Gekko Rocks

And he was so right. Greed will save the USA

Bears.....You are Dead To Me, Dead I Tell Ya!

The title line of this post pretty much sums up my feelings regards even the slightest possibility of halting this current market rally short of 1050 or so on the SPX. Even on a sleepy summer Friday after sliding in excess of 150 pts on the DJIA on less than rosy Consumer Sentiment Numbers the bears exited the field early and the day ended barely nicked with a loss of only .8% The market now is an absolute Juggernaut certainly not to be stopped during the sleepy dog days of summer.

The one thing that concerns me is the Over lopsided short dollar trade. Everyone including my feckless receptionist who also noticed the overly lopsided looming bearish head and shoulders patttern of about 2 week ago is short the dollar. I even recall reading that one of the Victoria Secret Hotties demanding pay in Brazillian Real. When it is this obvious it usually is not recall crude oil at $140+ obviously going straight to the sky? A strengthening dollar would derail this market pronto. I have not come up with my catalyst yet for this but it is high on my research list.

We have gotten very lucky here at AEIG LLC, on our last couple of levereged directional calls, which I blogged earlier. I am thinking we coast higher into the end of summer, what lies ahead is opportunity, as this market could be a real snapper to the upside fueled by the underinvested and late to the party retail crowd, or a repeat of last fall. I do not feel it will be some where in between, only one of the extremes.

Good Trading

Ex

Rretrace Thursday

Just a quick screed tonight. Wanted to get this out lest I seem disingenuous and post it after the fact some time tomorrow. Yesterdays swing long into the close in NQ_F worked out with almost frightening success. Historically the day after Fed day is a retracement. I am thinking today's move was exaggerated to say the least, based on no real substantive news and the close was telling. Flipped the same NQ_F position short for tomorrows expected blood bath. I am thinking I win on this one too!

Just recently finished watching Bed Time Stories with the little gladiator twins. A fine movie all around, rarely go wrong with an Adam Sandler flick. What struck me was that the final score was I think I am in Love by Eddie Money and the little Gladiator Twins knew Every word! This would be a testament to the time spent in transit to a very active little life with Mrs Gladiator, and a narrow selection of classic 80's pop always blaring. Now Eddie Money and Rick Springfield et all are fine, but I am trying to raise little Gladiators. Hence the Above. A more active role in the musical proclivities of the precocious two and a tutelage of the finer points of Angus and Tawny Kitaen shaking her money maker on the hood of a Jag will begin henceforth.

On to the markets. As I run a very eclectic total return portfolio for qualified individuals, based roughly on an adherence to absolute return market timing, and worshiping at the house of what is working right now, I could not be happier. We nailed the failed beak down weeks ago and have been long and leveraged since. What to do now is the question of the day. My proprietary giddy Bear indicator tells me there is still much more upside ahead. Combine this with the vast majority of under invested long only portfolio managers who will chase this market higher in the low volume dog days of summer and I see S&P 500 at 1050, an important technical number sooner rather than later. Shortly after that, well that is a different story. Swung hard long after the close(disclosure long NQ_F)in anticipation of benign news out of the 2 day Fed meeting tomorrow. I bet I WIN.

Good Trading

EX

Like it is 1999! well not so much

In Jobs we trust.

AAPL the one company who wrote the book on sandbagging, crushing earnings and then guiding down again, knocked the proverbial hide off of the ball, by any stretch of the imagination, best non Holiday 3rd quarter in memory, and offered positive guidance! 2.6M Macs beat street estimate, 5.2M iPhone vs 4.8M street estimate, 10.2M ipods vs 10.5M street 2 out of 3 and we we will take it!

And this is where it gets interesting again, do we get the push to 1050 on the ES? The Investing Gods have smile dupon us here At AEIG LLC, http://bit.ly/c8KZd having followed this to a tee it feels good!

I am thinking things are setting up for the mirror image of the bear massacre of last weak on the failed breakdown of the head and shoulder pattern, and flings us back into the May June range. With the major indexes up almost 9 days n a row, some retracement is due immanently The animal spirits are too prevalent on both sides for this tape to be settled in either direction. Lots of frustrated exaustion is needed first. Trade the tape you get not the one you want!

