Go Figure

OK, the $64,000 question, why is retail (RTH), consumer discretionary (XLY), commercial real estate (IYR), and the financials (XLF), trading like today is your last day to buy stocks? When department stores receive credit downgrades by S&P, commercial real estate is going bust, folks are still not buying Starbucks or 50 inch plasmas and the banks are still broke and may even get broker before it's all over? Shoot me an e-mail, I want to know your thoughts. It really is the old story though, just as stocks stay over sold, they can stay over bought. How many times did you hear back in November and January that we were so over sold and desperately due for a bounce, only to get bludgeoned further like little baby seals. As the pain was unrelenting then, the ecstasy can be equal in duration. No one rings a bell at the bottom, or the top for that matter, and while many of us want to buy FAZ, SRS and many of the assorted leveraged etf's, the market just keeps taking money from the short sellers-everyday. I wrote many times over the last few months that the market wouldn't crash at all because we were in a constant "state of crash." The big capitulatory event never really came, there wasn't a beast tolling the bell at 666 on the S&P. There won't be anyone ringing the bell at the top that is coming either. That's why I try and trade it like I see it and take nothing for granted.

Tomorrow they kill the options and it's Friday, kind of like a silver bullet and a full moon for me, I suck on Friday. I caught GOOG for 14 baloons in the aftermarket today, the trade lasted about four minutes, no way I'm giving that back tomorrow--I hope.

The Financials Go To Washington

I'm just wondering when the obnoxious, daily shoving of big government up our collective asses will start to take an affect on the market. Unless things have changed, well they have actually, the market doesn't like regulation, never did, never will. It's what makes us Capitalists for goodness sake. China is petrified to hold our debt, who cares, where are they going to go? I have some Zimbabwe dollars for them if they keep bitchin'. How about some loot out of the Ukraine or Iceland? Shut up, don't threaten us. Go shoot a missile somewhere, preferably at North Korea.

I told Tim Geithner the other night on the blog that I would be fine with giving him 880-990 on the S&P before all hell breaks loose again and the bulls that hold, will be stung and betrayed for the upteenth time. You know I believe the financials are still on life support and are temporarily benefiting from a combination short squeeze and nonsense rhetoric out of Washington. I said here that it would run for a bit and even called the technical move almost to the penny off the lows. My thought process was that it would run until we got closer to the results of the bank stress tests. Zero Hedge has a nice analysis on the stress test and TARP and frankly he does a wonderful job pointing out what could happen. Global Macro has some cheery thoughts as well, suggesting that the XLF will be Geithner's biggest holding and that the index will revisit the lows. It's a great analysis and you don't have to twist my arm to agree with the thinking from both writers. It's another viewpoint on things, so let me know what you think.

We have the end of the month/quarter coming up real fast, so get ready for all the clueless 24 year old mutual fund portfolio managers to window dress and get long some stocks, assuming they're not buying Timmy's toxic waste over the next few days. Don't forget that first quarter earnings season is coming and the numbers will be atrocious and the financials are close to the results of the stress test, I hear Warren Buffet is on the treadmill right now. And don't forget, commercial real estate is still going to implode. Retail is also getting shortable again and RTH is starting to look like a a porterhouse at Peter Lugers to me again. Keep your guard up and stay nimble. I'll be on twitter with some ideas today. See you there.

P.S. But don't worry, our Senate is hard at work.

XLF --Anemic at Best

It is one of the few sectors that is up, but volume is non existent. I'm keeping FAZ close, just in case. Maybe it can catch some serious wind later, right now I'm a bystander, and trading some individual names from long side like PNC and MTB.

A Watchlist and Some Thoughts

So Many Shorts So Little Time

I have a million of em', but always watch for an oversold rally.

Staring Into the Abyss

In case you missed it, the video above is Rick Santelli from CNBC voicing his opinion on TARP, the housing initiative and the stimulus package. Evidently the market mirrored his passion today as they pretty much sold everything they could. Energy showed some strength, but the toxic beast known as the financials, fell of a cliff and the XLF made another historic low. FAZ was brilliant for me again and unless the financials go zero I just don't know how much may be left for me in that one, although a total surrender of all things equity may do the trick. I've squeezed many pounds of flesh from this one, and next to SKF, it has been the greatest security I have ever owned.

