Originally Posted by
waldo29
SIRI has a really good chance of testing its previous lows, just like the rest of the market. Same plan, selling long shares @ 3.65/3.66 break. New twist, i'll be leaving the SIRI hedge from last Monday (@ 3.86) in place due to the environment we are in.
Still long 25 Nov. VIX Calls, 22 strike. Still long Dec. PBR Puts, 7 strike. As I mentioned, every other long position is hedged.
Retest of SnP 1855/1860 is on its way where a minor relief rally should take place. No rally = bad technically. Won't trade it, will wait for SnP 1820.
GLEN and PBR CDS's are parabolic. A lot of bad debt there, that risk has to be priced in to the market (see JNK and HYG). PBR will be the much bigger hit. 90 billion in dollar denominated debt all at risk of default with every tick lower in BRL (Brazilian Real). Brazilian Central bank started selling reserves to stabilize the BRL. Two days later BRL is on its way to testing its lows again. Not a lot of companies wanting (or able) to issue new debt right now in the face of that headwind. Reiterate from what I said in early August, a PBR bankruptcy is a black swan event if it occurs.