Going Short

[LuckyStrike]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

[undgrd]

GS sold 40%+ of their BP position weeks before this mess...wonder if they just want to buy back in at a better price?

[Sparky]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.

[LuckyStrike]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


This was several weeks ago and I heard that if they are charged 4300 per barrel the total could be 60 billion, which would only be a higher number now.

I think it is very likely that they will be taken over by another company and it will be the end to BP as we know it.

Plus I think there are less volatile dividend plays in the sector.

[osoab]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


This was several weeks ago and I heard that if they are charged 4300 per barrel the total could be 60 billion, which would only be a higher number now.

I think it is very likely that they will be taken over by another company and it will be the end to BP as we know it.

Plus I think there are less volatile dividend plays in the sector.


IF BP is taken over, would you short the GBP? BP is England's cash cow.

[Spectrism]

BP is dropping nicely. And yes... I have puts on BP.

[Spectrism]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


They are not paying dividends for the next 4 quarters- guaranteed. After that, will be questionable too. What is their PE ratio when the earnings are 0? The debts, law suits, bad name, and hurting economies will NOT make BP price go up rapidly. I am still holding my puts (got 26 now) with a short-term target of 25... expecting this to go down to 20-22 by mid July. There may be some temporary turn-arounds. Gotta watch it close.

If the "relief" wells fail, this disaster will see a BP bankruptcy. If the relief wells work and this mess is sealed up, the continued cleanup will be hundreds of billions of dollars if they are held accountable to keep doing it. I can foresee major health problems from Texas to Florida. Add in destroyed businesses and we are in excess of $1trillion costs.

[Sparky]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


They are not paying dividends for the next 4 quarters- guaranteed. After that, will be questionable too. What is their PE ratio when the earnings are 0? The debts, law suits, bad name, and hurting economies will NOT make BP price go up rapidly. I am still holding my puts (got 26 now) with a short-term target of 25... expecting this to go down to 20-22 by mid July. There may be some temporary turn-arounds. Gotta watch it close.

If the "relief" wells fail, this disaster will see a BP bankruptcy. If the relief wells work and this mess is sealed up, the continued cleanup will be hundreds of billions of dollars if they are held accountable to keep doing it. I can foresee major health problems from Texas to Florida. Add in destroyed businesses and we are in excess of $1trillion costs.

I bought at $29 and sold at $32, making 10% in about 15 minutes.

I think BP will be a buy again at $25-$26.

[PatColo]

could short Case-Shiller real estate futures, Miami market due for yet another down leg. Give it through hurricane season, TPTB wanna make FL uninhabitable.

otherwise, you could go long orange juice?

[Spectrism]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


They are not paying dividends for the next 4 quarters- guaranteed. After that, will be questionable too. What is their PE ratio when the earnings are 0? The debts, law suits, bad name, and hurting economies will NOT make BP price go up rapidly. I am still holding my puts (got 26 now) with a short-term target of 25... expecting this to go down to 20-22 by mid July. There may be some temporary turn-arounds. Gotta watch it close.

If the "relief" wells fail, this disaster will see a BP bankruptcy. If the relief wells work and this mess is sealed up, the continued cleanup will be hundreds of billions of dollars if they are held accountable to keep doing it. I can foresee major health problems from Texas to Florida. Add in destroyed businesses and we are in excess of $1trillion costs.

I bought at $29 and sold at $32, making 10% in about 15 minutes.

I think BP will be a buy again at $25-$26.



You got VERY lucky. Going long BP is a very risky game. At any moment we could hear about the next degradation in this oil disaster. The odds favor things worsening. If anyone buys this stock, have tight stop-losses.

[SQUEXX]

I've been reading some Clive Maund articles about shorting the market with Bear ETF's. He generally doesn't like ETF's, as they are an elaborate scam. But, he says, there are some that are good for juicing up your portfolio if you have the cash an stomach. Basically, he says that non-leveraged (1x) bear funds like BearX are the safest, but also the most pedestrian in performance. ETF's like FAZ are prone to evaporate due to the nature of their makeup.

But the one's he recommended as less likely to evaporate are as follows: BZQ, DOG, DUG, DXD, EEV, HSD, QID, SKF, SDS, SH, SMN, TWM, TZA and XSL. I already have a few $K in BearX. But, I'm considering SMN (Ultra Short Basic Market Materials). If the market does suddenly go south, basic materials will be one of the first things hit. The other I'm looking at is TWM (Ultra Short Russell 200).