Good Trading

EX

This is where it gets INTERESTING

Perhaps Hank Paulson should deliver the above line to our showboating leadership on the hill

Right on cue the BULL is back! So sports fans how high do we gun this market? As predicted the over obvious bearish head and shoulders pattern failed in spectacular fashion today emboldening the late to the party bull crowd. The dumb money, retail, late to the party, long only faction is now tingly and fully engorged. Can we look back to this time last year when the emotions were running exactly the same, all was well...... and ran into the abyss! Earnings season should rise above the lowered bar expectations, and goose us right into the fall. Perhaps some hesitation at the previous high at 956 and a tantalizing whiff of god forbid S&P 1000. This is when the head of the feckless long only crowd will be fully ensconced in the guillotine, once again. I am calling for a choppy upwardly biased summer, and then the END! For those wiling to make a stand and be flexible, it is truly days of Wine and Roses. Trade the tape you get not what you WANT.

Good Luck

EX

HOW MUCH DO I LIKE THIS MARKET

NO ONE GETS OUT OF HERE ALIVE, NO ONE(excepting myself!)

This market is a dream come true for those willing to do the home work and spend the wee hours in front of the charts. As I look back at this post http://bit.ly/c8KZd, and more importantly the fact that I followed it to a tee, with leverage for myself and client accounts, I am damn near ready to start in on a six pack of Natural Ice Before 4pm today!! If I was not so humble I would raise my fees, just kidding! Lets see where this ends up, I think I will take a late lunch scalping, but I am thinking this is as big a trap for the bulls as the over obvious H&S was on the bottom. Give this tape a week or two to whip up the animal spirits of the long only crowd before BABOOM. Good luck and Good Trading, I have some Natural Ice to Kill!!

I see you stand like greyhounds in the slips!

Once more unto the breach?

Not just yet my friends. Oddly enough on the way into the office today, my receptionist, who only vaguely knows what I do professionally, mentioned the imminence of the confirmation of the Head and Shoulders pattern playing out on the major indexes. When it is that obvious it usually is not. No doubt a series of powerful body blows has been delivered to the ever annoying green shoots crowd. God knows they had it coming to them. Funny to think that Dennis Kneale of CNBC fame may have ushered in the great retracement of 09 with his end o recession rants of late!



It would appear the neckline of the classic bearish pattern was penetrated.. on lower volume however. Some would argue that a target of 800 to 810 on the S&P is imminent. I feel however that a good deal of support exists at 875, an area of key resistance on the way up, which will now act as support on the way down. A gap down on Wednesdays open could set the stage for a dramatic reversal trapping a lot of late/lazy bears, leading to a squeeze and run to 900 to 905. I have long been calling for and investing for a test of the very area we are now at. I have been fading this drop and adding small longs into today's close. Futures eerily quiet as of now, tomorrow should be epic, good trading!

Credit Rating Agencies..this is the last straw

This gem just in http://bit.ly/vTok8. Now they have gone too far! Many believe, this author included, that the credit ratings agencies are one of the biggest culprits in the great credit crisis and crash of 08. AAA credit ratings were handed out like beads at Mardi Gras. Wall street did not even have to lift its shirt, just keep a stream of lucrative payments flowing. They were paid fees by banks who sometimes pressured or shopped around for the most favorable risk assessments, an obvious conflict of interest. Enron, remember that now quaint little scandal dwarfed by today's affairs? Enron was rated AAA days before going bust. AIG, Bear Stearns, Mortgage backed Securities, Banks laden with derivatives of every stripe and color, all handed superior if not the highest ratings. Then after the crash when down grades of these very institutions led to the need to raise capital at a time when it wasn't available only exacerbated the issue and lead to the markets death spiral that was last fall and early 09. Now they have set there sights on the Mother Land, the Emerald Isle, the once Celtic Tiger. In all seriousness, a sovereign downgrade to Aa1 with outlook negative leading to more cuts is a very serious matter. Much of Europe particularly the former eastern block is in similar if not much worse shape. Seeing as to much of the developed world moves in lockstep economically this situation does not bode well for the green shoots of optimism crowd.

A much worse than expected NFP report on Friday lead to a greater than 2% slide in the S&P 500, with a close below 900 and the 50 day moving average. Stunted holiday volume was the only savior on the day. As I have mentioned many times recently, a date with 875 is imminent. I surmise the level will hold and launch into another failed run at 950 on the index over the mid summer. For those with the ability to analyze, and act, this is actually a great time to be in the markets. Happy 4Th and good trading!

Can of Whoop Ass on Chairman Bernanke

The esteemed Chairman should really have a Col. Jessup Moment Here!!! Congressional nitwits. The truth, I am thinking a lot of skulls were cracked in the name of preventing a cascading down fall of the entire financial system!

