Wednesday, September 3, 2008

Comments for Timer Digest as of Wednesday, September 3, 2008

Comments for Timer Digest as of Wednesday, September 3, 2008SocialTwist Tell-a-Friend
Fari Hamzei

Reading that FNM & FRE have approximately $223 Billion of debt maturing in September. Warren Buffet, in an interview back on August 22nd, called it as he saw it: "[They] don't have any net worth...the game is over..."

Barron's valued them recently at approximately negative $50 Bils each.

And, yesterday, Fitch Ratings slashed its debt ratings for preferred stock of Fannie Mae and Freddie Mac's from "A" to "BBB-," the lowest investment grade rating.

Balance these with a comment from a former advisor to China's Central Bank (holding some $376 Billion in US GSE debt):

“If the US Government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic. If it is not the end of the world, it is the end of the current international financial system.”

-- Stay SHORT Broad Indices and Financials, this could get very ugly very fast....

Sunday, August 31, 2008

Let me clear something up once and for all

Let me clear something up once and for allSocialTwist Tell-a-Friend
Fari Hamzei

This morning emails are continuing to pour in and I feel it is better I write to all of you all at once, clear some air and get every body focused back on the markets and the week ahead. My only request is that, after reading my explanations, whether you agree with it or not, let's just move on by NOT replying to this email and spare me of your response. We all have a lot to prepare for this coming week. Thanks for your understanding in advance.

First and foremost, I am not a political observer. And my market comment last Friday for Timer Digest was not supposed to be interpreted as a political statement. At Timer Digest, the Top Ten market timers (out of approximately 150 timers) are encouraged, twice a week, to email in and highlight what each of us observe as key issues facing/impacting the markets in the short term. Our comments are posted on Timer Digest's hotline on Wednesday late afternoons and Saturday mornings.

Second, I am a die-hard Reagan Republican. As the part of my preparation for the markets, I read a lot of market-related reports, on a daily basis, from highly regarded authors and I was simply highlighting what issues this fragile market might be reacting to, including, but not limited to, the general elections, the bond and commodity markets, hurricanes, and the Russian behavior in the Caucasus.

If you carefully review the minute by minute trading data on Friday (after a series of better-than-expected economic sentiment data during the first 30 min of regular trading), market began selling [hard] exactly when McCain Campaign confirmed the rumors that Gov Palin was indeed Senator McCain's choice for his VP. Markets, in aggregate, are smarter than any one of us and we should heed their hidden message. (sometimes we do not get it right, including yours truly, back in May 19th --oh, well !!).

IMHO, what Senator McCain did is most unnerving -- he gave away a very tight election at the time us Republicans must endure the many failures of Bush-Cheney era. If you look at this morning's highly rated CBS "Face the Nation" or NBC "Meet the Press", both anchors, Bob Schieffer and Tom Brokaw, opened with or brought up same concerns I wrote to you and Timer Digest on Friday.

I think I will sit this election out. My Republican vote won't make a difference in IL where I reside now or back in CA where I lived most of my adult life. And by doing so, I think it may help me be more objective, and less emotional, than the previous five presidential elections I eagerly participated in.

About the Top of the Republican Ticket:
I've been privileged to work with the best and the brightest this great country has to offer and in the process it has raised my standards very high. I just can't vote for a guy who came in 5th from the BOTTOM at Annapolis (for your info, I got into Princeton Engineering School at the age of 16, having been admitted to Annapolis, MIT & Cornell but finally opting for Princeton). For admission to Annapolis, as an allied officer, I received an appointment from President Richard Nixon. At Northrop Grumman, I was honored to work on US Navy F-18A Hornets and in my last two years there I reported to the Father of the Stealth Bomber (USAF B-2 Spirit), which some geopolitical analysts believe, its mere existence, crumbled the Soviet control over Eastern Europe.

And the Veep:
State of Alaska is less populated than the City of Chicago with a windfall budget surplus that you and I pay for at the gas pump. Per capita, that is an outlier fiscal condition. Lower 48 Governors are vastly better experienced as they operate in a more "normal" fiscal conditions. And before that, Gov. Palin was a mayor of a town with 9,000 people. These short and very limited experiences do not train her to be one heart beat away from becoming the Commander-in-Chief of the sole superpower the Free World has. This I know. I grew up and worked in the Military Industrial Complex in my backyards (in Washington & Los Angeles).

Read this

and this

These are issues that Dems will bring up in the Presidential Debates.

About the Democratic Ticket:
oh, BTW, Senator Obama, although I understand he is very smart, IMHO, is not qualified either and does have a number of unsavory associates. Senator Biden is a wild card and gaffe central.

If these two tickets are the best this Great Land can come up with, then, it is indeed a very sad commentary on the State of Our Union.

Saturday, August 30, 2008

Comments for Timer Digest as of Friday, August 29, 2008

Comments for Timer Digest as of Friday, August 29, 2008SocialTwist Tell-a-Friend
Fari Hamzei

nothing new to add .....but

For Senator McCain who is 72 years old and has had four bouts with cancer to have chosen someone so completely unqualified as Gov. Sarah Palin to be a heart beat away to become the CINC, is shockingly irresponsible. Suddenly, Senator McCain's age and health become central issues in the campaign, as does his judgment.

Market should sell hard as Obama/Biden Victory is all but guaranteed now.

So in effect, as Labor Day approaches, we are walking into a perfect storm, with Elections outcome (as discussed above), Financials in disarray, Czar Putin on a rampage in the Caucasus and Hurricane Gustav heading right into the Gulf of Mexico with elevated water temperatures.

