It's Been Busy

My school schedule has been in full tilt lately. Work has also been pretty busy. Tomorrow is a big day. The Fed announcement will be out by 2:15 PM ET. This is one of the few times in past several years that I can remember a sizeable disparity between consensus expectations for Fed raise or pause on the fed funds rate.

I am expecting a 25 basis point hike tomorrow, but a change in the measured pace language which includes a discussion of potential risks to the economy re: Katrina, etc. Fundamentally I don't personally believe it makes a bit of friggin difference if they raise tomrrow or a month from now as long as they continue to raise and eventually leave fed funds in 4-5% range until the economy cools off. In reality however, the Fed's language and decision should result in a huge move in the markets and a large effect on many important sectors (re: oil, gold, interest rates, etc.) I am not so sure anymore that the sell-off in gold is going to materialize, but I remain optimistic that I may be able to achieve my prayed for sell-off of 2-5% so that I get my entry point.

The sudden run-up in gold has forced me to analyze other sectors in several bearish plays. I am looking again at the homebuilders as potential shorts and have my eyes set firmly on Pulte Homes again (PHM). I am looking to pick up the October 2005 $50 puts potentially for around $6.00. I also would love to buy some puts on Best Buy(BBY) - but I think that it has already run too much. Both of these stocks will move either way I think up to 10-15% over 2-week period based on the Fed decision.

There is a lot of chatter and difference of opinion right now. Several important and intelligent market analysts are bullish while others remain increasingly bearish. I am firmly in the Bears camp, but I am using this argument and quite honestly - reality of a huge imbalance in the US economy to talk my way into entry points in some favorites. NCTY continues to sell-off and I remain optimistic that I may obtain my $15 or less buy-point if all goes well and we experience a broad market sell-off.

So in the meantime - there is not much excitement as I remain positionless. I may enter substantial positions as early as tomorrow afternoon or it may be weeks before I make a move. Nothing is certain. In the meantime - I am open to any topic requests that readers would like to see discussed in more detail and can be contacted at bengreen@gmail.com

Regards,

BG