Griffin Account Talk

[FogSailing]

Griffin:

What do you make of the problems with the Chinese markets losing 5% yesterday..I am concerned that their bad news may continue into tomorrow and could negatively impact the I fund for tomorrow? I'd appreciate your thoughts.

Thanks,

FS

 

[Griffin]

Ever since the Double Shanghai suprises back a year ago, China seems to have decoupled from the rest of the world. Is a 5% move for the chinesse unusually big? That seems par for the course with them in my opinion (maybe a little larger then usual). M2C.

Griffin:

What do you make of the problems with the Chinese markets losing 5% yesterday..I am concerned that their bad news may continue into tomorrow and could negatively impact the I fund for tomorrow? I'd appreciate your thoughts.

Thanks,

FS

 

[Griffin]

I held from making the move to the S-fund today, and it looks like that may have been a good call. The problem is that both domestic funds decided to slip a little lower on there lows today then they did on Friday. That has me a bit concerned. Keyword in that sentance "bit".

I only get real concerned in this type of situation when that lower low breaks the downside of the channel - which it didn't. However, a lower low can often trigger a dip buying rally. Hopefully that is what we are seeing in the makings of the last hour. A couple more skips across the surface of the pond that makes 1490 is doable, but each time it hits that point it weakens the support. If we don't rally in a day or two, I may consider a move to safety in anticipation of more downside action. I'll get into the details of that move, if it becomes necessary.

 

[Steadygain]

Griffin,
The John McGlaughfin (spelling) Show yesterday began with the economy. I doubt Pat Buchannon knows anymore than you, but most of the others honestly seemed very aware of our situation. The big shocker for me was when one of them described our present condition as equal to The Great Depression and most seemed to echo this sentiment. They are convinced that our present condition is about the worse we've ever had. All of them felt 12/07 would be tough and that by 6/08 - no matter how hard we tried to hold it back - a major setback was in store.

You're one I feel has a broad understanding of our current condition and seem to weigh out many factors before drawing conclusions. I've been playing the game for so long - it's hard to believe I actually need to withdraw and stay out. So my main question is: Once we experience a brief rally this month - do you think I should seize the gains and get out?

 

[Reactive1]

Isn't it the case that the I Fund has no exposure to Chinese markets, or at least to this particular market index.

Ever since the Double Shanghai suprises back a year ago, China seems to have decoupled from the rest of the world. Is a 5% move for the chinesse unusually big? That seems par for the course with them in my opinion (maybe a little larger then usual). M2C.

 

[Griffin]

Reactive1,

I believe the answer to your question is yeap, the exposure to China is 1.8% in the Hong Kong index - which is absolutely not the same thing as the Shanghai index. The Shanghai suprise roiled markets back a year ago and since then I threw it on my radar screen to watch - honestly, I have found watching it is index's pretty useless for our purposes.

Steadygain,

I said a few days ago that the big boys were very displeased with Ben. They didn't give a crap about the .25% cut, they wanted a statement that we were entering a rate cutting cycle. For them everything comes down to a rate cutting cycle and what Ben gave them amounted to a kiss and a slap. At first they were happy they got the kiss and the stock market went up the day of the FOMC. Then they realized in there collective borg concious - they'd been slapped and the market tanked, then they said "but wait Ben kissed us" and they had a moment of glee and finally they realized Ben had whipped off the leather glove and smacked them upside there head like a knight at a jousting tournament and it was "game on".

So the game is on....they needed to punish Ben for his audacity and hence this correction and all the Ben "sky is falling" chicken little comentary that has come with it. I fully expect a now belated rally since we are removed from the Fed decision far enough that you can't pin today's action on that event. So to answer your question, I believe this recession/correction/what-ever-you-want-to-call-it time of declining stocks is upon us once we get through this rally. I believe that this is the perfect time for a timer, so i would absolutely, not recommend a B&H strategy. I think this is when we can really earn our pesos.

 

[350zCommTech]

I think this is when we can really earn our pesos.

LOL!:laugh:

 

[DrFaustus]

Griffin,

Just so I understand what you're saying ... you believe that the market will have a brief rally followed by a recession/correction?