Regulators crack down on Twitter...Good work Guys

It gives me tremendous comfort in knowing that in the middle of the worst bear market in several generations, the Regulators, have focused there laser sharp acumen and powers of enforcement on the insidious evils of Twitter? You read that right, tweeting advisers are now under the microscope of the SEC and FINRA. Great Work Guys. A generation of Wal Mart greeters has just been created due to market losses incurred in compliance approved investments in retirement accounts. These same regulators, through botched policies and favoritism of a chosen few too big to fail institutions are complicit in sending trillions in retirement savings to money heaven. In the wake of Bernie Madoff incinerating billions from rich and poor alike, and Sanford Investments doing God only knows what malfeasance he specifically committed, 140 character dispatches seem to be the appropriate place to focus. I think I had best let it rest at that, lest I prematurely launch into my upcoming Magnum Opus on the failure of the entire financial advice machine, the regulators, credit agencies, et all in actually doing there job. I hear a glass or two of Shiraz calling me. Pssst...... Hey FINRA, you dont scare me....... Bring it ON, blue horse shoe likes Teldar Paper!

Pull those pistols Bulls or whistle dixie!

One of the all time classic movie one liners. Far and away better than the "well do you feel lucky punk" of Harry Callahan Fame. But the line is very telling for the current tape. If the oft quoted "green shoots of optimism" crowd is so full of conviction for much more upside, now is the time to pull the pistols. 890 on the SP futures is a big pull back from the double top of 953. I am with the outlaw Josie Wales and getting plum mad dog mean and girding for a slide to at least 875, followed by a feeble grab for the holsters by the Larry Kudlow Crowd back to 915 before the whole can o whoop ass gets unleashed over a long hot summer. This is just one players opinion as he struts and frets his hour upon the stage, should the situation change, so will we. Stay nimble and good trading, comments appreciated.

Twas the best of times it was the worst of times

It is amazing how many times these days when I let people know what I do for a living I get a pained look of sympathy, as if the beloved family pet had just fallen victim to the tires of a front end loader. When in fact now, right here in this moment in time is one of the absolute best for an adviser with the fortitude to have an opinion, and make investment decisions, to be in the business in my 15 year tenure. I sometimes explain it crudely that if one runs a muffler shop and ALL the mufflers in the country suddenly crapped out, you would be printing money replacing mufflers. Today we find ourselves perhaps half way through(there I go again with an opinion) the second market meltdown in 7 years, where property values fell right along with financial assets, and people are crying out for real advice and leadership. I feel that 99.9% of the financial advice machine are useless posers, at best gathering assets to feed a decrepit and collapsing system, with little concern for clients and even less knowledge of how to actually advise and make money. At worse, well they are.......worse.

I am convinced that we are in an era where allowing mindless asset gatherers to hurl your future at some cookie cutter product under the guise of Modern Portfolio Theory, is the road to sure ruin. What will be successful is actually advising. Buying equities when others are crying and selling when others are joyous. There will be times when one wants to own gold, and heresy
I know, but sell or actually short gold. Bull and bear markets will present themselves in commodities and currencuies and fixed income and foreign stocks, and for those who remember they have a pair, and can catch a piece of any of the moves, you have the world on a string. For too long as a nation we confused brains with a bull market, and it has come home to roost.
As I find myself competing against a pack of phonies in suspenders and multi colored shirts, I could not be happier to be in this business. Dont cry for me. So here is to us and those just like us, damn few left!

My friday morning cocktail napkin analysis of the market action, which I posted before the open, proved to be shockingly prescient. As I mentioned, quad witch days are best sat out, which is what I did. Our date with 875 on the ES will come sooner rather than later I feel, time to lead advise, and make money. Good Trading

Kim Jong Il take this!

Reports are that the USS John McCain making a full head o steam at flank speed to intercept rogue N korean freighter carrying banned missle or nuclear materiel. Tin pot dictators never learn! Perhaps Kim should puruse U tube for videos of the last moments of Sadam, His compatriot in the axis o evil, on the Gallows ! Go get um Navy!!