Bank of America has joined his good buddies at the watering hole, AIG,FRE,FNM and C, the most expensive one is buying the booze, but BAC forgot his TARP card so as usual it's on us. I wish I took a screenshot yesterday as I opined that we may never see it at $5 ever again. My constant rant since last summer that COF would be $5 looks to be coming a reality too, amazing times for sure. The financials will soon acquiesce completely and we will know who the survivors will be by the action in their respective stock prices. The separation of the wheat from the chaff will start soon.

Frustrating Action

Here are some names to chew on, I especially like WFC as a short. I believe the dividend is in major jeopardy and I am hearing strong chatter that they will be coming to market for a major cash raise which will be incredibly dilutive. By the way, we are killing them over on Stocktwits, and if your not on the inside, you're on the outside. have a great night. We boycotted CNBC on it today, what a gas.

Sweet Victory !!!!

Nuff said. Be back with some charts later.

The Next Wave Down and More Financials

A few more names to chew on, Bono and Bruce better sprinkle pixie dust tonight at the inauguration party because I don't see anything that saves this beast. Watch my levels. For more sophisticated traders, anticipatory trades (given a down trending day) ahead of my levels can be made. Good luck.

Financials, the Long Good Bye

They may bounce, but maybe not.

One More Time

Yes, the financials again, but when the integrity of our our financial system is at risk of going bankrupt on daily basis, it needs to be talked about. The morning started off horribly, rippling from the news that Bank of America was going back to the well, only a couple of short months after they soaked taxpayers for billions. Strong chatter that BAC and/or Citibank were going to become nationalized over the weekend collapsed bids and intensified the selling. The thought of having one of our largest corporations becoming a ward of the state brought fear to the sector. Suddenly we hit a short term bottom and rallied viciously to the upside, only to collapse again before a short covering rally ten minutes into the close.
Bear market spikes are vicious but the sell off proves how tentaive and fragile the market really is. I'd like to welcome all the new readers and look forward to hearing from you in the future. Don't forget to sign up for my feed and the newletter which gets published on Saturday. Thanks and have a great day tomorrow.

The Financials--Again

My posts are becoming eerily reminiscent of the ones I made almost every day last year, and the financials seem to again be the topic of conversation. I killed them today with longs in FAZ and shorts in GS and COF. But as usual it was mostly FAZ as the banks died again. What's that say about January? So goes the year? We are now down about 800 points from the high made on January 6th. Happening quietly isn't it? Maybe the financial media if finally feeling shame and embarrassment for their incessant idiocy. Never happen. Did everyone enjoy the "Madoff Yule Log" as Rome burned today? Personally, I thought it was riveting television, a definite Golden Globe nominee next year.

Well BAC (Bank A-merill-wide) came back to the teet for more loot. I know, I know, they were in such a rush to buy Merrill that they miscalculated. Give me FREAKING BREAK. SCHMUCKS in the first degree. This comes on the heels of HBC pulling a Greenspan this morning (" I miscalculated) to the tune of an extra $ 30 billion. Getting the picture yet? BAC's dividend is bigger than their earnings. That dividend will be gone by the end on 2009 and the stock will be $6.

I hope you guys are benefiting from the ideas here because it's the hottest shoe in Vegas right now. Have a great night and I will see you tomorrow.

FAZ

Good morning. Futures are down as the market gets ready for earnings season, Oh joy. According to Thomson Reuters the ratio of companies in the S&P 500 that are issuing negative outlooks on earnings as opposed to positive ones for the last three months of 2008 reached 4 to 1-double the historical average. I've been saying this forever on this blog it will get worse and downgrades will begin to fall from the sky. If the market can rally through the coming onslaught of earnings that would obviously be bullish, but I highly doubt it.