My God save and protect the Union....

Friday, August 22, 2008

Notice of Change of Bias on SPX and My Comments as of Friday August 22, 2008

Notice of Change of Bias on SPX and My Comments as of Friday August 22, 2008SocialTwist Tell-a-Friend
Fari Hamzei

Dear Jim,

I am reversing my existing LONG position (from April 10 @ 1360.54) and going SHORT S&P-500 Cash Index (SPX) as of the Close Today at 1292.20 (almost touching its +1 sigma).

We have a rough patch ahead of us. The problem is the unresolved turmoil in the Credit Markets as we enter the season of high volatility for our Equity Markets. Brace yourself (and your portfolio).

Here is our Timer Chart:

Friday, August 8, 2008

Comments for Timer Digest as of Friday, August 8, 2008

Comments for Timer Digest as of Friday, August 8, 2008SocialTwist Tell-a-Friend
Dear Jim,
As I wrote you two days ago (before the close -- see below), both of those events happened today but not first without a sharp sell-off (yesterday), which brings us to this point:

we did observe outside bar reversals on vol indices (VXO and VXN) today... but our proprietary volume and breadth indicators are not looking very terrific here. putting all of this together and noting that the rally from March 17th low had more upward pressure, we read this as a very skeptical market. considering that seasonality wise, the more volatile part of the year is ahead of us and not behind us, the market may be bracing for another shoe to drop in financial/housing/energy markets.

given that next week is August Options Expiry, we need to see more volume before we can press it. we will, but when it's time (IOHO) !!

I have attached our Vol Charts:


From: Fari Hamzei []
Sent: Wednesday, August 06, 2008 1:57 PM
To: Jim Schmidt (
Subject: my comments for Wednesday August 6, 2008

we are about to see our SPX channel breakout confirmation...........with a close above 1292.00, STAY LONG or GET LONGER. Volume is key determinant here.

NDX (and QQQQs) will go up to test their 200-day MovAvg in the coming days.

All the best;

Fari Hamzei
Hamzei Analytics, LLC

Friday, August 1, 2008

Comments for Timer Digest as of Friday, August 1, 2008

Comments for Timer Digest as of Friday, August 1, 2008SocialTwist Tell-a-Friend
Fari Hamzei

With the non-event July Non-Farm-Payroll behind us (except Jobless Rate spiking to 5.7%), the worry is now on GM, MER & C. If you do the math, GM has about 60-day cash on hand to pay its bills. That is awfully tight for a company with $180Bils in Revs. CDO write-downs for MER will force another round of write-downs for C and other major large international banks (22 cents on a Dollar sale by MER vs 50 cents on a Dollar held on books by C, and alike). Vikram Pandit, one of the best and brightest on Wall Street, has an uphill battle ahead of him in the next few quarters. The Credit Bears continue to Rule this Market.

Technically, the market structure has not changed. Look at NDX for month of July. It went completely sideways. The TechLand guidances have been very perturbing to many investors, small and large. The only bright spot seems to be the BioTechs (see BBH components).

Bottom Line: We expect more or less sideways action during the remaining dogs days of the Summer. Come Labor Day and the final push for the Presidential Elections, we should see some follow thru in the Equity Markets. Direction is unknown at this point.

Friday, July 25, 2008

Comments for Timer Digest as of Friday, July 25, 2008

Comments for Timer Digest as of Friday, July 25, 2008SocialTwist Tell-a-Friend
Fari Hamzei

We are getting cautiously optimistic that we are in the process of building a bottom. While our credits woes are not over yet (see news on Chrysler completely pulling out of Auto and SUV LEASES today and S&P downgrade of FNM & FRE Subordinated Bonds and Preferred Stocks) and summer trading this year could be rather gut-wrenching, we are fully cognizant of the fact that Bear Market Bottoms take time to build. They are not an event. Rather, they are an evolution.

With RUT and NDX catching a bid here today following better than expected news in new home sales, consumer confidence, durable goods and lower crude oil prices, we are hopeful that our Equity Markets will finally make a turn here for good.
Having said that, for now the best advise is to "Stay Defensive and Collapse Your Bet Size" !!!

Below is our Timer Chart.

Wednesday, June 25, 2008

Comments for Timer Digest as of Wednesday, June 25, 2008

Comments for Timer Digest as of Wednesday, June 25, 2008SocialTwist Tell-a-Friend
Fari Hamzei

We are going thru a mild rebound here but due to lack of volume, lack of panic and lack of rise in VIX, it is troubling us here.

Stay defensive. The flush is not over yet, in our opinion.

Sunday, June 22, 2008

Market Commentary sent to Timer Digest on Friday, June 20, 2008

Market Commentary sent to Timer Digest on Friday, June 20, 2008SocialTwist Tell-a-Friend
Fari Hamzei

Volatility has increased in line with our projections. We are currently extremely oversold. We should see another bounce this week. Whether it is a dead cat bounce or not we do not know at this point.

In our opinion, this was not a complete FLUSH of the weak longs.

Wednesday, June 18, 2008

Market Commentary sent to Timer Digest on Wednesday, June 18, 2008

Market Commentary sent to Timer Digest on Wednesday, June 18, 2008SocialTwist Tell-a-Friend
Fari Hamzei

Our Market Pulse Indicator (MPI) is getting ready to setup for a [ROYAL] FLUSH of the weak longs. Once we are thru that painful process, we should be ready for a blast off. The window is 2 to 5 days. Brace Yourself.

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