Monday, March 9, 2009

Death By a Thousand Cuts

Two up days in a row too much to ask? Evidently, when there is not one piece of good news on God's green earth to make a rally last for more than an hour. Feb. 5 and 6 are still the last two consecutive up days and I'm starting too think I may create a prop bet in Vegas-if it's still open.

My "state of crash" theory is still in motion as things just meander aimlessly to the down side and it does feel like death by a thousand cuts. My current theory is that we could see more market pressure as we get closer to the "stress test" results. Any longs in the market will want to take chips off the table as the possibility of a bad result strongly exists. Uncertainty is a killer and these results will carry much weight. If it is worse than people think, it could open the door for full blown nationalization for more than just C and BAC but for WFC, USB and others. XLF would implode further and it would take the market with it. Just a theory, but I will be watching closely. As far as the meeting on the Hill about mark to market accounting, I have zero confidence that anything will be resolved on that front either, too little too late. Uptick rule? Bring it, the market still collapsed when we couldn't short stocks at all.

I'm still waiting for the rally that will last for more than 90 minutes.


Tony said...

Love the cartoon. Alternative caption: "You mean all this happened because President Obama told Ken Lewis he couldn't go to Vegas?"

Peter Fisher, former Undersec'y of Treasury, now of Blackrock, said that if Geithner had given more details the markets would have sold off even more. Podcast from Bloomberg news:

Point is that it will take more than 4 months to grind through 25 years of leverage and living beyond our means. Deflation works that way.

SSTURN said...

I agree, but I will give you my mustard seeds for a bounce coming soon. In a bull market when all of the "quality" stocks stop going up the only stocks left to rally are the "crap" and the penny stocks. Thats a great indicator that the bull is going to end soon. Technically, that is what we have been seeing since last week in reverse. The stocks that have been down the most in this bear market, energy, financials and reits are trying to dig in, and were all up today. The stocks that have held up the most are being sold, GOOG, IBM, AAPL, AMZN, WMT etc. I am not saying that now is the time to be long. Just that as traders we need to be aware of the market that we are trading in.

Jeff said...

Death by 1000 cuts describes the markets perfectly right now. It is a strange thing, while most people feel "guilty" and tired of shorting the markets, I am still fine with it. I will take a trending market up or down over one that doesn't know where its going any day of the week. Maybe, I have watched Mad Max once too many times. Dreaming of driving my post apocalyptic ultra inverse ETFs till I run out of gas. Petal To The Metal Joe... Jeff AKA Green Thumb Stock

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.