Trade DiaryThe second largest banking failure in US history and only a few lines appear in the Sunday newspapers. This goes to show the level of fear and confusion in the market at present. On Friday we had a free for all as Reuters loaded the market with speculative rumours which turned around the huge losses by Fannie Mae & Freddie Mac before the market close. These were later denied but over the weekend Fannie Mae & Freddie Mac have been granted access to the Treasury credit lines and the Federal Reserve’s Discount Window. A 15 Billion injection is also being mooted.
My Trade
I placed a -2.50 sell spread bet on FTSE futures at 5345 and whilst I’m not too comfortable selling at these lows I am a lot happier selling than buying. This week sees Citigroup, JP Morgan, Merrills and Washington Mutual report which could lead us down but on the flip side eBay, Google, IBM, Intel and Microsoft could lead a tech surge pushing the NASDAQ up.
At present stocks seem to be retracing some of their gains in a similar fashion to the Asian trading day which rallied and then reversed. With all the news ahead it will be interesting to see where we go.
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Now that IndyMac is the first of many banks to fail, I think we’re going to see a lot more banks, not only close for the weekend, but close for good and go bankrupt. Rumors talk about 90+ banks, I think that’s a little exaggerated, but very well possible. I would guesstimate around 30+ banks will close shop.
I’m an investor in the stock market and have started to build a position in Bank of America. One of the few 500 lb. gorillas left in the room. Every dip, I pick up more shares. I don’t think there going anywhere, but you never know. Investments are all risky.
I never thought I would see this happen here in the USA, but here we are….let’s all cross our fingers.
petes2cents.com