thin ice

The market bottom is forming like a lake beginning to ice over. With a Fed announcement due on Wednesday, that ice could thicken, if they announce another rate drop, or it could break if they do nothing more. Regardless, the subprime crisis will ensure that this winter doesn't get cold enough to make walking on water very safe. Enjoy short term gains but avoid "buy & hold" unless you prefer your bull "wet & cold."

2009 February 17th

On February 17, 2009, the analog TV transmitters of 1600 broadcast stations will be shut off for good. What US companies will rise or fall by the end of analog?

Volatility

Not much is certain in the markets. It appears we're in a short to intermediate term "bounce" with the big picture being bearish still. One certainty is observable: high volatility. One way to profit off of this volatility is to take the top ten highest volume stocks on the market, and look for one to make swing trades with options by setting limit orders. For example, with Google I'm trading GOPRJ puts within 14.0 buy to 24.0 sell and GOQIW calls between 7.4 buy to 11.7 sell. There is some danger that the market will decidedly choose to break up or down with momentum but until then some 50%+ gains per trade could be possible. Also beware earnings disclosure after market on Thursday 1/31 evening; typically Google's earnings in January have been unexciting, but a surprise could cause the price to gap up/down overnight. Don't follow me if you can't stand a 100% loss.

speculating on speculation

Today, Apple's Steve Jobs announced amazing new products, alliances, and sales numbers, but AAPL lost 5% because of the general market direction due to mainly to the news of Citi's subprime slime.

Yesterday was when the late-comers bought their positions in Apple, and yesterday I sold one, taking a 25% gain off the table, capitalizing on their speculation. In the shower today I reflected on the wisdom of "the day before the day before" as a general strategy for taking advantage of the speculators who come "the day before" some event such as an earnings report or product introduction. This was the strategy of Levi Strauss in the California Gold Rush of the 19th century; it worked out well for him!

Speculating on the speculation has a much better risk/return ratio than speculating on the actual event. The reward may be less, but the risk is lower.

Bears!

The chartists I subscribe to uniformly agree that the market has departed from a long term bullish trend, and is now in a neutral with bearish tendency mode. This is a radical technical change, indicating we are in a correction which will someday find its bottom. Investors would be wise to make at least half of their positions bearish in nature, or else to stay away from equities completely. Increasing percentage of portfolio held in cash is a very good idea, to be able to take advantage of the bottoms to come, along the way and at the equities 'clearance sale' megabottom.

the new cheap PC

Story here (In response to the One Laptop Per Child project's demand that Intel curtail work on its Classmate PC and other cheap laptops, Intel resigned from OLPC's board and canceled plans for an Intel-based OLPC laptop.)

What began as a noble charitable endeavor to help 3rd-orld primary education, has ignited an arms race in the new market it created for cheap PC's? Or is the market in 1st world countries for these low-cost digital devices really for use as PC's? or rather, I speculate, they will be sold as enlarged PDA's activated by signing a contract with a wireless service provider... like an iPhone on steroids. If this is the case, Apple is only the first PC maker to begin to compete with cellphone manufacturers.