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.

Some Nice Patterns Forming

Just a couple of names tonight. Watch for strength in the financials because SKF will certainly break down nicely. JEC is developing nicely and I still like EBS over $27 from yesterday.

SKF

Alert=a break of $100 and this could have problems

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.

My, How We Have Lowered The Bar

Yeah, I know we were oversold and nothing goes strait down, but when we rally off the bailout of the largest bank on the planet it truly makes me wonder. When we rally even though our President Elect gives no hint of extending existing tax policy, it makes we wonder. If Obama wants to achieve true rock star status all he would have to do is say "I'm not raising taxes and I will freeze spending." The market it would pop 2000 points in a day and folks would have true hope for change. Bush was good on the tax part but acted like a drunken sailor in Bangkok on the latter. You have to have both or it's just an exercise in futility. One can hope.

I put a couple of charts up that I find interesting. First off, is our old favorite SKF. The stock ripped through $300 on Friday but traded all the way down as low as $161 today. Yes you read that correctly. The interesting part is that it closed right on its 50 day ema which I find very cool. Just one of the million reasons I dig charts.

The other chart is of the DOW. It has only had four consecutive positive days in a row going back to the middle of September. That is truly pathetic action. Will it go for three and a row tomorrow? My money says no. I left early for the hardware store to sharpen my cutlery and I view this nonsense rally as a gift from the shorting Gods.

I ended green on the day as I had a monster trade on an SKF long but proceeded to get stopped on it three times after that. I was guilty of fighting the tape a bit today which was dumb.

Someday This War Is Gonna End

It felt like panic today. I've seen and traded through most levels of fear and greed but today felt like panic. For those of you that have followed me since the blog started about ten months ago you know I have been short the financials through most of that time frame and as you know UYG was one of my favorite shorts during that time period. When the NO SHORT list went into effect I walked away from the group because I had squeezed many profits from the sector and frankly didn't trust the manipulation by the FEDS.This past weekend I wrote a piece on why the financials should again be watched as the group was getting close to a key technical breakdown. Well, this week in all its beautiful glory, the financials imploded as I thought. Last night, after yesterdays disaster I opined that the chart looked so bad on XLF that there could be (technically speaking) a measured move in the XLF to $9 and that based on that fact, the SKF would hit $300. It had closed at $11.75 and SKF closed yesterday at $183 yesterday. Well today XLF broke to a low of $9.24 and SKF traded as high as 275 and closed the day up 39 points. A great call--did I think it would do it today? No way, did I play SKF? Oh Yeah!!!!!

On one trade alone I grabbed 12 points but with all my day trades I netted about 18-19 points. I didn't trade SMN ( closed up 22 points near the high) today because my entire focus was on the financials and I was working with much bigger positions than normal so I had to pay attention to one group. I just felt like today they would crush the market and they did. The reason I am pointing this out in such detail, other than the fact that I am silly happy, is that I am done with the financials. After a year of being short---I'm done. Could they go lower? Sure, maybe 7-8 on the XLF but I have squeezed ever ounce of life from the sector and it's time to move on. Maybe a quickie here and there, but my size will be reduced greatly. I may regret it as I see NOTHING that would make me own a financial for many years to come. Dividends will be eliminated, more equity issued and revenue models that are destroyed beyond repair. If it goes a lot lower than that probably means we are in a Depression anyway and all bets will be off. So XLF? Thanks for the ride-it's been real.

As far as the market in general goes, we have real problems on a macro basis as you all know and the market is trading more like we are entering a Depression than a Recession. Oddly, I can make the same rationale for being finished with SMN as the stocks in that group have been decimated beyond stock ticker recognition. Look at AKS,BTU, JRCC, STLD,X, MOS, POT. It goes on and on.

I'm flat and real happy as we end another day. I've been calling for 5500-6000 and I still will defend that opinion for now, but a rally is coming soon, real soon. Just gab a dart.

Shorts and Things

These are some names for the radar. They are either shorts or etf's to get you short. We got a negative tick today at 1324 on the NYSE, 3000 stocks down and only 193 up on NYSE, 2567 down and 322 up on NAZZY.

Up/Down Vol. 1.6 billion down and 28 million up on NYSE
2.3 billion down and 53 million up on NAZZY.

My end game target for this beast is 5500-6000 but there will be monster rallies along the way so be careful. A snap back rally should be coming soon.

So I Was a Day Late, Sue Me

I posted the chart to the left on Sunday and made this post on Monday, Yes, I'm patting myself on the back because the entire planet was calling a bottom and it's starting to PISS ME OFF!!!!

We breached 8000 which is more psychological than anything else but it sets up for a big move down. Volume was light I know, but three more days of light action like today and the $INDU breaks 7000 and into the six thousands.

As I thought, it was all about the financials as they confirmed yesterday break. The XLF is setting up for a measured move to $ 8-9 which could put SKF to the $300 level over time.