I'd like to see what other comments on Clive's recommendations are.

[Sparky]

I've been reading some Clive Maund articles about shorting the market with Bear ETF's. He generally doesn't like ETF's, as they are an elaborate scam. But, he says, there are some that are good for juicing up your portfolio if you have the cash an stomach. Basically, he says that non-leveraged (1x) bear funds like BearX are the safest, but also the most pedestrian in performance. ETF's like FAZ are prone to evaporate due to the nature of their makeup.

But the one's he recommended as less likely to evaporate are as follows: BZQ, DOG, DUG, DXD, EEV, HSD, QID, SKF, SDS, SH, SMN, TWM, TZA and XSL. I already have a few $K in BearX. But, I'm considering SMN (Ultra Short Basic Market Materials). If the market does suddenly go south, basic materials will be one of the first things hit. The other I'm looking at is TWM (Ultra Short Russell 200).

I'd like to see what other comments on Clive's recommendations are.

Unfortunately my leveraged ETF tutorial on GIM1 is gone...

I've played many on your list. The old standby is SDS, which is double short the entire S&P.

Their "evaporation" doesn't have to do with their "makeup". It's straight math. If something goes from 100 to 110, then back to 100, it's 2x leveraged ETF would go up 20% (100 to 120) then down 18% (120 to 98). So the underlying item is flat while your 2x ETF has lost money. Repeat that dozens of times over a few months and that's where the evaporation comes from. FAZ is 3x, so the effect is accelerated more quickly. In the long run, all leveraged ETFs are headed to zero; they periodically do reverse splits to keep that from happening.

With leveraged ETFs, you have to either get in and out quickly, (quickly take a gain, or stop out on a loss) or be willing to repeatedly buy in on losses, which is risky business and requires tremendous discipline and money/risk management, and a sufficiently large bankroll relative to the size of your bets.

[SQUEXX]

"Evaporation" is not a very good word. But I wrote it on the fly as I was about to walk out the door. Can you answer me one question? Say the market is shut down because of a computer system meltdown. Straightforward unleveraged Bear ETF's like GRZZX/BEARX would probably do OK once the market opened. They're not leveraged and (I'm assuming) would price correct upward once the market opened again. But the leveraged ETF's that are (leveraged) 2-3x, are "juiced" with derivatives. What are your opinions about them? What are the odds of an ETF meltdown where the underlying ETF's go belly up? How would that affect the whole market, especially the juiced ETF's?

[LuckyStrike]

"Evaporation" is not a very good word. But I wrote it on the fly as I was about to walk out the door. Can you answer me one question? Say the market is shut down because of a computer system meltdown. Straightforward unleveraged Bear ETF's like GRZZX/BEARX would probably do OK once the market opened. They're not leveraged and (I'm assuming) would price correct upward once the market opened again. But the leveraged ETF's that are (leveraged) 2-3x, are "juiced" with derivatives. What are your opinions about them? What are the odds of an ETF meltdown where the underlying ETF's go belly up? How would that affect the whole market, especially the juiced ETF's?


Leverage is definitely alluring but I nearly got burned on DXO, when oil went from 150 down to 40 it was a no brainer to load up the truck, I thought a 3x long oil ETN was the way to go until it blew up. Thankfully I still got out 15% ahead but had it kept trucking it would've been over 100%. Oh well.

[Sparky]

"Evaporation" is not a very good word. But I wrote it on the fly as I was about to walk out the door. Can you answer me one question? Say the market is shut down because of a computer system meltdown. Straightforward unleveraged Bear ETF's like GRZZX/BEARX would probably do OK once the market opened. They're not leveraged and (I'm assuming) would price correct upward once the market opened again. But the leveraged ETF's that are (leveraged) 2-3x, are "juiced" with derivatives. What are your opinions about them? What are the odds of an ETF meltdown where the underlying ETF's go belly up? How would that affect the whole market, especially the juiced ETF's?


Leverage is definitely alluring but I nearly got burned on DXO, when oil went from 150 down to 40 it was a no brainer to load up the truck, I thought a 3x long oil ETN was the way to go until it blew up. Thankfully I still got out 15% ahead but had it kept trucking it would've been over 100%. Oh well.

Leveraged ETF's punish greed.

