Why Can't This Market Have A Follow Through Day?

Maybe because the credit crisis is morphing into an economic crisis and folks are scared, I don't know. That's how I think it plays out, but that's just me. AAPL guided lower but the stock moved higher in the after market. It's not all bad, but the market is rudderless and has absolutely no leadership right now.

The bloom has really fallen off the rose over at RIMM headquarters and now we wait for the next Wall St. darling because it isn't RIMM anymore. So many trapped longs in that crowded name. Not much support below $50---45 then 40.

If the market is true to itself, it will rally tomorrow as it has become a puzzle wrapped in an enigma. Great for traders but not for the faint of heart. I'm trying to get my hands on the transcript of Paulson lobbying hard for 40 to 1 leverage while at the helm of GS so he could "diversify" its business. Now the fox has the key to the hen house. Funny how things turn out.

What Will the Market Do When We Run Out Of Buffetts?

The Oracle does not play on the no pass line and he is all in with a stake in GE. I guess GS and GE is really not a bad start and I'm sure Berkshire shareholders will be rewarded at some point down the road. Just not right away. And I love how the Sage of Omaha is using his juice with CNBC to throw out the possibility of getting government terms to play in the sub prime sand box. Will this be a thank you from the Feds for his help with GS and GE? Good for him if it is. Stay tuned.

But seriously, what will we do when we run out of captains of industry like Buffett? Sure he is setting the table, but there is no one on deck, unless the government just rolls over and allows private equity and the Bill Grosses of the world to play the game. I say why not? Their all chomping at the bid to do it, let them do it. Mucho dinero has been raised in the last month by new and existing hedge funds to rummage through the carnage to find value. They are calling themselves "opportunity funds." Well,if they say so. I have two buddies at two different funds up in Greenwich that are doing exactly that. I say let the guys that helped cause the problem, solve the problem. There is a ton of money out there even though the media will make us think we will be on line at a soup kitchen tomorrow. We are getting past the fear stage, now it's time for the greed stage. It's all part of the natural fear and greed dynamic on Wall St. Ain't it a kick?

I'll check in later.

A Good Deal For Buffett

Warren just dropped a cool $5 billion into Goldman Sachs. I think it's a better deal for Warren than for GS. A perpetual preferred with a 10% yield. Warren has warrants to buy another bozillion shares at $110. What a deal for the oracle. GS is also issuing $2.5 billion in common equity. Ouch.

Some Short Setups

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.

The Worst Over?

What I meant to say in my last confusing post, is that it seems like yesterday that I posted the chart of the XLF(see June 1 post). The intra day low in XLF occurred on June 11 at around $22.33, the prior low was the March low of $22.29 which has not been broken yet. My bet is that this time it will get cracked and where she finds support I have no idea. Goldman Sachs was out with a report that they think the banks will need to raise an additional $65 billion. What's 6.5% of a trillion between friends. I'm short UYG since the mid morning and WB. I am also short LEH for a retest of the lows. I think some investors were looking for GS to save the day but it didn't, which goes to my practice and theory that owning a weak stock in a "strong" group is far superior to owning a strong stock in a weak group.

I traded some SOLF early on and made some loot with NIHD. Keep and eye on the latter as the chart looks good but it needs more volume.

We have triple witching on Friday and I don't trust the eps from MS that will be coming out tomorrow before the open

Bored To Tears

There were great trading opportunities today in solar and shippers. I traded some AIS,WTI,MS and BZP. half heartedly as I just didn't have the fire at all and spent the day watching the U.S. Open. Oil exploded then rolled over and if you're a trader it just had to leave you confused. Sure, it's option week and things can get funky but this is getting ridiculous. We have LEH,GS,MS and MER over the next couple of days and I could not care less than I do. The solars rallied and the shippers had a nice pop. This is going to be a very volatile week with oil futures and triple witching on Friday, we also have PPI (much more powerful than CPI) tomorrow, and I believe housing numbers are on the docket. In no way do I even think we are out of the woods and I am staying real liquid to take advantage of opportunities long or short for the rest of the week.

I was rooting for Rocco today, what a classy guy. He was working for the Golf channel last year to make ends meet. Today's second place finish should help pay a few bills. Can't help but like the man.

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

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.

Healthy Pullback I Guess

I still don't trust my sister in this market but i guess today was kind of a textbook pullback. I shorted USO and it is currently working against me but I have updated everyone on my thinking in an earlier post and unless oil goes ballistic the trade should work. Bear Stearns has been a phenomenal short for me yesterday and again today. Look at the intra day moves on both days. I received yet another call from a well respected hedge fund trader that said there was teeth in the rumor that European banks were putting BSC on the "do not call list". Who the hell knows if these rumors are true but I caught it for three points short into the close from mid day. Lately with BSC, they've pulled a Dick Cheney with the rifle and asked questions later. Until this company gets bought out or blows out eps, this stock will be volatile. GS was a good trade in the morning but any progress I had there I gave back later in the day as all the financials folded in unison. Wells Fargo caught a bad rumor today as well, which added to the grief. Thank God the fed did what they did yesterday because I think we would have hit NEW lows with authority today. The band aid on cancer crowd will get louder in the coming days and weeks ,and only Jesse Livermore knows how this will play out.

Nice Rally

The bulls got tired of getting their asses kicked and mounted a nice rally. When the market got down near 12000 I thought there might be some support and as it turned out there was. It seems every time the ABK rumor kicks in as it did today, it marks the bottom for the market. The brokerages,banks and insurers have taken a massive pounding the last few days and I caught a nice trade on GS about a point off the low. COIN started off strong,pulled back and then mounted a beautiful rally into the close. I heard the Gartman letter owns it and made some positive comments. DECK got all the way down to $101 before it rallied. Still a great short and I will hold this one for a bit. CMG tagged $94 before coming back to close around $96.5. It was a good day for the most part as I just took what the market gave me. As usual. I will be back later if I can find some charts.