The many faces of Sybil

Apparently now the feds have decided to force brokers and other advisers to act as "fiduciaries" or actually in the best interests of clients http://bit.ly/z24ZA . Previously most commission based brokers although now called advisers are held only to a suitability standard, for example don't pitch Chinese solar stocks to widows and orphans. On the surface sounds great no? Essentially it is a bunch of rubbish. Without a doubt it would nullify much of the rubbish put forth from the financial advice cartel. Under the guise of "you cannot get sued for doing nothing," this will further duilute down anythng offered out of the financial advice machine to the point of putting forth little more than index funds, for a giant fee albeit. The trend of the last 5 or more years out of the financial advice mafiaso, is to have fewer advisers with gargantuan asset bases, operating on volume and low margins. This type of regulation I feel will further exaceberate that distressing trend. I am of the firmest opinion that to have even the slightest chance of success investing in the next 10yrs years will require advisers to actually ADVISE, shocking as that may seem. The utmost in creativity, activity and alternative thinking should be the order of the day. Herding investors of every stripe and color into the blandest cookie cutter products is a recipie for a lost TWO decades at best. A for effort Washington, D- for execution.

Quadruple witch Friday, one of my favorite days in the market, for doing absoluteley nothing. Sensless volatility will rule the day. My gun to the head guess is we jam the ES to about 923 to shake out any shorts, run it back down to about 911 and close flat at 915. As of this am we are doing exactly that. I think we have a date with 875 for the broad index in the nearest future, let us see how it plays out. Good Trading!

Cold War Angst

Rudiarius

I had to take some time off from the blog as I went through the mascinations to fully extricate my self and my practice from the financial industrial complex(more on this later for sure). I formed my own RIA, hauled over all my clients and then a righteous slug of new $$, and son of a bitch does it feel good. Master of my domain! Now fully able to operate in the best interest of my self and clients, I intend to continue to thrash the pee out of this market. In the words of Colonel Frank Slade Whooo Ahh!

The markets? I think yesterday was a seminal turning point in recent action of this tape. BAC successfully jammed $13.5 billion of a dilutitive secondary down the throats of most likeley feckless retail types. That out of the way, the market promptly turned tail and began a fairly aggressive higher volume retreat. The release of the FOMC minutes indicating all the green shoots are perhaps in some serious need of a dollup of turf builder and a month of gentle rain, seemed to exaceberate the the selloff. The weekly jobs report this morning indicating a stubbornly high continuing unemployment couldnt be spun into anything remoteley positive and the markets are off a good 2%. I feel 875 on the S&P will be trench warfare as far as the tone of the markets over the summer. It is unfathomable that almost no one even mentions the possibility of a serious pullback if not an outright retest of the march lows. As the markets seem to move to confound the most participants, a moon shot to 1050 or a death spiral back to sub 700 are the most likeley outcomes, I feel. An orderly low volume pullback to 850 followed by a pre ordained resumptionof the rally is too text boook/fairly tail for my tastes. In either event, I see a lot of movement ahead from which to profit.

In Memorium

Say it ain't so! My hero and Citigroup Slayer extraordinaire, Meredith Whitney, actually turning ever so slightly less negative, dare we say tactically bullish on the banks. What has the world come to. Citigroup recommending shorting themselves as I penned in my last post, and the woman who pulled back the curtain on the toxic sham that has become Wall St goes positive, Zut Alors! She actually may have a legitimate point. As those corporations and individuals of sound judgement and financial temperance are being fleeced in a grand way to prop up Zombie institutions like C and BAC, it is hard to see how they might not get a temporary pop on less than apocalyptic earnings. Being able to borrow at effectively 0% interest form the taxpayer, and lend at more, it is not hard to make some short term money. The bigger picture I am convinced is a lot uglier.

Not to oversimplify things, but institutions and individuals of every stripe and color bankrupted themselves in an orgy of debt fueled speculation. That capital has effectively gone to money heaven, it is a zero sum game. All the fancy sounding programs from the Fed and Treasury only serve to temporarily prop up corpse like individuals and corporations, at the expense of the prudent and sober. I believe and I am not alone by any means, that Commercial Real estate is the next cataclysm that is already unfolding. Bostons iconic Hancock Tower recently sold at a distress auction for a full 50% hair cut to what it sold for only 3 years earlier. As unemployment continues to rampage, business cut back, and retail suffers and heads into bankruptcy, the prospects for over leveraged mall and office property owners, in this capital constrained environment, is not pretty. After an almost un abated 25% run from the bottom of 666 on the S&P 500, prudence if not a strong tilt to the down side is in order.

Go Long the FInancials, REALLY LONG LONG!!!

Though this be madness, yet there is method in 't

$C citigroup just the other day came out with the bold call to essentially sell short Citigroup, themselves!!

