Baltbear on Finance markets are like marshmallows

i rceived an email a couple ago asking, basedon a conversation elsewhere, what i meant by ” shake and bake” –was i referencing talladega nights?

nope. the termpredates that movie by a decade.
let’s explain:
so, mm’s see a surge tomorrow on ticker abcd:nasd.nm. how? because sallimay, the daughter of the ceo told her sorority sister, the daughter of the hedge fund manager, that she was going to shopping for a new beemer on saturday.
(don;t think that happens? i once had an associate who was chief of security for a rather expensive private college, who did his most successul trades based on whether visiting parents, who were all ceo/cfo/coo/etc types were smiling or somber whe they greeted their daughters.)
the mm can see, on his screen that there are a total of 100k shares hanging in the float wth limit sells, and stop loss orders.
let’s say abcd is trading at 15, and there are stops in all the way down to 10. a stop loss at 13 5/8 will execute at 8, if that’s the clear (the “market”), and there’s a buyer. so.. he offers to buy 80k @ 8, and sell 1k at 12, 1k at 11, 1k @ 10, 1k @ 8 1/16. somebody elsewhere (like me) has a limit buy, 1k @ 8 1/8.
as soon as the “enter” button gets hit, the domios fall, and all 100k of stop losses kick in, looking for a buyer. why? becuase that 1k @ 8 1/15 sell hit my buy 1k @ 8 1/8.
the mm is now short 1k, but, if there are not limit buys in for 99k more between 8 1/8 and 13 5/8, all those stop losses are going to pour into the mm’s account.
and 2 minures later the whole thing is over.
and that’s shake and bake.
think things like that never happen? tat the markets are not that corrupt? that hedger fnd managers are your freinds? that ur broker is looking out for you? that that hypster on a stock board cares about the company? that the regulators will prevent this?
ok. keep beleiving it. or else note:

then read the chage in “analysts” lol…”sentiment” today.

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for an easy chart:

http://makemoneyathomeadnetwork.com/link/fanniemae

(an easy way to cut a 120 character url to fit)

do we see it?

would friday have been an intersting day to trade into accumulaton?

http://makemoneyathomeadnetwork.com/link/fanniemaefriday

is 5/8 gone? maybe… i’d be keeping some limit orders in place there.

Several limitorders. and if any filled i would set them as limitsells @ 13/16.

and reload.

the numbers i offered here a few days ago still stand, even if they have generically moved up 1/16 already.

Some years ago, an associate from Philly msg’d me in a yhoo stock chat room…how can you make any money buying stocks where a 1/16 is a big move? my answer? u buy lottttssa it.

negative notes: kuwait cancelling deal with dow. israel/hamas. life in general.

Sir John Templeton: “I buy when there’s blood on the streets.”

positive notes: fnm taking possession of rent houses and maintaining good renters in place, thereby giving itself a little “real” cash flow, which will probably become value add to potential seculative housing buyers.

who wouldn;t pay a little more for a distressed property if there was a solid record of rents rec’d?

the 20% decline for Christmas sales (excluding food purchases, which were used to create a 4% drop) in retail etc indicate debt reduction and cash accumulation, since 20% is (so far) above the drop in payroll $.

t/a people of my trianing would be getting warm feelings over those 2 charts.

Marl Mobius (successor to Sir John) :”I cum when i see blood on the streets.”

ok. thank you for sharing…using limits and pullouts for a condom, fannie mae appear to be evver so worth buying a drink..and some money in the juke box.

Posted under business

One of those real market stories the current mess tends to overlook, alon with other kinds of fraud, is a strategy best described as “doing whore stocks”. i got the term from a former associate, whi went by Tokyo Mex, and speculators who have been around will recall him..or not.

there’s the girls you take home, and the the girls you don’t. it’s not a philosophy for me in re dating, but it has advantages for speculators.

Currently, one of the better ladies of the decade is just out of rehab for her crank habit, fanie mae, fnm.

And today, her rehab center sent her a solid prescription for her methadone… about $10 billion worth.

And it;s late at niht, and she’s sitting down there at the end of the bar, and all the good girls are home woth broken hearts. Do you buy her a drink? She’s shown a heckuva good tme to the first guys wo gave her a cance.. a double off the bottom.

in the middle of the idiocy that is passing for an auto bailout…housing…we remember housing don;t we? that thing nobody is gonna have if somebody doesn;t get some real jobs made??

here’s a hypothetical strategy  for prident speculators with ethics for leaving something to their children and grandchildren w/o too much burden, and a chance to “do the right thing”.
Take a few dollars of speculator money that would otherise go to some “hot tip” about stem cells or solar cells or prison cells, and buy some fnm here around the 5/8 –3/4 mark.
If without any screaming on cnbc it took a sudden hard drip, possibly grab another chunk, because it would be a sign that some major smart money was trying to shakeout human beings and be a lion to eat the whole elephant (see the last article).
if the indicated trend line holds, in a while there will be shares to sell at over $1–where fund managers with ethics will be able to nibble, and more at the $2 mark, if it happens.
A speculator who took loose cash and threw it directly into a bet on housing health is contributing to that health.
a prudent speculator who bought (and these are utterly hypothetical numbers) 10k shares
at 5/8 or so, and sold 4 k shares at 1, and 2 k at 1 1/2, and 2k at 2 over a 3 year hold would have??
hmmm.. $6250 at risk. 4k + 3k + 4k back over 3 years. 11k back. 11k- 6250 = $4750 cap gain, long term..apx a 20% annual ror…which is major league for real houses,
>and< would still be holding 2,000 shares for the grandkids…
(disclaimer: this is neither investment advice, nor an offer to buy/sell. this is an idicator of how serious money got to be serious. i hold no fnm and do ot plan to purchase any over the next 3 years…because i never buy a stock where i dnl;t know the whle story…and “housing in america” is too big a story to understand).
Truly nimble traders can of course beat these numbers usihg the “trade into acumulation” model with more compression…or lose their tails…
but, there’ a story about prudet speculation, and a beat up whore at the end of the bar.

Posted under business