Market Update 6/4/2008

Well today the big headline is Lehman has buyers for its debt...anytime when a banking firm has to come out and say it is making progress to eliminate its debt probably means theres a lot more hiding in its closet. Nevertheless, the stock climbed from the abyss from the morning plunge at 27 and is now in the green. For those of you speculating around Lehman and playing the moves, stay quick and nimble.

Also in the spotlight are MBI and ABK - aka the bond insurers, that they are getting downgraded by Moodys. Because of this their stocks are getting annihilated...again...

I have lost all my respect for the rating agencies already. How many times have they downgraded and upgraded their stocks? Same with the S&P. These guys are clowns. And for MBI and ABK to tank "because of the downgrade." Why is the media is acting so suprised!? As if it's the first time we've seen this happening? Ha

JCG after its morning plunge once again is hovering near flatline. The price action is starting to look encouraging because a necktie support is now forming underneath at the $35.50 level. Should JCG close in the green today technicians will be all over this IMO and it will be an indicator for shorts to cover positions. That's when we could finally see that POP. Hang tough!

I am buying a new trading position into strength because the stock has simply been annihilated but is now showing signs of life. United Airlines (UAUA). Yes, highly speculative. But I am buying it for a few reasons: 1) It has been obliterated as we all know YTD. 2) OIL IS COMING DOWN. And the more oil pulls back, the bigger pressure it would be for shorts of airlines to cover. Causing massive short squeezes. And while I'm at it, how bout that USO Short?! My discipline is now paying off, I am in the money.

UAUA has already gone from 7.77 to where it is now at 9.36 in TWO DAYS. That's a big move! But I don't think its done yet it still has room for the upside. I bought @ $9.00 even on a breakout trade. Stop loss at exactly $9. My target to close position is @ 10.35-$10.50. $1.35 move on small stock like this is a pretty sizeable gain. I am going on record right now though and saying when this stock hits anywhere above $10.50 or if oil shows any signs of a firm rebound I WILL BE OUT COMPLETELY. So make no mistake I'm not going to be in it for long.

Good luck to us today

- DL

Disclosure
Long GOOG, 75%V, 35%PWRD, 166%JCG, UAUA
Short USO

UPDATE 1:

Buying my PWRD position back now @ $25.58. From the chart setup it looks like the downside is limited. Add that to the fact the major indices have already had a sizeable correction (near 700 points plunge from the highs at 13,000 and close to 300 points in the past 5 sessions), it is once again due for a short term bounce. Along with it PWRD should be heading back up toward the $27+ zone in the very near future.

Disclosure
Long 75% PWRD

Update 2:

USO effectively broke through its 20DMA today and failed to go back up. It will probably free fall now until $95 where it will find its next level of support.