..25bps or 50bps?...How cares now..!. Let's just get this over with and move on!. Last Tuesday, we put a cautionary spin on the DJIM players and therefore the market. This has turned completely into a lack of set ups and muted action in those players. Just look at the Russell 2000. Last Tuesday's close was 782, yesterday 775 and nothing more than a 15pts range within this time frame to trade. You can't do much with that as far as trading opportunities go. We'd rather have the credit crunch back in the news and trade those small banks on the LSE the past few days than sit through more of this grinding action. So, that's why we say, let's just get this FOMC over and take it from there.....it might be a case of double or nothing, or doubling up or not on the bps cut and 50% of the experts who have put money to work..on the line are not going to be happy. This decision is far reaching as its going to make a significant difference to all the markets from equity to currency. We've taken a different approach and that is not bet on either and be positioned very thinly as far as dollars invested heading into the afternoon. Just don't do 25bps today and say ..th-th-th-th- that's all, folks!. This looney tune from the Fed would send the market tumbling. It's the accompanying statement that will play a the vital role as we want to hear they will be ready to do more. So, that is the afternoon, but let's not forget the very crucial morning as the report from LEH kicks off the big banks reporting season. This might leave this market stained for the FOMC decision if they didn't find a way to fudge the book with BS MS GS that follow this week. Traders / investors will scrutinise these results from head to toe.
..as far as individual plays yesterday of interest....
BIDU was definitely the one and really only that was of interest yesterday for us and traders in the momentum space. Unfortunately, as always BIDU to us is a day trading stock and really not fitting to most of our subscriber base. The price also dictates that many are not going to dish out the bucks to make this a worthwhile trade on most days, so we tend to leave it off the board here.
EJ, last week we said 'volume' will dictate if its worth a further trade. Yesterday, the initiations started for this recent Chinese real estate IPO and it got the volume going. CIBC with a $25 and Lazard with a $23. There were also some huge trades in this at 20 even, so there might be some protection from the usual volatility, especially to the downside. A possible spin that we are trading now is that the lead book runners of the IPO will initiate in the next couple days, maybe Tuesday...Merrill Lynch, a tier 1 being one of them.
ROS, last week we alerted this Russian telco again. It's slow, which might be the best medicine the past week. Yesterday in the afternoon it got highlighted by Briefingcom....New High Profiles: OAO Rostelecom(ROS) .....is sitting just below its all-time high of 61.55 set last Thursday after edging above the top of its Jul-Sep range.........it is difficult to pinpoint a single event that has acted as the catalyst for the shares. However, we note ....recently reported impressive financial results, FY06 results on 7/19 in which the co posted a 49% YoY increase in net profit and a 50% increase in revs....Deutsche Bank recently commented (8/30) that Russian operators are continuing to benefit from growing usage and a benign pricing environment, after VIP reported strong Q2 results on 8/30...
CMED, SIMC are a few names played here before making new highs intraday without faltering by close.