[Sparky]

"Evaporation" is not a very good word. But I wrote it on the fly as I was about to walk out the door. Can you answer me one question? Say the market is shut down because of a computer system meltdown. Straightforward unleveraged Bear ETF's like GRZZX/BEARX would probably do OK once the market opened. They're not leveraged and (I'm assuming) would price correct upward once the market opened again. But the leveraged ETF's that are (leveraged) 2-3x, are "juiced" with derivatives. What are your opinions about them? What are the odds of an ETF meltdown where the underlying ETF's go belly up? How would that affect the whole market, especially the juiced ETF's?

Actually, evaporation is a good word; that's really what happens over a long time. Slow evaporation.

Your insurance against a catastrophic computer meltdown is physical PM and cash, and actual stock certificates, I suppose.

If you're going to trade paper, you are accepting the risks of paper. A "computer meltdown" is such an ill-defined event. What does that mean? There are so many backups that everything would have to fail. And if that were to happen, who knows what would be safe? Maybe the SEC would step in and reset all positions in all asset categories to the previous day's price. The whole system is based on trust; if the SEC weren't trusted to do that, then all of it becomes trash.

GRZZX and BEARX are mutual funds, not ETFs. Who knows if they would be "safe"? They profit by shorting equities; what if the computer meltdown made their buyback shares unavailable and they had to default? They don't "adjust upward" like ETFs. They rely on a price drop of the shares that they have borrowed, and the availability of those shares for re-purchase.

If you are playing ETFs, your risk of failure from bad decisions is much larger than your risk from a computer meltdown. They are good for what they are intended for, which is short-medium term trades, i.e. days to weeks.

[SQUEXX]

Your insurance against a catastrophic computer meltdown is physical PM and cash, and actual stock certificates, I suppose.

If you're going to trade paper, you are accepting the risks of paper. A "computer meltdown" is such an ill-defined event. What does that mean? There are so many backups that everything would have to fail. And if that were to happen, who knows what would be safe? Maybe the SEC would step in and reset all positions in all asset categories to the previous day's price. The whole system is based on trust; if the SEC weren't trusted to do that, then all of it becomes trash.

What I mean by computer meltdown is if they have a "super drop" like they did about a month or so ago. When the market suddenly dropped by about 1000 points.........or worse.

GRZZX and BEARX are mutual funds, not ETFs. Who knows if they would be "safe"? They profit by shorting equities; what if the computer meltdown made their buyback shares unavailable and they had to default? They don't "adjust upward" like ETFs. They rely on a price drop of the shares that they have borrowed, and the availability of those shares for re-purchase.

Whoops, my bad! Yes, mutual funds. Long day without much sleep!

If you are playing ETFs, your risk of failure from bad decisions is much larger than your risk from a computer meltdown. They are good for what they are intended for, which is short-medium term trades, i.e. days to weeks.

I'm thinking the next 2-3 months. I think most of us know the crash is coming, it's just a matter of when!

[Sparky]

SQUEXX, if you are referring to the May 6 flash crash...

First, I don't think this was a computer meltdown. The black box trading got to a point where there were no buyers, causing the flash crash. The computers responded exactly as programmed.

But even there, the leveraged ETFs did not suffer catastrophically. They returned to where they were supposed to be.

And for the ETFs and stocks that suffered on the way down, i.e. dropping to $0.01, the SEC stepped in an un-did those trades.

[SQUEXX]

I put $10k into SMN and TWM last night. I did OK. FAZ surprised me, tho. Up 18%, that is definitely an ETF to buy and dump fast!

[SQUEXX]

I put $5k each into SMN and TWM and was up hundreds of $$ last night. I have $2.5k in BEARX and made $9. :'(

[StackerKen]

short the dow tonite

[Sparky]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


They are not paying dividends for the next 4 quarters- guaranteed. After that, will be questionable too. What is their PE ratio when the earnings are 0? The debts, law suits, bad name, and hurting economies will NOT make BP price go up rapidly. I am still holding my puts (got 26 now) with a short-term target of 25... expecting this to go down to 20-22 by mid July. There may be some temporary turn-arounds. Gotta watch it close.

If the "relief" wells fail, this disaster will see a BP bankruptcy. If the relief wells work and this mess is sealed up, the continued cleanup will be hundreds of billions of dollars if they are held accountable to keep doing it. I can foresee major health problems from Texas to Florida. Add in destroyed businesses and we are in excess of $1trillion costs.

I bought at $29 and sold at $32, making 10% in about 15 minutes.

I think BP will be a buy again at $25-$26.


I guess the right number was $26.75. Now trading at $37, up 35% in 2 weeks.

