Tuesday, March 10, 2009

Follow Through Is Everything

Congrats to the bulls, you were long over due. The question now is will it follow through tomorrow and empower the bulls even further? The markets had a huge upside explosion from the get-go, ran hard all day, pulled back late in the afternoon but held support, and then came on to close at the highs for the day. The technicals on New York, in particular, were exceptional with a 90% plus day. Advance-declines were 2920 up and 225 down on New York, and 23 1/2 to 4 1/5, or about 5 to 1, on Nasdaq. Up/down volume was 2.1 billion up and 78 million down on New York, a ratio of about 25 to 1 or so, on total volume of 2.2 billion. Nasdaq had 2 1/3 billion up and 120 million down, nearly 20 to 1, on nearly 2 1/2 billion.

The rally was ignited by positive news from Citigroup, Pandit announced the bank has been profitable the last two months. Big whoop if you ask me. Bernanke also hit the airwaves and told us that the U.S. and the world didn't do enough to solve the crisis, and promised that more kitchen sinks would be thrown at the economy. He's on his ninth sink now and Home Depot has just given him a VIP Frequent Shopper card.

Barney Frank told us that he would talk to the SEC about reinstating the uptick rule and said he promised to revisit the discussion on mark to market accounting.When Barney finished speaking, I put away my raincoat and pulled a chart to see what the market did when they implemented the NO SHORT RULE. The chart above shows what the market did in September when the brilliant geniuses told us we couldn't short certain financials at all, forget about on an uptick. The uptick rule may have been effective back in the day, way back, when stocks traded in eights and quarters, it will have zero impact as we now trade in pennies. Just another SEC fail, although it might dissuade short sellers like Jim Chanos from finding the next Enron, which he uncovered way before the pathetic analyst community on Wall St. did. If I ever get investigated I only pray to God that the SEC is on my tail. Talk about a choreographed manipulation to the upside. I honestly don't have a beef with it, they had to do something.

The sell side guys that I know and respect that also manage huge accounts weren't doing much today. I spoke to two of them and one was playing hangman and the other one was doing a crossword. I mentioned this today on twitter, but this in no way should be viewed as a negative, it just means the real buyers (not fast money short covering hedgies) really weren't doing much. If this rally can follow through, that will change quickly and ignite significantly more buying.

By the tone of this post I think you know that I am always the skeptic, but I do respect Mother Market and I will trade what it gives me. This is probably a bad time for me to wax macro anyway, because the machine wants to rally---for now.

I hope you guys did well today. I was busy with other projects and I did one trade, it was a short--and I lost. LOL


Leonard The Monkey said...

I hope you guys did well today. I was busy with other projects and I did one trade, it was a short--and I lost. LOL

Keeping it real, love it - I know your still up way more then most - still had to try the downside with BGZ today --- gonna have to get you a few drinks and a set of rose colored glasses! lol.

Look forward to the Spartan cry but I wouldn't be too upset if it took a week off :)

snoopyjc said...

Hmmmm. Maybe you should change your handle to "downsidetrader"!! :-)


Jonny said...

It was a FUBAR day, Joe. You didn't miss much really. Just the usual PTB fucking with the system and manipulating their mean little hearts out. I'm curious why they chose today though when everyone was looking at tomorrow? Maybe tomorrow's meetings won't yield much and a soft day today with nada tomorrow was a potential point of capitulation? Who knows? Or maybe the meetings will yield something and they're just after breaking the no two days up curse? Either one makes sense at this point.

Like you said, kitchen sinks.

David said...

How to pump the market up - "losses were less than expected"...

"Even though our company (C) lost billions this year, the past six weeks we made a couple of thousand dollars"....
I promise.... maybe.

I have to say, I'm not a fan of the green day and expect it to fail tomorrow. But I'll be trading what the market gives and if we go up, great, I'll be long and happy. If we go down, not so good, but I'll be short.

Scott Clous, chief Artist said...

thx for the post, and honesty about your loss.

Stewie said...

skf-upsidetrader;-) bro, i agree the uptick rule ain't gonna do squat for this mrkt.

upsidetrader said...

lol, maybe the spartan call will in fact take a quick hiatus, but never fear, the army is resting

upsidetrader said...

lol, prolly too late for that

upsidetrader said...


the quiver is empty and the last sink has been thrown

upsidetrader said...


yes indeed, the bar has been lowered

upsidetrader said...



About Me

My photo
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.