March 31 (Bloomberg)Investors should buy put options on financial companies because derivatives-market trading suggests the industry will retreat after a 43 percent surge since March 6, Citigroup Inc. said.“Despite the rally, credit and option markets are pricing in increased downside risk,” New York-based Citigroup strategist Alvin Wang wrote in a note sent to clients today.He recommended puts giving the right to sell the Financial Select Sector SPDR Fund, an exchange-traded fund that tracks a basket of bank stocks, for $8 before May 15. The XLF, as the ETF is known, added 5.5 percent to $8.81 in New York, bringing its gain since March 6 to 43 percent. The May $8 puts fell 25 percent to 70 cents today.

My opinions on the Deathstar that is known as Citigroup are fairly well known. In my long association with Smith Barney/Citigroup I generally did very well taking a diametrically opossed view to anything they advised, which is what scares the hell out of me with this call. I have been dubious to put it mildly of the run up in financial shares of the last 3 weeks. This call has me wanting to buy out of the money calls on the financials. Perhaps, 12 to 16 months ago, prior to the financial holocaust, this gem from Citigroup might have been useful, much less so now. (editorial note, I went short the financials at the close today, and I am scared)

Tomorrow is the BIG day. The Labor Dept reports Non Farm Payrolls, sure to be a complete nightmarte of job loss and despair. Anything less than the "whisper number" of about 750K jobs loss will probably be celebrated as a generational low, and a tripple buying opportunity. I am thinking this rally is running on fumes particularly in the financial area, Friday should be interesting.

Plunge Protection Team, Black Helicopters, Etc.

I thought I would take a moment to Address the wide spread myth, nee belief in the Plunge Protection Team, and work it into yesterdays tape. The PPT is a growing myth involving a group officially known as the Presidents Working Group on the Markets. Set up after the big one in 1987, it exists as an advisory group to the president on the financial markets. Unofficially it has the duty of intervening in the open markets in the event of a cataclysmic one day drop in the markets, maybe. In the insane tape we have seen over the last 12-16 months dozens of terrifying market plunges have mysteriously turned around very late in the day, to erase gains and even turn the market positive, with no apparent reason. This phenomena leads many, especially dedicated short sellers to believe some shadowy federal organization is organizing nefarious bull raids to save the markets from destruction. As I am not a fan of black helicopter theories, I see this as the rantings of not so nimble short sellers who have had there profits taken from them, when they took there eyes off the markets momentarily.

Yesterdays tape and how I traded it explains a lot. Seeing the market yesterday morning attempt on several times to make new highs and failing right at the previous days highs, I initiated short positions at about 1100 am est. My instincts proved correct and the market continued to drop steadily til about 2pm. Some time in mid afternoon having built up substantial profits, and not wanting to risk them going to this mornings release of GDP and Continuing Jobless Claims, i covered my shorts and felt quite swell about my self! Covering shorts involves buying back previously sold shares, giving the market somewhat of a bounce. I can assure you minds far greater than my own with laughably larger account bases(read Beeeelions, mwha ha ha ha ha) executed exactly the same strategy, multiplying the effect. At this point I was done for the day doing the happy dance. I suspect sharp bulls and even sharp bears realized this phenomena, and bought into it, magnifying the squeeze. Voila! the PPT. If the Govt could really organize such a trick, COULDN'T WE SOLVE THE ENTIRE BANKING/ECONOMIC/BUDGET DEFICIT/WORLD HUNGER/AND THE BATTLE OF THE SEXES, BY SIMPLY SPECULATING WILDLY IN THE FUTURES MARKETS(since they know when they will successfully manipulate the markets), BOOK HUGE PROFITS, AND CALL IT A DAY? It is not that easy sports fans. This mornings release of the GDP numbers and Jobless claims at 820 EST, should set the tone for today's trading, good numbers should send the market scalding higher, let's go get em!

Make or Break for this Bull

I always root for the badly out gunned bull in the Spanish bull fights. I take great pleasure in seeing the exhausted and battered Toro deliver a horn to the ass of some Fop matador prancing for the crowds, and tormenting this majestic animal. Having done exceedingly well in the bear market that engulfs us I am hoping to not get similar treatment. "You mess with the bull you get the horns"

