Just My Opinion 6.29.08

The overall market looks bad and all the news is so bearish. It seems every morning we wake up to something else that some company has been hiding or is coming clean on. CEO's say one thing, two weeks later do another, then two weeks after that, most are gone. There is no trust in most of the financial stocks management. That is with good reason considering what has happened in the last year and until they prove otherwise, that will probably continue. It doesn't matter what most of them say. The public, or financial analyst for that matter, doesn't know what to believe from them.

We are coming up to the end of the quarter and conventional thinking always says that the market gets marked up for the end of the quarter. However, I have seen many large down moves on the last day of a quarter. I don't know what is going to happen this time, but I do believe we are getting close to a tradable bottom, and a washout on the last day of this quarter would be a good opportunity to buy for a trade for the short term. The rallies in this down market could be very large and fast, but I don't believe that they will hold. I am more inclined to be patient and sell large up moves, not on the first day, but a couple days into a rally. There isn't any reason right now for the market to head higher in a meaningful way. So in my opinion, I think we will get a chance to buy a washout some time this week and sell sometime in the next two weeks for a trade. I can see possibly leaning to the short side if the rally is big enough. I am not a short seller at the current levels. Of course, this is all dependent upon no major news events.

Also, the OPEC president said he can see oil at $170 by year's end and blames the FED for that because of the weak dollar. Most thought oil was a sale at $100 and now most think that oil can't go down. I think we are getting close to a large down move in oil, but ideally I would like to see a large up move and reversal in one day. I also believe the Dollar will rally against the Euro. This is more of a longer-term call. The European bank is only concerned with fighting inflation and will probably raise rates at their next meeting. However, they have bigger financial problems that raising rates will ultimately fuel, negating any benefits in their fight against inflation. When this all starts to play out, I believe the Dollar will rally against the Euro. I have no opinion about other currencies.

Stay nimble in this market, admit when you are wrong and take your losses like you take your gains because the market really doesn't care what we think. We want to always have capital to trade the next trade, or day depending upon what we want to do. Make sure that you are allocating funds that you feel comfortable risking. You never want to be forced out of a position before it has time to do what you had thought it would do for you simply because you are uncomfortable with the amount you have at risk at any given time.

One more thing. Barron's had an article about GM and a couple of convertable bonds this weekend. They look very interesting to me. I just wanted to give you a heads up on these and you should do your own homework and investigate these on your own. I am not an expert on convertable bonds and I will be asking questions before I decide if I am going to buy any. SNY

Neither thinkorswim, Inc. nor Scott Snyder, (employee of thinkorswim Advisors dba RED Option) solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.