I meant to post this chart of FAZ (3X short financial ETF) last night but forgot. The chart looks amazing and measures much higher. This name made me a ton last Friday and yesterday. It has also become my "go to" names instead of SKF, even though the latter is in my longer term account. For day trading I use FAZ. Its not for the faint of heart so use caution.

My Feed and sign up for my newletter on the blog.

The Financials

There are so many charts I could talk about but the one that matters most in my opinion are the financials. I posted this chart Sunday and warned of a break of 11.33 as I thought if that level was breached, we would go lower. 10.44 now looks like the next level of support. After that, well, see you in November(08)

Bounces are part of the deal, and nothing goes strait down, so stay nimble, but this will end badly---again.

C to 3

"I readily concede I chucked aside my free-market principles when I was told ... the situation we were facing could be worse than the Great Depression," Bush said. "(But) we've taken extraordinary measures to deal with frozen credit markets (that) have helped thaw the credit market."--- George W. Bush today


The market opened a giant can of whoop ass on Citi and the financials, and it's been long overdue. They are on their way to the November lows, today was my evidence and if one person tells me it was light volume I will find them. The blog had some levels to watch as potential trouble spots and they broke like egg shells. XLF traded about 102 million shares on Friday and 147 million shares today. There leaving the space again and we are going to make a ton.

My new buzz phrase is C goes to 3. We are only about two points away from the all time low on XLF. Can you say SKF $300? My thoughts on the financials have been beaten to death so I will now shut up. But if you missed my thoughts on 2009, here it is.

Alcoa posted its first net loss in six years and commodities and materials got taken to the wood shed. Who's buying this stuff? Needless to say SMN a 2008 favorite is back on my screens.

I will have some charts a little later, break downs everywhere. I love this stuff.

And remember, people are still looking for recipes not restaurants.

What Will Lead This Market Higher?

Deja Vu All Over Again

I will be posting a couple of my favs for 2009 (first quarter anyway, I can't think that long term) within a couple of days. For starters I think the financials could do a complete retest of their lows and I think IYR is a great short back to its lows. Commercial real estate and financials are just completely doomed to failure in my opinion. More on this later.

What To Do, What To Do?

I'm conflicted as I am a macro bear( not perma) but by the same token I'm not in the business of fighting the charts. If these inverse etf's were regular longs, I would short them. I am speaking of SMN and SKF. The XLF on the other hand looks bullish. I'm misty eyed as I write because SMN and SKF have been my best friends for almost a year. It is getting harder to be short in here, however I do believe after the rally runs it's course we could retest the lows. I am however exercising caution going forward. Things change on a dime and one new piece of ominous news can change the charts. Freaking myself out now, probably calls for a single malt, three fingers. One day at a time.

Kicking and Screaming

That's how the market is reacting to hitting the 8000 neighborhood. At times today it started acing like a magnet to that level but then it would fight and run from the level like a dog running from a shot. The XLF did make new lows but bounced gingerly from the level. It was a green day with the help of SKF, SMN and BTU, but you had to be "wicked" quick as they say in South Boston and I was stopped on trades many times. It's just that type of market right now. The market still stunk today, volume was light but the depth and breath of the market was lacking. The mega caps got a bump but nothing else. Certainly the financials acted poorly. Great get Soren.

I was talking to a trading buddy today who just killed it short today and he said it doesn't matter what the market does as long as he can make money and I said that all I care about is that it's open.

Watching CNBC, what a mook Dodd is. Bloated charlatan.

XLF

I know I mentioned this last night but it's worthy of another look because now it's about 20 cents from breaking all time lows. Some pundits in the financial media seemed very surprised after the close that the financials just aren't leading here. Newsflash, the financials won't be leading anything for the next two to three years in my opinion. If the low on this sector is breached with strong volume in the short term, wondering why the financials aren't "leading the rally" will be the least of our problems. I haven't expected any help from the financials for a year now, but they can muck things up big time on the downside. Watch the level, watch the volume--because the market will follow. Bet on it.