Today should be a critical day for the markets recent meteoric rise from the lows of 666 on the S&P 500. The major averages are flirting just above the key 50 day moving averages, which could act as critical support and a place for the bulls to make a stand. This mornings release of Durable Goods Orders at 830 am EST and sales of existing homes at 10 am EST, should provide the cues for today's action. More importantly I feel that the market is now going to be forced to stand on its own. The federal govt, the Treasury and Federal Reserve have taken massive, heroic efforts to revitalize the markets, but all the cards now seem to be on the table. Should we falter here I fear it is time for the doctor to enter the room and inform the patient it is time to get his affairs in order. We are heading into earnings season which should be the ultimate arbiter of corporate health. Gauzy assurances from CEO's of dubious credibility will be put to the test with actual earnings numbers and official guidance. Should earnings season prove ugly, and March employment numbers due out on April 3rd continue to disappoint, we could be in for another horrific plunge to retest the lows or worse. As mentioned earlier I feel an orderly pull back to 710 or so on the S&P, would be healthy and a great area to deploy some capital on the long side. Yesterdays orderly descent fits into that scenario. Lets try and trade the tape we have, not the one we want!

Quadruple Witching

When Churchyards yawne, and Hell it selfe breaths out Contagion to this world” (Hamlet).

(the above quote links to a cool vid of Courtney Love and Hole doing a cover of Donovans Season of the Witch, something to get the blood pumping on this busy day)

The above description above could aptly describe the trading environment of the past 18 months. More closely I chose it to refer to Quadruple witching. Today sports fans we have contracts for stock index futures, stock index options, stock options and single stock futures (SSF) all expiring. Traders delight or despair, depending how your performance has been YTD! Personally i would love to just phone it in and rock out to a scantily clad grunge queen, but this is not to be.

As noted earlier Chairman Ben Bernanke left interest rates unchanged, yet launched an aggressive asset buy back program. In a nut shell he is going to inflate the currency, in an attempt to jump start the economy one more time. This seems like a page taken from a South American Banana republic, and most likely will also lead to inflation ramping up dramatically. For the average investor this is a good chance to refinance the old ranch one more time, and put a few more dollars in your pocket every month. The major indexes lurched upwards on the news, failed at serious overhead resistance, and sold off rather briskly yesterday. Cant say as I have had too many shower celebration moments lately. I faded this rally earlier than would have been perfect and am now positioned rather bearishly, and uncomfortably so. I don't like hoping the market bails me out. A healthy correction to around 710 on the S&P on LOWER volume, would set the stage for a more healthy resumption the recent upward move. As it stands currently, this has all the halmarks of a suckers rally. Led by broken financials, and empty comments out of disgraced CEO's, a lack of real volume, a pullback is needed to get me on board for any further advance.

I generally pen these missives early in the morning, sort of as a traders journal for myself before the open . The other morning I was interrupted by one of the little gladiator twins. Seems he had a tooth desperateley in need of removal, but was somewhat hesitant to deliver the coup de grace to the wobbly fang. What a scene! Despite my extortions of Virtus et Honor! much wailing ensued. The fairy did deliver a pair of nice Susan B Anthony's however.

I know what you're thinking. "Did he fire six shots or only five?" Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

Fed day. At 215 pm today the FOMC will release the results of their 2 day meeting. Bulls should be asking themselves if they feel lucky after the recent blistering LOW VOLUME run up from the lows of S&P 666. In case anyone is wondering, Chairman Ben Bernanke has fired all six shots. The Fed Funds rate is at .25%, click, click, out of bullets, and the 18 month old bear market seems only to smile right back at him. The only tool left is "quantitative easing", the equivalent of pistol whipping with the empty .44 Magnum. Seeing as how rates can not go below 0%, hopes of a further run up in the equity markets hinge on comments(read talk is cheap) of further expanding the fed balance sheet and buying treasuries and other assets. Should the fed or treasury print any more money, stock up on wheel barrows, you will need one to bring all that cash to the store and buy 1 loaf of bread, as inflation will soon run at levels only seen in Zimbabwe or Wiemar Germany.

Had another Good Fellas moment yesterday. Sold shorts into the early morning weakness, only failed to capitalize on the afternoon run up as I had mentioned yesterday morning. The stink was too great for me to bear and I chose to fight for neither side and remain on the sidelines. It should be a real snooze fest until the fed announcement, then fireworks either way.

Bad day for the Financials!

My hero Meredith Whitney, Finnie slayer extrodinaire, has an hour of face time on CNBC. Visions of Ken Lewis $BAC and Vik Pandit $C drinking copious ammounts of GREEN bleach!! Here is to a big gap down at the open, Thanks Meredith!

Erin go Bragh!