[SQUEXX]

I'm glad the market is up. It will start turning down towards the middle of the month and head down thru the fall. It will start to drop like a rock in October...................I'm betting heavily on it!

[LuckyStrike]

I'm glad the market is up. It will start turning down towards the middle of the month and head down thru the fall. It will start to drop like a rock in October...................I'm betting heavily on it!


Yeah I agree with that time frame as well. Unfortunately the bulk of my money isn't liquid right now but these gyrations make it easier to predict tops and bottoms.

[MNeagle]

I'm glad the market is up. It will start turning down towards the middle of the month and head down thru the fall. It will start to drop like a rock in October...................I'm betting heavily on it!


I bet it will "hold" at least until the elections.

[Book]

I'm thinking the next 2-3 months. I think most of us know the crash is coming, it's just a matter of when!



Like MNeagle posted...right after the election...lol.

:D

[SQUEXX]

I'm glad the market is up. It will start turning down towards the middle of the month and head down thru the fall. It will start to drop like a rock in October...................I'm betting heavily on it!


I bet it will "hold" at least until the elections.


It's not a presidential election (altho I wish it was!!!), so they won't pull out all the stops. I don't think they can throw $TRILLIONS at it like Obongo has over the last 2 years. Look at the Repub's blocking funding for an extension on unemployment benefits. I think the painters are nearing the corner and close to painting themselves into it.

[SQUEXX]

An interesting comment from Jay Taylor of MiningStocks.com:


Of course, holding gold and silver carry more risk than holding cash. And an up market
against FAZ can also be a very risky proposition. Not only is FAZ a triple down strategy, which means that if the market heads up,
you will lose 3 times more than on a straight short against the market, but in my view there is some considerable risk that at some point in the future this derivative itself could default, if the kind of market decline I am anticipating develops. Realizing this risk, folks
like Dr. Robert McHugh, Ian Gordon [b]and others are suggesting shorting the financial stocks is a strategy only for the early stages of
this decline because ultimately these derivative products themselves are likely to become insolvent.


I have a fair amount (for me, anyway) in bear market ETF's but plan on getting out sometime between September and early October. I'd like to short oil, but you never know when the jooz and their US Gov't lackies are finally going to attack Iran and oil will skyrocket.

[Sparky]

An interesting comment from Jay Taylor of MiningStocks.com:


Of course, holding gold and silver carry more risk than holding cash. And an up market
against FAZ can also be a very risky proposition. Not only is FAZ a triple down strategy, which means that if the market heads up,
you will lose 3 times more than on a straight short against the market, but in my view there is some considerable risk that at some point in the future this derivative itself could default, if the kind of market decline I am anticipating develops. Realizing this risk, folks
like Dr. Robert McHugh, Ian Gordon [b]and others are suggesting shorting the financial stocks is a strategy only for the early stages of
this decline because ultimately these derivative products themselves are likely to become insolvent.


I have a fair amount (for me, anyway) in bear market ETF's but plan on getting out sometime between September and early October. I'd like to short oil, but you never know when the jooz and their US Gov't lackies are finally going to attack Iran and oil will skyrocket.


Do you have a link to this quote? I have wondered about the vulnerability of these leveraged ETFs to default, but have not seen an explanation as to how their structure makes them vulnerable.

[SQUEXX]

It's part of his weekly subscription newsletter that has about 30 pages or so. There is no link, but here is the paragraph he talks about FAZ and leveraged ETF's:


As of the close of business on June 30, I held 36.89% of my portfolio in gold and silver mining shares. Except for 0.84% in a medical technology stock (Diagnos) and 0.49% in a coal stock (North American Gem), I held the remaining 61.78% in: cash (28.04%), gold and silver bullion, namely the Central Fund of Canada (16.35%), and bear market strategies (17.39%). The bear market strategies have begun to pay off this past week with the market decline. I hold the Prudent Bear Fund (10.18%) and the Triple Down financial market short, symbol FAZ (7.21%). I view cash, gold and silver bullion, and those two short positions as providing a significant amount of potential buying power if/when gold shares get taken down with the rest of the market.

Of course, holding gold and silver carry more risk than holding cash. And an up market against FAZ can also be a very risky proposition. Not only is FAZ a triple down strategy, which means that if the market heads up, you will lose 3 times more than on a straight short against the market, but in my view there is some considerable risk that at some point in the future this derivative itself could default, if the kind of market decline I am anticipating develops. Realizing this risk, folks like Dr. Robert McHugh, Ian Gordon and others are suggesting shorting the financial stocks is a strategy only for the early stages of this decline because ultimately these derivative products themselves are likely to become insolvent.

