Bear Market Rallies Are Wicked

We were heading down the tubes until around 3pm and the market decided to rally. Unfortunately it was short lived and it couldn't hold on. The financials are a complete mess and I did very well shorting PRU. If the financials go lower and I bet they do,this one could free fall further. A tell for me was watching GS lose its underpinnings, I may post a chart later on GS as one to watch as a short. I shorted some LEH for a small gain after the story hit that they had been shut down from trading oil. I never trade news but this was how BSC started and it ended it up being true. With BSC ,the rumor was that their counter parties wouldn't take their business. MA and ICE are back to form from Thursday and both look horrible. I think MA goes a lot lower. I also shorted some ZION for a small gain but it didn't crack like I thought it might. Trying to fix stockcharts.com, later.

No Turnaround Tuesday

Manic trading for sure. I made 4 on FSLR short, a buck and a half on UYG short on different trades and a buck and a half on LEH. I lost a half buck on COF short, bad timing and I took a call, I blame my wife every time I lose money. Why not, I have to blame somebody. When I was short a little BSC a while ago, it wasn't until I heard from my sell side buddy,who is impeccable, that that contra brokers had shut the window on BSC (if you can't find the symbol anymore that's Bear Stearns) over in Europe- that's when it all hit the fan. I made a little, not the tons I should have made. I could have paid of any debt I ever had with some puts on that one and bought a chalet in Lake Como if I listened a little harder. The financial meltdown was new to me and I never thought it could happen. Lehman on the other hand is not having such problems,at least yet, and it has been a wonderful short. I am out as a short and will keep a serious eye on this one for a strong dead cat ounce. Not yet though, I have to do some more due dilly. The planet is now officially short the name and they have already told us the quarter will suck so it could be a keeper on the long side at the right price. Maybe I'm sentimental because I used to work there.

Timing Is Everything

Lehman pukes up a $3 billion convertible today. I'm starting to wonder more and more if the Bear Stearns panic had been delayed by a couple of weeks, if it too couldn't have worked out a better deal. I worked at Bear years ago and it's sad to see it go the way that it did. Please don't let Ben Bernanke negotiate the sale of my house if I ever get into a jam.

Futures Up Modestly

J P Morgan may now offer $10 for Bear Stearns. Oil off 50 cents around $101. European markets are lower along with the Euro.

We Bottomed

There, I said it. I just can't fight the Fed anymore, way to powerful. I have had a blast on the short side, and made a lot of money, but the easy money has been made and I don't want to be a pig. Of course there will be individual stocks I will short but as far as inverse short funds, it will become much harder to make the easy money on the market indices. Bear Stearns is finished and Lehman and Goldman exploded today on good numbers so I really think most of the bed news is out. Don't get me wrong, we will still see more fallout but the affect on the market going forward should be muted. I would not buy financials here though. They have moved too much in here and we have to wait for more logical set ups. I'm still short USO,even with rates falling I'm taking a shot it pulls back. Gold came down a bit and the metals had a pop. I will look for a short entry on XME soon. How about the 26 point move off the Lehman bottom yesterday. Goldman too. Those are bottom signals if I've ever seen one. Morgan Stanley reports tomorrow.

Could Have Been Worse I Guess

I guess with the Fed saying they will "buy" Wall St. out of any mistake they ever made we should all just be bullish. I had my best day trading in years today and it was all on the short side. Maybe that's a sign we have bottomed. I'm getting tired of analyzing quite frankly. The difference between Fridays close and todays close in my view was because BSC went out horribly on Friday, but today, Lehman went out very strong, about 10 points off its intra day low. The daily ranges on some stocks I traded are nothing short of mind numbing.
My short in USO is finally working and I am starting to think the whole commodity complex is going to unwind very hard ,very soon. What the hell, it has already started. Happy St. Patricks Day to everyone and I will pound some Guinness soon. Catch you later.

Is Guinness plural?

Fed Loans To Non Banks First Time Since 30's

Ominous at best.Watch for Goldman Sachs to surprise us this week. If they pull a fast one here all bets are off. Joe Lewis has now lost about $1.2 billion on his BSC investment. The Fed will do what they have to do, let's hope it's not too late to have an impact Gold is oil are higher here. I will be watching my oil short closely as I still have a little room on the stop.

It Will Be Interesting To See How They Close Em

It's seatbelt time. If the bulls are capable of a strong rally through all this I can't tell you how bullish that would be. The other side is that they just rollover, prompted by more fear that another shoe will drop over the weekend. Stay tuned. I took a great trade on SKF and will look to re-enter quickly if they look like they want to crack again. Bear Stearns has a conference call at 12:30.

Update

I don't have time for the post I'd like to do but I am now short the financials via SKF. I now fully believe the market has enough of a catalyst to test the lows and maybe make new ones. There will be more hedge fund blowups on the horizon in my opinion. When a major investment bank (BSC) says basically that they are out of business it doesn't bode well for market confidence. Rumors are around today that UBS will announce more bad news and rumors that (CYN) City National may halt dividend and is facing a near term liquidity crisis. Stay tuned. Will the Fed come to the rescue and just buy all the bad debt?
How about the President of BSC saying things were ok with CNBC the other day? Can we trust anything in here? Do you want to be long finacials in here? He said liquidity was just fine. How come I heard European banks were not taking Bear Stearns business on Tuesday and Alan Schwartz the President didn't know.?Give me a break.

Taking Apart The Financials

Bear Stearns is down about 8 and the SKF (ultra short financials) up 9 points. Carlyle borrowed about $32 for every $1 they invested. That's great when things are working, but you go out of business when it doesn't. Well, Carlye is going out of business this morning. Gold hit $1000 and oil looks higher, I hope it pulls a reversal as I am still short USO. The KOL short from yesterday is working nicely and is up almost 2 points from yesterday morning. Good Luck

ps spx 15 points fron Jan lows--who would have thunk it

Bear Stearns

I mentioned last night that to me the tell on the financials was BSC, they denied insolvency rumors and the stock still closed down 8 bucks. Today the stock is down because of talk they failed to deliver on a credit payment and Cox from the SEC said that their cash is sufficient. The stock is currently 3 pts. off the low and 10pts. off the high of the day. Let's see what happens this time. About $59.50 right here

Where's The Fear?

What's with the VIX? When we hit the lows in Jan.(so sick of talking about Jan lows) the VIX or volatility or fear index was around 37, it closed today slightly over 29. Can we make a bottom with this number? Maybe but I doubt it. More pain ahead although we are close to a major counter trend rally. I just don't know if they gun it before the Dow and S&P hit the lows. Well, the S&P is four points away and the DOW about 100. Both could be hit in the first five minutes of trading.
A "tell" to me on the financials today was Bear Stearns. Ace Greenberg, the respected company chairman(also Wall Streets greatest living trader imho) denied the insolvency rumor when the stock was down about 5 or 6 points,closed down about $8 bucks. No bid,so don't ask.