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American Capital Agency Corp. Message Board

  • slegermark slegermark Jan 21, 2013 2:53 PM Flag

    The market forecast from Zacks. This is not an advert just want your thoughts on their outlook.

    I get daily reports from zacks, most of it I take with a grain of grain alcohol. The markets this month have seen the most influx of new retail investment money since 2007, I think, into funds mostly. Either it means the latecomers have arrived in time for a drop, or it signals strength and sustained investment coming.

    Here is the page from my zacks report.
    Debt Extension = Bull Rally Extension

    Stocks hung around breakeven all day Friday. Then in the final hour news broke that GOP leaders are proposing a 3 month extension of the Federal debt limit.

    This is a big deal folks because it decouples this urgent problem from the also vital spending cut negotiations. That is a welcome move as both parties know that flirting with a debt default would be disastrous.

    Now toss in a dash of good earnings from GE and Morgan Stanley. Add a dollop of +7.9% GDP growth in China and you know why we have a new closing high at 1486.

    This week is our best shot to hit 1500. Then likely a consolidation period to follow. You know what to do.

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    • Hi Slegermark,

      Exactly!! I am hoping that KMP heads into the 90's with this expected surge these remaining 5 trading days before EX(might make an all time high @ 90.61+) which should make for a great short on the 29th. I will hedge, at that time, with a Long Call to reduce the possibility of further CA. Should be fun...;-)

      BTW, does the report address the real possibility the Dems will say, "NO WAY!", to the stipulation that the Senate has to have a budget in 3 months, by the Repubs, in order to go forward with the raise in the debt ceiling(I think many are ignoring, or are in denial, of this huge barrier)? Great Brinkmanship on the part of the Republicans.

      So my selfish wish on this KMP trade, is that we will get the expected surge on the rumor of the debt ceiling "resolution" and then get slammed on the facts, after my short trade is entered, with the realization that we once again have business as usual with our boys in blue(Congress).

      • 1 Reply to reits_r_us
      • Hey at least we have an increased probability that some meaningful spending cuts will happen. Public service, by the way, is what made me shed my party affiliations and loyalties. I belong to the Pragmatists now.

        There seems to be an argument on who's responsibility it is to offer a budget.

        I sold my KMP put at a slight loss on friday, as I saw the market move with confidence. Now I might short a few puts on it if I can get the right permutation. and close them out on xdiv eve.

        There are LOTS of good value plays out there. I'm looking at strangling NTI [thanks Foxy] they go xd around feb20 trading at 24.00 feb 25calls@0.50 22.5puts@0.40 Stub divy for last 2/3 quarter was over a buck. If there is an event the put will probably give me BE protection, otherwise I look for it to move 2points maybe more. If the prorated div matches up with the fundamentals behind the upcoming div, the distribution could be over 1.50. Given that they just went through an internal offering, upside could be 3+. I think we might be pretty safe to speculate until mid march before skittishness returns.

        My wife thanks you for the guidance that has led to decent gains in her IRA. I have her in cash now but I think most of it will go into WMC this week. Return of market vigor will propell it past 24 again. AGNC earnings next week will be the bellweather, unless there is an earlier one reporting.

19.480.00(0.00%)Oct 21 4:00 PMEDT