Dan

 

[FogSailing]

Griffin:

I hope you post early and post a lot. IMO , timing is extremely difficult and we will be needing all the insight and information from "those in the know" that we can get.

If volatility is rising, that means greater profits (somedays), but more-so...greater losses..

I hope we do have a rally today...but don't we all feel that way?

This 200B writeoff of sub-prime is scariy news yet...It takes months to get 30-40B on the table, and JPMorgan announces this potentail bombshell..

The bank CEO's should be taken out and keelhauled...

Thanks for posting...

FS

 

[Warrenlm]

The CEOs all were given golden parachutes by irresponsible directors, as permitted by the managers of large institutional investors. All they lose, temporarily, is their egos.

 

[Griffin]

Griffin,

Just so I understand what you're saying ... you believe that the market will have a brief rally followed by a recession/correction?

Dan

I believe we are in a contracting economy and the market will contract with it, over the next few months. This will not be one sudden move - it will step down - the resurgence of old fears coupled with new fears will move the market down, creating dip buying opportunities. I believe it will occur in a reasonable timable channel. You could step to the side, and months from now you will have saved yourself a little, but I believe this is exactly the environment that makes timing pay.

Look at the 2004.

 

[Griffin]

The market is not stupid, the fears are real and thats why we have a buying opportunity - I believe the odds are in favor that we rally - soon, maybe not today or tomorrow - but the longer we go without a rally the more likely we have a move down.

Griffin:

I hope you post early and post a lot. IMO , timing is extremely difficult and we will be needing all the insight and information from "those in the know" that we can get.

If volatility is rising, that means greater profits (somedays), but more-so...greater losses..

I hope we do have a rally today...but don't we all feel that way?

This 200B writeoff of sub-prime is scariy news yet...It takes months to get 30-40B on the table, and JPMorgan announces this potentail bombshell..

The bank CEO's should be taken out and keelhauled...

Thanks for posting...

FS

 

[Griffin]

One last post before noon - I'm reconsidering the FV play for today - that is catching a positive FV as a result of a late day rally in the USM by IFT from the I to the S - I'll make that decision around 1130.

 

[Steadygain]

I honestly turned to you for answers because I truely believe you are one with great wisdom - and have an incredible solid grasp of what's going on.

Thank you !! for your response. Very much what I needed to hear.

 

[FogSailing]

Thanks Griffin. If S falls below the 50 DMA, I'd say the rally won't occur for a few days...

FS

 

[Griffin]

I'm moving to S

 

[CountryBoy]

Griffin,

Thanks for sharing.

CB

 

[FogSailing]

I certainly did not expect the rally this afternoon after the slow morning session....and I stayed with S tomorrow. The S is now above the 20 DMA and the trend line looks like there is more room for an upside move. S still lags so maybe we can still grab a few pennies tomorrow.

Oil at $97 a barrel is the headline but the market still rallied. Will $100 a barrel cause it to tank?? Let's hope not. The C looks positioned for more upside tomorrow as well. Now..if it will only work that way.

Thanks for posting Griffin.

FS

 

[Griffin]

View attachment 2424

Lets consider that the market moves up to where it was at the end of last week, Monday. A quick check of this 10 day chart, shows where the funds closed today realtive to then and suggests approximately the following gains are reasonable:

EFA (I fund) - blue - 1.3%
DWCP (S fund) - black - 2.1%
S&P500 (C fund) - gold - 1.7%

I expect we will cover the majority of this distance tomorrrow, with the S being the big winner. However, keep in mind the EFA moved up 1.5% today, we will have to see if the I-fund FV is similar, otherwise their's more upward room in the I-fund then this chart suggests.

 

[Griffin]

The I-fund came in at 1.49% compared to the EFA's 1.51% so that means, the above graphic is accurate.

Australia is making some decent gains but Japan is really lagging. I'm suprised that the OSM's don't seem to be following suite behind the US. With a .72% FV waiting to correct tomorrow, if the OSMs all lag, it could make for an opportunity to buy back into the I-fund while the market pauses. Just a thought - the Eurozone is still very likely to pop.