"May you be in heaven a half an hour before the devil knows you are dead"

Irish proverb



To all you barbarians and others not so blessed, it is your lucky day, because you are all Irish today! Tomorrow is a different story, so make the most of it. Amidst a holiday known in large part for imbibing and general frivolity, I cant help but think of the greatness of the simplest of folks(of every background) who crossed an ocean in steerage, armed with little more than a dream and made this country great. It gives me resolve in difficult times like out country now faces, to think such stock still runs through our national make up.

As I watched yesterdays positive open fade to red I could not help but feel like Ray Liota in Good Fellas. The scene where he is celebrating in the shower after learning of the success of the airport heist he had so meticulously planned. Alas 5 in a row was far too much to ask of a rally built on little more than a temporary oversold condition and fluff out of some miscreant financial CEO's. Eerily enough in the last 12 months we have had 2 other explosive rallies of 9%, in October and December, and both were stopped cold at the 30DMA, which is right about where yesterday's Bi@#$ slapping occurred. A healthy dose of down side follow through this morning and an intra day reversal to the upside would make me a very happy Leprechaun. Either way lets strive to pull profit from whatever the tape hands us today.

Off to drop a tough briny slab o beef in the pot for hours of simmering, add in some potatoes, and cabbage, and you have the food o the gods!

Chuck e Cheese

Took the little gladiator twins to Chuck e Cheese this weekend. They apparently had a good time. Strangely enough I seemed to be the only adult male or female not sporting a tattoo on his or hers neck or throat! There is a God however as I learned they served draught beer in hearty 16oz portions!

Fed Chairman Ben Bernanke conducted a rare interview on 60 Minutes last night, conducted himself admirably, and gave the impression of a steady hand at the wheel.

To the markets, a busy week ahead. Housing starts, PPI, CPI, and a Fed meeting, will drive the tape. More importantly is weather this recent bounce is the one, or just another failed bear market rally. Volume is the weapon of the Bull. In this recent advance, volume has been acceptable but not spectacular, and each day of the advance is on less volume than the last. An 8% rise on middling and declining volume, sparked by gauzy comments out of broken financials, inspires in me less and less desire to hold my dwindling long positions. Should we continue at this pace, we are just setting up the equity pins to be knocked down by the bears.

The most recent bear plunge that is seared into my memory is the Tech wreck of almost a decade ago now. This grueling event lasted a full 31 months, The basis of that sell off was essentially the bursting of an overheated tech/dot com bubble. This time around the underpinnings of the sell off, a real estate/banking/credit crash seem much more severe and we are only 18 months into this plunge. Either way it shouldn't matter as we always strive to fight on the winning side in this arena, but it is something to look out for.

Perhaps in honor of St. Patricks day, futures are looking very green this morning. Fading a Monday morning gap up on day five of a dubious stock advance... easier money than walking into a bank branch with a mask and a gun!

Is that the best you got?

Is that the best you got?

For all the bluster out of the Bull pen heralding the arrival of the bottom and the next big run up, DJIA + 3.91 pts or .06% , on substantially lower volume, is the best follow through we get? A tape where the high of the day is reached 20 minutes after the opening followed by aimless churning and a steep sell off into the close leaving us fractionally positive, is the validation? For all the failed long only "professional" money management types doing the bottom is in happy dance over the last few days, that was "IT" I think that Bruce Springsteen said it best in his 1980 album The River, I don't wanna fade away Oh I don't wanna fade away, but fade is exactly the order of for the day for this market. With numbers on Initial Jobless claims due out momentarily, and it is doubtful they will be benign, lest we get a Bernie Madoff conviction rally, or some fireworks out of the congressional hearings on Mark to market accounting, I predict pain, pain. I have gone longer over the past week, my inclination is to round up any profits on the long side, and leap back to the warm familiar embrace of the 3 bears. Here is to hoping I am wrong!

UPDATE 1 915 AM EST.....GE rallies on S&P downgrade, phew only to AA+, retail sales crushed, but less than expected and continuing un employment claims print a record high. This is starting to have all the hallmarks of a world class suckers rally, Treasury Secretary Geithner should announce resignation immediately if we want to have any hope of follow through.

Cry Havoc and let slip the dogs of war!

Cry "Havoc!" and let slip the dogs of war, That this foul deed shall smell above the earth ...


