Tuesday, August 12, 2008
Did Deutsche Bank Miss the U.S. Financial Rally, S&P Update, Russia and LDK
Good trend setting Tuesday morning to you! With financials being a very heavy sector in the S&P index, it would bode extremely well for the bulls IF the S&P managed to close up in the face of Deutsche Bank's downgrade of Goldman Sachs (GS). POTC believes the markets are looking healthier post-FOMC on account of a stronger greenback, therefore lower oil. We believe Deutsche Bank's rating change is more political than fundamental, so we won't hold onto our S&P short position IF GS prints $175 or >. We hope this doesn't happen, but we want you to understand the psychology behind managing our S&P trade. The Russian conflict is the scariest post cold war offensive, and POTC, like most experts are bewildered by the situation and a potential solution. A solution looks to rest solely in Putin and Medvedev's hands, and it's difficult to trust those men. POTC feels the conflict could escalate since the U.S. is stretched militarily, and the United Nations ability to negotiate has been less than stellar in past conflicts. Please be aware of the convergence of positive factors since the FOMC meeting: hawkish rhetoric, stronger greenback, lower oil, and higher equity prices. Do you believe all those dynamics will continue… we don't. We alert you to the fact that there is a gap in the 1,250 range in the S&P that occurred last Tuesday, exactly one week ago. We also caution you that the market has been too kind since Friday, so a pullback without any excuse at this point is likely, and IF a fundamental excuse develops, then 1,250 is our target. We are also monitoring LD Solar (LDK)/ADR closely. We will update Wed night on a potential short set up, not yet, as the stock is exhibiting exceptional momentum. *DJ Goldman Sachs Cut To Hold From Buy By Deutsche Bank. (END) Dow Jones Newswires August 12, 2008 00:38 ET (04:38 GMT) Copyright (c) 2008 Dow Jones & Company, Inc.- - 12 38 AM EDT 08-12-08 A great trendy Tuesday to all, we hope you enjoyed the Psychology of this Call.
Posted by The Call Team at 12:14 PM