Jim's cycle trades

[EMphase]

<< embedded bond features. >>

You meant embedded bond futures, not features...correct?

I was referring to an embedded put feature inside a bond. "A put feature limits the downside price movements of a bond when interest rates rises; loosely speaking price will not fall below the put price. This leads to the conclusion that the value of the putable bond will be less sensitive to interest rate changes than an otherwise identical option-free bond."

TLT....so far, about the only call I am getting right....Though ERS is moving too.....Raising my stake in the TLT looking for a test of double bottom resistance at $88

CSCO was a giant wet bite out of my behind.....I really think John Chambers is setting the market up to over deliver in the next earnings report......Of course that's cold comfort for my options positions which took a bath.

<< embedded bond features. >>

You meant embedded bond futures, not features...correct?

Or did you mean features of imbedded bonds?

A slowly falling dollar helps exporters, I understand that......But a plummetting buck does not help......Right now everyone is saying gold is rallying because the Indians want to carry their wealth around with them.....Maybe, but I get a sense as well that much of the world is fed up with US dollars, much like they're fed up with Tom Cruise.

<< embedded bond features. >>

You meant embedded bond futures, not features...correct?

[EMphase]

Hi Jim,
US dollar falling can be something allright for your economy at least for the short term. Of course you are losing buying power if you travel or if you invest in another country such as Canada but if you aren't doing it now, you may lose even more buying power so Warren Buffet investing right now for international firms is a sign that he does believe the US dollar will go down further. I share the same thoughts of Mr. Buffet. I am a canadian and I am currently investing in the US market but I'm hedging my positions with currency-based derivates (long canadian dollar) because I highly think that if I'm exposed to the currency risk, I'm going to lose some of my US profits.

A low US dollar means you will be able to export more outside of the United States by being more competitive versus other firms in other countries. So basically it would still be the time to invest in companies exporting. More export means higher aggregate demand which stimulates your economy. However you will have to watch for the inflation because if it happens it could get pretty nasty considering that the average americans got so much debt and increasing the interest rate based on a restrictive moneraty policy at that moment would cause large amounts of personnal/corporate bankruptcies, etc.

Also considering all this like you said interest rates reached the true bottom not too long ago. They can only stay there or start going up in the short future. Under these circomstances, this means that bond prices will most likely go down. Interest rate risks are going to be there so basically reduce the duration of your bond's portfolio by choosing high yields/high YTM/low maturity and possibly add embedded bond features.

CSCO has a saucer & handle pattern on the weekly chart. Pivot price is a close above 22.

[mrmarket]

CSCO's stock price is off 80% of its all time high, yet its earnings and revenues are greater than when the stock was at its all time high. While 20% growth is probably not attainable for this behemoth, 10% growth looks very reasonable and very impressive.

I have to agree with Jim..CSCO is a steal right here.

Or, maybe there's no recession and we get a taste of 1923 Germany as folks lose confidence in the US dollar.......Stocks fly, bonds plummet, tangibles fly.....I don't know but Buffet doesn't want to hold US dollars and he's willing to send them to Israel.....Is that an indictment on the buck? Rather than hold US dollars, he sends them to a relatively unstable part of the world.

I think GOOG can see $525 by Memorial day..........What I am looking for is a significant countertrend move down in the 10 year treasury note yield.....I think a lot of stocks rally on this but then later sell off as the yield inversion folks take the field....
So, I like retail for a trade.....Love the CSCO.....MOT is a play I like......I think the NDX is going to RAMP.....I am long the TLT looking for 88.....

[Rob]

Cisco

CSCO is rocking on the earnings call.

I'm watching that. Congrats on holding. CNBC reported that their $0.29 beat the highest forecasts, even though the avg. was $0.26. Hey, a win is a win.

Holding 40 July CSCO calls.....my work said CSCO to $24.20 and this market rally wouldn't end till CSCO topped out.....CSCO is rocking on the earnings call.

TLT....long.....betting that the rates on the 10 year fall to 4.8% or lower, fast.

I sold Rydex Juno today (shorts bonds) and went long Rydex Inverse OTC (shorts the NDX).

Betting that the yield curve will invert and therefore a recession in 2007