OptionPundit

Tag: citibank

  • Cut Jobs, Raise Rates, Buy Shares

    A day after Citigroup (C) hit a multi-year low and relaxed below $10, CEO Vikram Pandit’s bought some shares (~>US$8MM) and announced to axe another 10,000 jobs. He also decided to raise rates on credit cards. Weren’t they suppose to lower the rates when FED is even willing to go lower than 1%, hello!!!Sure “they” know something that I don’t?

    Sales fell a larger than expected 2.8% for the month (consensus -2.1%), while Sales less autos declined a larger than expected 2.2% (consensus -1.2%). Doesn’t spell well for the upcoming Christmas Season.

    Freddie Mac lost $25billions, when are they going to stop bleeding money, what a mess! Billions has now no meaning. As Richard Koo mentioned in “Balance Sheet Recession“- “when temptation (or call it greed) wins over reason (call it rationale), disaster will not be very far-off”…and that temptation seems was too much (or too little)..

    Markets sky rocketed yesterday soon after penetrating October lows, many were taken by surprise and sure stop loss orders might have been triggered too adding to the pain, ah! The bounce was quite dramatic. According to Lowry’s, the volume expanded on this retest of Oct lows and the up volume fell short of 90% of up+down volumes. was in deed >90% (they confirmed later their analysis was available, based on prelim indication it wasn’t). The new lows also expanded vs day ago. Let’s see if there is a follow through to this rally.

    Profitable Trading, OP

  • Too Good To be True, But It’s true

    Fed has cut the discount rate by 50 basis points to 1.75%, ECB also cut benchmark rates by 50 basis points from 4.25% to 3.75%; and the futures are up, triple digit (as of this writing). Here is a snapshot of what happened today in the Asian markets so far-

    • Japan’s Nikkei falls 9.4 pct in biggest decline since 1987
    • Hong Kong’s Hang Seng is down 8% inspite of Hong Kong slashing interest rates by a full 100 bps.
    • Singapore’s STI closed down 6.6%
    • India dropped 2.4%
    • China 3.5%

    Let’s see what this latest “rescue” brings to the table. Here is a snapshot of past key posts at OP. I hope these posts were able to add value to your browsing time.

    I am glad we were able to handle the 1st storm of the season. We were in cash and you knew my stand, specially if you were OPN’s subscriber and were following this thread. We are in 100% cash and can ride the bull when it emerges.

    Deflation is a common word these days, but OP mentioned deflation when we were almost in thick of “inflation” fears, commodity prices rising and there was no end at sight.

    Bailout plan, a monster relief and in normal times it could have taken markets to moon, well that’s what really happened but I was suspicious of the rally and 2nd time around when it was almost sured to pass, I also hinted that it maybe “Buy in anticipation and Sell on new”.

    Though I have shared about a lot of “potential bankrupts” since I started sovering subprime in Feb/March of 2007, called out Lehman was potential bankrupt and shared my comments about subsequent rallies.

    I don’t like Citibank and I shared my disappointments and as well as bearishness on Citibank. I am still bearish on Citibank.

    Few months back I had written my technical analysis about the general markets, a simple technical analysis and shared few important support levels (10, 697 for Dow and 1,172 for S&P 500). Once those gone, we should clear the way for bears. And since these two leaders broke those supports these are almost in the free fall.

    Also I warned that there was more pain ahead and I sincerely wanted to be wrong, but unfortunately it turned out to be almost right. Dow is down almost 1500 points since then and tons of money has been poured into the financial systems.

    Besides all these, I also shared Put Diagonal strategy for the down market. If done properly, Put diagonals on DIA or SPY could have multiplied money several times due to record IV gains since then and delta gains due to short in nature.

    And I mentioned my forecast of 8,000 or lower for Dow, also two days ago on the forum. At that time it seemed like a foolish forecast, now it doesn’t see too far. It remains to be seen if it’s it in deed going to happen. I don’t want it to come true. That’s very painful journey.

    I hope these added valuable sights and were worth your time. Pls do share your feedback what do you think of posts here at OP. 

    Preserve capital, OP