The lines above from Shakespeare's Julius Caesar sort of sums up how I feel in going very long and participating in the apparent rally we find ourselves in. However I think it is critical to enter the markets every day with the demeanor of a mercenary in the Belgian Congo, fight for the winning side. If you have taken even a passing glance at my earlier missives one might surmise that a) I am very doubtful :"the bottom" is in, and b)my admiration for the Big Red Frown(aka Citigroup) is somewhat lacking at this point. Ergo any rally led with the giddiness of pundits stepping to the plate and pointing to the left field bleachers, and worse by piles of headlines proclaiming roughly "Citigroup chief says all is well......back in the water kids", I am going to have a hard time with. That said we are coming off of deeply oversold conditions by any measure, and god knows we have rallied on worse. Remember the "Tim Geithner" rally commencing late on Friday the 21st of November of last year. That now comical moon shot gave us a gain top to bottom of over 20%. Some technicians would say that qualified as a new bull market. We know how that ended. Chatter regarding the re reinstatement of the up tick rule is little more than face time for the cameras for Rep Barney Frank. Pricing in decimals and the explosion of ECN's really negate any lasting practical effect it will have.

Futures looking decidedly green this morning, let us see if we can get some follow through here. I would love to think I could take my eyes off of the screen for a few blessed moments and let leveraged long positions ride for a bit. Here is to fighting for the winning side!

Death Star

Amongst the biggest of the awful ironies of the current financial crisis we find ourselves in is the case of Citigroup aka Shi#*%Group, or the big red frown. Repeated, earnest, and desperate attempts are being made to save this august(cough, cough) financial institution. My rough cocktail napkin figures put the taxpayer dollars sunk into $C currently at approximately $45,000,000,000, yes that is BEEElion with a B. The wire services are reporting early this morn that Vic Pandit is now Confident on capital strength! I would like to thank god for small miracles, but similiar assurances out of AIG(death star twin) keep coming to mind

What is so ironic is that prior to the current calamity, a long list of state and federal regulatory and compliance organizations were going to great lengths to punish, fine, censure and otherwise slap a newspaper across the nose of Citigroup. Do Enron, Worldcom, research scandals, or Jack Grubman ring a bell? How about the "Dr Evil" bond traders, this is where a handful of Citigroup bond traders manipulated/crashed the Euro bond markets for some monumentally small(read chump change) amount of profit. The Japanese government revoked the charter and of and ejected the Citigroup private bank from the country for various and sundry regulatory and compliance scandals. How about the Federal Reserve barring Citigroup from any acquisitions or deals, until they cleaned up there morally handicapped outfit.The very reason that the much maligned Chuck Prince, the career attorney and corporate counsel was installed as CEO was to clean up all the legal mess and save C from corporate capital punishment. I don't think I have the band with to detail all the various transgressions. Yet as of this writing round the clock efforts are being made to save this Firm! The irony is almost too rich for words.

Futures pointed decidedly positive this morning, perhaps this is the start of the much heralded rally. God knows I cherish the thought of luxuriating in the pleasures of $SSO for more than a morning, I am just cautious to bearish about the viability of any sustained rally at this point. Stay nimble and lets carve some profits out of the market we have, not the one we want.

Nice Bottom.....NOT!

Sorry Sports fans, but in the humble opinion of this simple country speculator, the bottom is definitely not in. As ugly, and at times physically painful as it is to see the beloved markets plumbing such ghastly depths, the sentiment is far too giddy and hopeful for any meaningful bottom. One market economist from a respectable enough investment house had quite a run on the cable outlets calling the bottom last November. CNBC even named it after him, and tracked the Google rankings. Alas the market violated his bottom in a fashion that would make a mother cringe and look away. Strange, we hear much less from him now. Notable short sellers have now taken up the task, some even calling it to within a 48 hour window! For what it is worth the bottom will come when all the breathless anticipation is nonexistent. We will bottom when the sirens on the cable networks stop looking for it, and announcing that we are off our worst levels of the day. We will have a bottom six or seven months after retching at how ugly the tape is, gives way to dry heaves and ultimately the very sore stomach of apathy. A couple months after no one cares anymore is when it usually happens. Till then, embrace this volatility.

We might get a welcomed bounce this coming week. Behold the thermo nuclear weapon of the bull camp, suspension of mark to market accounting. Our feckless leaders on capitol hill will be mugging for camera time whilst supposedly pondering the idea of letting our nations banks and investment houses mark to fantasy, balance sheets groaning under the weight of worthless assets. The mere suggestion should give us some upward momentum. Actually suspend or alter FA SB 157, SHAZAM, 2000 DOW points before you can even max out your margin account buying a 3X leverege financial ETF, helooooo $FAS! Stay nimble and lets see if we can carve some more profits out of the market we have.