More of the Same

AIG received bozillions from you and me, yet the chatter of an imminent bankruptcy made the rounds yesterday on a report that they have found a way to lose $60 billion. They now have hat in hand for "more" money. Let it die.

JPM, the "bluest" of blue chip banks practically eliminated their dividend yesterday. You heard it all here six months ago as I said all dividends would cut dramatically if not eliminated entirely. Oh, by the way, the ones that survive will still be back for gobs of dilutive capital and I still anticipate all of their credit ratings to be downgraded. Oh joy.

Don't you love the speed with which Washington is dealing with this problem? By the time they announce the next announcement of an announcement, the DOW should be 5000. Keep up the great work, your fingers are right on the pulse guys.

Standoff

JPM just bought the deposits of WAMU and was brokered by the government as reported by the Wall St. Journal. Anyway,today was a beauty and my thinking paid off big time. I am out of all my longs and basically got what I wanted out of this mess. There is still no deal, things are getting sloppy,and it's politics as usual.My biggest winner was STT which just exploded ( check the last half hour but especially the last minute of trading), I was also long JPM, UYG, DDM and SDS. I kept a quarter of my STT position only because of that close.

Tomorrow is a new day and the plot will thicken, but without me. I'll get back in the sandbox when these children figure it out.

What We Know So Far

Bank of America is in talks to by Merrill Lynch at $25-30 and could be announced as early as tonight according to the N.Y Times and the Wall ST. journal.

Barclays and Bank of America have walked away from Lehman and liquidation/ chapter 7 is next. (this could change but I doubt it)

Wamu is still in hot water- will JPM be a white knight?

AIG will be talking about a massive restructuring in the morning.

The market will be off the hook tomorrow---capitulation anyone? Sold to you...

Up and Away-So Far

JP Morgan reported and even though profits fell over 50% the stock and the finacials are indicating higher.Oil is off a buck and the $SPX is up about 15 handles. I have some UYG that I kept overnight and I will dump most or all of it on strength early on. I think the very easy money has been made in the financials, you just don't get 20% moves everyday. You can still make money here, you just have to be more skillful. I will be watching the short term charts today for entries and sales, shorts and longs, as usual. I still have my eye on the energy patch today as potential short term shorting ideas. You know the names. I will be back with ideas and of course I will do my best to twitter some of my moves. Good luck guys.

Stay Smart

State Street (STT) was a beat yesterday and WFC beat today and raised the dividend. It was up about 30%. In my last post I said that I wanted to see a close at or very near the high on the financials. It was a good close and it makes me a little more confident we can resume things in the morning. I actually kept a little UYG long overnight. A good number from JPM should instill some more confidence tomorrow. This a two xanax, double shot moment at the bar for the shorts. Right now they are panicked and are praying we don't gap up in the morning. I am not all all convinced this is the bottom but I will trade what I see, and right now I see green for the financials. Keep in mind the last two big rallies we gave ALL back the next day. However, it does feel real this time. I made most of my money short energy right after the inventory number. Bids imploded and I killed them. I was short APA,CHK,OIH and XLE. I covered about 30 minutes later with nice gains. It wasn't until after lunch that I started getting long the financials, mainly UYG. All of these names were on the blog last night and this morning and twittered throughout the day.

Don't forget about GOOG after the close, a good number in a better market could make this one get silly again. Amnesia can be a killer, so don't forget how bad things were yesterday, the day before and the day before that. These rallies will lull you then rip your esophagus out if you get complacent. Right now though, it's all about emotion and sentiment and NOT the charts or the fundamentals and short squeezes take more than one day to get resolved. The key for me tomorrow will be the ability to sustain this move. If the longs don't use this financial rally to unload, which they've done every time in the past, then this rally will have legs.

As far as oil goes, I think we get lower prices for he rest f the week. After that it could be onward again. This move down is because of the thinking that China is slowing. We've heard that before and it always turns around and bites us. I worry more about Israel, Iran and the Straits of Hormuz more than a 1% perceived decline in China's growth rate. Right now though the momo is down and I still like the names that I posted last night and this morning.

The sad and ironic thing about today is that that Bernanke and Paulson and Cox will take the credit and they had NOTHING to do with it. A beautiful testament to how free markets actually fix themselves ON THEIR OWN!!!!!!!!!!!!!!!!!! and they always will. Go America.

Half Full Or Half Empty

The market is in that zone right now, really. I'm looking at a ton of charts here and depending on your leaning, can be viewed in different ways. If you are a bull, a chart can look one way and a bear would look at it the other way. I like to play Switzerland. A bull may look at a chart that is ready to make a break out, but a bear could look at that same chart as a potential double or triple top. Sentiment takes huge part in how I look at things. This is the type of market where failed breakouts abound so you have to careful. It is also becoming a temperamental and choppy market in here. I put out BLK as a short near the opening at around 122 and it immediately traded down 5 points, the stock went back to flat and closed down about 3. Kooky behavior to say the least. I am holding as I think the financials have a little ground to give back. The chart of XBD, the broker dealer index looks as if it could head lower. I'd rather pay lower than $180 for GS if I can. Too expensive based on this economy right now. Scary when you think the only "go to" bank the Fed had for the Bear Stearns bailout was JP Morgan. Is that a testament to how bad our banking system really is? Makes you feel like it's a house of cards.

So much for the China market rocking because of the olympics. What a friggin mess that is turning out to be. If anything, it's drawing attention to what a miserable existence it is over there. I think FXI is starting a rollover here.

Of course the market will be up 500 points tomorrow but this is just what I think about in the shower.

Still short MOO,BLK,AA

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.