Thursday, January 21, 2010

Trade Alert: GS

Well maybe we can catch a short trade on Goldman Sachs (GS). The only reason I hesitate is for the shear brazen criminality with which the specialist is driving this stock.

First lets take a look at the one year chart in the daily time frame. What jumps right out is the multi month stretch of anemic volume followed by a jump in selling volume today. This stock is riding high on thin air and vulnerable to free market forces. However the fact that the company is still in business and it's stock is trading in the triple digits shows that it is being protected from free market forces ass well. Which one will win, the free market will it's just a question of when. If I could answer that question we'd all be rich, but the chart above does show that support of $165.00 is being severely tested today. The stochastics are north ward bound, but that obviously change if the shares stay below $165 for very long.

Now take a look at the 5 day chart in 15 minutes period.

You can see how the stock jumped at the open to $171.00 , then crashed under $168.00 in the first few minutes of trading. Don't believe any crap about order imbalances stocks in free markets don't behave that way. That is much more consistent with the specialist setting the price to give some insider (perhaps himself)an advantaged bid. So, the afore mentioned criminality.

Shorting Goldman Sachs is risky, but that is what I am doing right here, a 1/4 position with a stop just above todays high of $171.

Sell short 25 shares GS @ $162.52

Stop @ $171.79


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