American Express

Watch the mood of the market and the financials on this one.

American Express, Alcoa and Profit Taking

I posted this chart of FAZ on the weekend newsletter, every time it has seen this level it has been a huge win for the bulls on the stock (bears on the sector). Click on the chart, for my thoughts, but I have not given up on the name, I pulled a total of about 5 points out of it today and it continues to be the gift that keeps on giving for me. Discount FAZZY at your own peril.

American Express had a nice rally going today, I was lucky enough to short it near the high of the day, covered for a nice gain and then re-shorted on their write-off announcement. AXP reminds me of GE at $12 about six weeks ago, eerily similar actually on a few fronts. I made 50% on GE short in a month. We'll see.

Alcoa cut their dividend after the close, I didn't know they had sub prime too. Seriously though, it just validates the destruction of the global economy,and in my opinion it gets worse. This may have been a disappointing day for the Pollyanna's but in no way does today's action mean the end of the rally, the close was bearish, but the rally is still in tact.

It's hard to make a directional call after a one day pullback, but a few more and we will break to the downside.

Will Flat Be the New Up?

This is a picture of me, my buddy Todd Stottlemyer, Brian Shannon and my Stocktwits buddies running wild with the bulls in the massive 3 point follow through rally today. Todd was bruised badly and will not be throwing a 95 mph two strike slider to his 2 year old for weeks to come. Brian will will be doing a chart on the massacre later.

Frankly, a flat, sideways, consolidating market is good for the bulls and every day that goes by a base is being built. We need to get through the 740-742 level with passion for me to become short term bullish, after all this just a bear market bump. I've been writing for a couple of weeks now about the lack of follow through in this market and how it is failed to put together two positive days in a row. Well, it did today, by two points. I laugh at this pathetic attempt, but the bulls will take it.

I had a very nice day both long and short, and I plan on playing the field, as always. Personally, I think we cave soon, but I will be watching the aforementioned S&P level for a push back or a breakout. If the market fails there I will release the hounds of hell on the short side, if it breaks higher, I will be very long. Hope you guys killed it today.

P. S One of my favorite shorts on a bounce and a failure to break out is AXP.

Two Days in a Row?

If the planet wasn't so heavily short the market I have to wonder if anything that was said or done yesterday would have had any impact on the market. More rhetoric, all of it too little too late in my opinion. But the market doesn't care what you think or what I think, it never did and it never will. I do know that the next guy that says that we have definitely bottomed will be duct taped to a tree.

Goldman Sachs just downgraded American Express from a neutral to a sell with a $7 price target. You know how I feel about analysts, I rank them somewhere between inept and irrelevant, but I like this call a great deal. I've talked about consumer credit woes for almost a year and the problem will get worse, and I still stand by my COF to $5 call. Yesterday Meredith Whitney wrote a nice piece on the problem in the Wall St. Journal.

I am ready to play the trend until it stops and I know I am the skeptic, but my refusal to buy into the conventional wisdom has saved a lot of bacon on this blog. You will know when I'm bullish, I'll be the guy standing in Macy's window butt naked wearing a propeller hat, adorned in Christmas lights with the megaphone.

GOOD LUCK TODAY.

Some Shorts For the Week Ahead

Levels to watch ONLY if the financials take a further dive. AAPL trades separately.

Impressive Reversal--So Far Anyway

I bet she can short naked. Anyway, I have to say the financials impressed me more than any other time today. With AXP and WB reporting coyote ugly numbers, they shook it off and rallied strong, and they had every chance to implode. That's strength in my book. I'm not calling a bottom because the day is young but still impressive. I'm having success in the biotech patch today as I caught GENZ from $80 to $81 and having good success with IVGN. I twittered both on the blog. GENG gave back the whole move so I'm keeping an eye on it for a possible re-enter, for now it looks like a false break out. Let's see if the rally can gather steam as the day goes on. IBB acts great.

Not Again

First off, all the names on the board this weekend were phenomenal successes, the longs and the shorts, and yes, the financials were way short term overbought. I hope everyone did well. I returned home late today as I shorted a bunch of stocks in the after market. I killed AAPL for about seven points. I'm never long or short through an actual earnings reports, but I have no problem shooting them when they are crawling across the floor trying to catch their last breath, as AAPL, AXP, MRK, COF and UYG did. I kept UYG overnight. I was short STI and UYG most of the day and just shorted the rallies and bounces in most of the financials when I could grab one. Steel and coal were very strong today and and the fertilizer/agri. plays were strong as well. The AXP conference call was dreary and depressing and I think the financials will give some more back as well as the market in general. We still have problems and they haven't been resolved because a three day bounce. Everyone was way to giddy.

When the leaders in the market like GOOG and AAPL, which NEVER disappoint, start disappointing it makes me think the jig is up

CELG,CEPH and IBB performed very well today and these can be good names to hide out.

Some Short Setups