Wall Street. Overnight, Abu Dhabi agreed to bail out neighboring Dubai (in connection with Dubai World's $60 billion debt problem) to the tune of $10 billion, thereby increasing risk appetite and precipitating a move away from the safe-haven US dollar. This appears to be yet another instance where a problem created by large-scale risk-taking gone awry is 'cleaned up' by the government. The move also spares the Emirates Federation from the humiliation of a potential Dubai World default.
Predictably, the Dubai news boosted markets around the world, with Dubai's main index itself up more than 10%. On Wall Street, the news boosted the S&P 500 and the Dow to new closing highs for the year. However, such problems may continue to crop up around the globe. Case in point, Greece's prime minister announced today that the country was drowning in debt and that he would therefore implement a slew of spending cuts and new taxes. The country's Prime Minister was quoted as saying that 'Greece faces the risk of sinking under its debt....[the country] has lost every trace of credibility'. Other European countries with significant debt issues are Ireland, Spain, and Portugal.
The Dow did not perform as well today as the other major indexes; this can be directly attributed to Exxon Mobil, one of its key components. Exxon's stock lost more than 4% in today's session after the world's largest oil company announced that it would acquire natural gas (and oil) player XTO Energy for $29 billion in an all-stock deal. This deal is one of the largest in the US energy sector in about four years and also represents Exxon's largest acquisition since the company purchased Mobil Corporation in 1999. Analysts say the acquisition is crucial as it will allow Exxon Mobil to become more involved in the natural gas sector, a sector that may see a boost due to coming climate change / global warming regulations.
In other notable corporate news, Citigroup today announced that it was close to forging a deal which would allow it to repay $20 billion in TARP ( = Troubled Asset Relief Program) funds. The company, which received $45 billion of TARP funds last year (and currently still owes $20 billion), is expected to launch a $10 billion common stock offering. In recent months, several US banks that had received bailout money from the US government have repaid these loans, including Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley. Citigroup and Wells Fargo are two of the remaining large players that have yet to make this move.

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