I gotta quick minute, so I can talk. Basically, the sell off doesn't surprise me at all today, in fact a kinda suspected it (hence the hold of FAZ). Mike Mayo, a world known anlayst, downgraded all the major banks stating the bank pain is far from over. In addition, billionaire George Soros came out today and said the same thing and even "every major bank is involvent". Rather interesting....
Tomorrow will highlight alot, especially with Alcoa earnings after the bell. The big uptick rule is Wednesday, so I suspect a rally but it AA guides lower, we can see a terrible week!
My favorite play is FDO. I am long 4 calls on at the $31.50 strike (+FDODZ is up 85% today) and 6 at the $35 strike (+FDODG is up 150% today). Anotherwards, they are printing $$$. I still haven't sold any but will trim but I think this continues tomorrow. If they drill numbers at raise guidance, ratherly agressively, itll print $38-$40 this week.
An interesting thing I would like to bring up is the inflation vs. deflation trade. Many people say we are going to deflation and if that is true, the play is to short commodities and get long, long treasuries and the dollar. Inflation trades center around buying commodities. I personally think we will get both, deflation first. I mean if consumer spending makes up 70% of real GDP and jobs are falling at 700K a month, you would think people are saving $ and not spending (therefore forcing price decreases on goods). I think then we will enter a high inflation period, once jobs rebound and the economy turns. Gold is cheap here and you can see that big money is taking money out of gold and buying other metals. I am not a economist, so my thoughts probably don't mean much.
For stock I like: FDO, EMC, CIEN, PCU (or JJC).
Be careful on small cap stocks, if we rollover hard, they can get nailed. Scale and cash is the game plan, I cut stakes in NTGR, GNK, JASO, to boost my cash levels.
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