Historically the summer rally is the weakest rally of all seasons. We saw this yesterday as the bears took back over, and the market went right to our first Dow projected bottom at 11,413.00.
The September590P was profitable right to highs of 16.50, for top profits. The new September550P recommendation was available for quick 1.00 per contract profits.
8/15 – August expiration day, Dow up 4 in a row, down 10 of 13 prior to recent bullishness
Aug. 8 (Bloomberg) -- A year after central banks started to pump trillions of dollars into the financial system to end a seizure in credit markets caused by subprime mortgages, cash is about as tight as it's ever been.
The U.S. market for commercial paper, or short-term IOUs, backed by assets such as mortgages has shrunk 40 percent from its peak in July 2007. The amount borrowed in pounds between banks in the U.K. fell by 70 percent in June from a record in February 2007. The European Central Bank received $100 billion of bids for the $25 billion it offered to financial institutions on July 29, the most since the sales began in December.
Efforts by the Federal Reserve, ECB and Swiss National Bank to shore up the world's biggest banks and promote lending have had limited success. TheLondon interbank offered rate, the basis for at least $150 trillion of financial products, is within 0.06 percent of the highest since November 1999 compared with the Fed's benchmark interest rate. The largest financial companies have lost almost $500 billion from subprime-linked securities.
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In true tasteless behavior McCain has a web ad that accuses Obama of being the Antichrist. Reported last week in the Wall Street Journal I read with clear understanding that the Republicans are now moving to the FEAR tactic that led Bush to victory in the last election, and the use of religion to twist information. Nicknaming Obama "The One" McCain tries to minimize him, emphasize that he (McCain) is the true one protecting us from evil, and tries to characterize Obama as the Antichrist.
This has been already been circulating for months in Bible Study groups in towns like Chillicothe, Oh where congregates compare his remarks and biography with verses from the Bible.
I for one am frightened with this thinking, and the behavior of a Presidential candidate in making use of fervor and fear.
No matter who you vote for, PLEASE, don't let fear, intimidation, or "good vs. evil" and the end of the world religious opinions enter a political decision. Barack Obama is not the antiChrist :) Get a grip on reality.
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Now, for the good news: the USD is making a comeback.
And, the bad news: the USD is making a comeback.
The dollar has cracked its 200 day moving average against the EURO for the first time in two Bushian years. And, if it persists, the U.S. consumer will have more buying power, inflation could ease, and the idiots at the FED might then be less itchy to raise interest rates.
But, in our naivety, the negatives of the gain are not yet considered: the weaker dollar has made U.S. Goods cheaper and thus more attractive to buyers overseas, which has shrunk our trade deficit.
U.S. exporters have gained with the weak Bushian dollar, despite a 37^ decline against major trading partners.
The rising dollar will also affect our imports, how we truly fuel our economy, and prices will rise, as from oil's transport cost, and the USD.
Both of these scenarios can short term affect corporate earnings, the fuel of our economy.
And, if investors were truly snatching up USD's because they saw an economic boom coming, it would be a good sign.
They are not. None of this, longer term, bodes well for the U.S. exports or the profits of multinationals. Economist Steven Wieting says it well, " You can't repatriate profits at a favorable exchange rate if you don't earn them in the first place".
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