[SQUEXX]

Don't get fleeced - get rich: CRASH UPDATE...
July 15th, 2010
Clive Maund

When I was at school in England and about 15 years old I opted to play golf on sports day, in order to get out of playing rugby, and one of my happy memories, apart from using the same sick note forged by a friend about 17 times to get out of sports altogether, is strolling around the golf practice area at school, which happened to be adjacent to a rugby pitch, occasionally whacking a ball idly with a 7 iron while the rugby teams charged around like oxen after an oval shaped ball, play being interrupted occasionally for one of them to be carried off with concussion or a broken ankle or whatever. If this seems like irrelevant rambling bear with me for we are soon going to get to the point.

After taking us through the basics the golf teacher, Mr Furlong, used to drive us to a very good golf course in Bristol, but whatever else he knew, he wasn’t much good at predicting the weather. One afternoon he took us there and it was boiling hot and very humid and hazy. I told him there was going to be a thunderstorm, but he ignored me because I was just a kid so what did I know, and marched us all off a huge distance from the clubhouse to a practice area. The sky grew dark and threatening but no thunder, and I grew exasperated knowing that I was going to get soaked and that we might possibly be struck by lightning, and that he wasn’t going to apologize later for me having to cycle home soaked to the skin. He carried on hitting the silly ball around until there was a massive flash of lightning not more than a mile away and the heavens opened. “I think we’d better go” he said. “Yeah - right” I thought and off we trudged in lashing rain and hail.

I relate this story to you because most market commentators right now are just like that Mr Furlong moments before the storm broke - “Don’t worry, everything is going to be alright, earnings have recovered and companies are paying dividends - the stockmarket has recouped most of its 2008 losses so everything’s back to normal - that drop in 2008 was just an aberration and now everything’s back to normal and its business as usual.” According to our interpretation of the charts if you fall for this spin you are going to get seriously fleeced in short order, and this could also apply to those who listen to the siren calls of those exhorting the virtues of Precious Metals stocks at this time. So let’s make this as clear as possible - if there is another market crash soon as expected, investors are going to do what they always do, which is go into blind panic and toss almost everything overboard, and that can be expected to include gold, silver and PM stocks. Yes, we fully understand that the fiat money system is rapidly approaching its nemesis and that gold is the ultimate safe haven and is set to soar as currencies become worthless, but that won’t help it much short-term during the crash phase, which is likely to result in a heavy reaction in gold back probably to its long-term uptrend support line. Silver will be treated as a base metal and will plunge precipitously as in 2008, which it is now perfectly set up to do. PM stocks will tank and many PM stock investors will be devastated as their cheerleaders slink into the shadows. All of this looks very, very close.

Think I’m joking, or have “lost my marbles”? - it’s time for a little mental exercise then. Take a look at the 2 charts below, one a 2-year chart for the S&P500 index and the other a 3-year chart for the large PM stock XAU index. Having given a Dow Theory bearmarket signal at the turn of the month by dropping to clear new lows, the market has rallied as expected and predicted to alleviate the short-term oversold condition, back up to a target near its falling 50-day moving average. Whilst acknowledging that there is an outside chance of it rising up as far as its January high at about 1150 before turning lower, it looks very close to rolling over to complete the Head-and-Shoulders top shown on the chart, breakdown from which will lead to a severe decline. This rally is therefore regarded as presenting a final chance to get out, and is also viewed as an excellent shorting opportunity. The MINIMUM or rather first downside target is the early 2009 lows below 700, but this time it won’t come back up again, as governments around the world have used up all their options (no pun intended) and blown their credibility to boot. The likes of Bill Gates and Warren Buffett can afford to lose a third or a half of their fortunes on the next plunge like they did the first time round - after all if you are only worth $20 billion compared to $40 billion the year before it doesn’t make much difference to your lifestyle, but most of us can’t afford this kind of complacency. Pensions Funds invested in stocks will be trashed.

Now here’s where you are asked to exert your grey matter a little. Look at these 2 charts, one then the other and ask yourself where you think the XAU index will be if the S&P500 drops to the bottom - or off the bottom of its chart THIS YEAR. Get my point? - it’s not likely to be up is it? The XAU index HAS NOT CONFIRMED GOLD’S BREAKOUT TO NEW HIGHS, NOR HAS SILVER - AND BOTH ARE CLOSE TO FAILING BENEATH MASSIVE RESISTANCE. Watch out for a heavy down day to confirm that the 2008 style crash has started.
http://www.clivemaund.com/charts/spx2year150710.gif
http://www.clivemaund.com/charts/xau3year150710.gif

Remember all those poor fools who froze like bewildered sheep in 2008 and were then summarily fleeced - that doesn’t have to include you, does it?

