So we ended up getting our rally (200 point in the Dow) that i talked about on Friday. In the last 2 days we have rallied about 450 points in the DOW which is a monstrous rally by any standards. We were down 150 on Friday when we got the AMBAC news and ended up +100 for the day (250 point rally) and another 200 points today.
Unfortunately this doesnt change a thing and we still are in a major, downtrending bear market. You will get significant rallies within the bear market that if you are fast enough to play will help you next a little extra on the side. But by no means am i turning wildly bullish on the markets..yet.
I sold all my Foster Wheeler (FWLT) calls i bought on Friday right at the close today for a 30% profit over 2 days. That is a very nice profit specially for holding the position just for 2 days. FWLT also reports tomorrow morning and though i believe it will blow away the numbers both on the top as well as bottom line (specially because of the 7.2 billion infrastructure contract it got from Qatar last november), anything less than the most optimistic guidance going forward will crush the stock price in this bear market. So i'm sitting fat and happy on my 30% gains.
Over the weekend, Fox Street Journal printed a negetive article about the brokers especially GS saying the recessionary environment will lead to less M&A activity for these guys in 2008. No Shit Sherlock! Why else do you think GS is off 35% from its highs? Because its trading arm isnt making money? The GS traders were the only ones on the street shorting the hell out of the subprime CDO market last Fall when the rest were still infatuated with the *guaranteed* cash flows these instruments provided every month. I still believe in GS, after all these are the same guys that personify the "Masters of the Universe" phrase.
"In Goldman Sachs We Trust"
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