The great thing is that you can do more than just protect your interests and watch idly from the sidelines as all hell breaks loose, you can position yourself to reap massive profits from bear ETFs and Puts etc, as set out on www.clivemaund.com as the market plunges - we just have to hope that the markets survive long enough for you to cash in your gains.

This article may appear on some public websites.

[Sparky]

Anyone shorting BP? Any other good short plays on the horizon?

My view is that the market will drop at least 50% from current levels and I would like to go short some stocks, to enable me to buy into the babies that get thrown out with the bathwater at the bottom (namely commodities)

I think a good play will be to go long BP when it drops below $30. It might get as low as $26. Their PE is already down to 6. They pay a huge dividend. Even if they have to spend $20B in cleanup and penalties, their gross profit is $65B, on $266B revenue.


They are not paying dividends for the next 4 quarters- guaranteed. After that, will be questionable too. What is their PE ratio when the earnings are 0? The debts, law suits, bad name, and hurting economies will NOT make BP price go up rapidly. I am still holding my puts (got 26 now) with a short-term target of 25... expecting this to go down to 20-22 by mid July. There may be some temporary turn-arounds. Gotta watch it close.

If the "relief" wells fail, this disaster will see a BP bankruptcy. If the relief wells work and this mess is sealed up, the continued cleanup will be hundreds of billions of dollars if they are held accountable to keep doing it. I can foresee major health problems from Texas to Florida. Add in destroyed businesses and we are in excess of $1trillion costs.

I bought at $29 and sold at $32, making 10% in about 15 minutes.

I think BP will be a buy again at $25-$26.



You got VERY lucky. Going long BP is a very risky game. At any moment we could hear about the next degradation in this oil disaster. The odds favor things worsening. If anyone buys this stock, have tight stop-losses.


It looks like the short position was much riskier. Nearly $40, up 50% off the low. Did you get out of your puts in time?

[LuckyStrike]

It looks like the short position was much riskier. Nearly $40, up 50% off the low. Did you get out of your puts in time?


Believe it or not I went thumbs down on Motley Fool Caps on 6/3/10 whenever the stock was 38.92. Today it is ......... 38.92. So I ended my call. Had I had real money in the game I would've probably quit after about 20% down.

[SQUEXX]

MARKETWATCH - is this bounce nearly done?...
July 23rd, 2010
Clive Maund

The markets have rebounded quite sharply this week, with sizeable gains yesterday. Does this action abort or threaten to abort our bearish outlook? The answer to this question is no. There was scope for such a rally as the markets were oversold and right down on "last ditch" support and so this bounce has lifted the markets from the danger zone and bought some time, but not much.

The rally is not expected to carry much further and should be over by early-mid week at the latest, after which things are expected to turn ugly again rapidly.

http://www.clivemaund.com/charts/gold3year230710.gif
Gold and silver staged decidedly modest rallies yesterday, given the extent of the drop in the dollar. Copper was strong for the 3rd day but is now arriving at a zone of strong resistance. Copper looks like it is completing a Head-and-Shoulders bottom on short-term charts, but on longer-term charts a larger Head-and-Shoulders top appears to be completing, so this advance by copper is suspected to be a bull trap. Gold is at a critical juncture here and must hold trendline support and the support above its 200-day moving average to avoid the risk of a deep reaction setting in. On the face of it gold`s uptrend remains intact but a larger bearish Rising Wedge may be completing. A worrying factor for goldbugs is, or should be, that the amount of gold stored in Comex approved facilities has risen to a record 11 million ounces, with a rise of about 2.5 million ounces over the past 2 years alone. Mark Lundeen highlighted this with a chart in his recent article in Gold-Eagle. He does not so so directly, but implies that the gold bullion purchased by ETFs such as GLD may be being routed to the Comex warehouses. If so - and this is Maund's supposition - these increasing reserves can be used to smash the gold price down by the powers that be, which would be kind of ironic, as goldbugs would have the ammunition that they paid for turned on themselves, a typical big money gambit. The silver chart continues to look terrible - if it doesn't break out upside soon it is likely to be smashed, which as you know is our expectation.

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