I had my best day trading in a year and it was all SMN and SKF. I wrapped up for the day around 2pm but not before I put a short (ON TWITTER) on WFC at the $25 handle. This one is going lower.
I'm running to visit my sister with the wife and kiddies. Check you later. Hope everyone was short something.

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.

Pass The Baton

The only difference between today and yesterday is that the commodity sector really had a nice pop, but the financials rolled over again. I was short GM (took it home) WYNN and long some SKF. The WYNN trade as well as LVS, which I didn't short, really played the first half hour of trading and then traded sideways for most of the day. My best play was LEH as I borrowed in pre-market( you're not gonna take me down Cox)and it just traded like crap all day long. I can't wait to see the "new" shorting rules these bloated bureaucrats have concocted that will be released in two weeks, I just can't wait. Between new restrictions on shorting(only guessing that's what it will be) and my cap gains rate inevitably going up, I will most certainly have to change things a bit. Trading on insider information is out, maybe I'll start another hedge fund and get paid 2 and 20 even if I don't perform. When they change the rule in a couple of weeks we will have to watch CNBC "shut down" again and pay homage at the alter of Jim Cramer. After all, it was his idea, right?

Soooooooooooooooo, where do the financilas go from here? Probably bounce tomorrow I bet. My gut tells me there is a giant Shaquille O'neil sneaker that's going to drop soon. I want to be short.

A Needed Pullback And Everything's a Trade

If the market wants to go higher we need more days like this. It's healthy. A month ago the shorts would have kicked this market down 350. My morning chart of GSI was a stellar performer considering the market, and I made some loot, not a lot, but some. I did a rare mid day post around 2pm opining that the market seemed heavy and citing my long in SKF. I had just gone long SKF. The market tanked 100 points and I caught SKF for 3 points. I freaking love when that happens. As I've said before, I'll take it any way I can get it. It was another great day at headquarters.

Solar stocks are weird, and in my opinion- DONE. If they can't make hay when the sun is shining, then when? Do they need oil at $175 to find their stones or what? I know I missed a lot in that group but they never caught my interest. As a trader I guess that is my bad.

I thought financials were due for a pullback earlier in the week and today they decided to do a little giveback. They creamed them all afternoon. HCBK and USB are my stocks and I will be watching them for strong bounces when the sector feels ready for a rally. Keep SKF at your side, all the volatility is not over in this group, far from it. I think MBIA reports next week and I believe there will be some wonderful long/short opportunities in the future. You just have to stay light on your toes.

It truly is a traders market. Today my good trader buddy who has been trading for about six months got a bit hammered and he called me a few times asking me where I thought he went wrong. He was long Fannie and Fredie in the afternoon and kept the positions almost until the close. Both stocks went out at near the lows of the day. The financials were weak all day but especially weak starting around 2 pm. I told him to be conscious of what is happening in the market as it relates to SECTORS. I would rather own a weak stock in a strong group than a strong stock in a weak group any day of the week. Why? Because when the programs hit, they sell or buy anything and everything and they will pulverize that stock you thought was "strong." They shoot first and ask questions later. Never try to outwit the market and go against the grain, you will lose every time. Follow the money flow, short or long.
Done rambling. Catch you guys later.

Market Looks Tired and Heavy

The market needs a catalyst to continue here and I don't see one on the horizon. Maybe a future dip in oil prices but I doubt it. I am long a little SKF and GSI.

Morning Look

Copper is hitting all time highs which is good for PCU and FCX in pre market. I think we are do for a giveback in the market this week and will be looking at more shorts than longs. YHOO is getting crushed as expected and MSFT is up about a buck. The financials could come in a bit this week and it is a light week for economic data. I will be watching oil for any signs of a breakdown. A couple names I will be watching today:

EJ,BOOM(possible bounce candidate) CHNR(over 23.50 on volume)SKF(if financials come in)PCU(on pullbacks)

Market In Turmoil

Plain ugly. What else can I say? It was always in the back of the minds of the perma bears that this day might come but none of them ever really thought it was possible. The Fed could do a one point cut next week but will it be viewed as a move of desperation? Remember Japan in the 90's and zero interst rates? That party didn't end well. We will see. The VIX or fear index finally moved above 31 for a 14% move today and traders I talk to are literally punch drunk at this point.
I took a very nice gain in SKF today(short financial) and USO is hopefully starting to go my way. I'm not using today as any gage for oil as some futures expired. I think next two weeks will be the test and I think there is a good shot at a meaningful nosedive. International leaders are meeting April 12th to bilaterally figure out a way to strengthen the dollar and I think as that gains traction in the market, commodities in general are due for a meaningful downturn. By the way that DCR trades nicely.

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

My Gut Never Fails Me

Asia and world markets are seeing heavy selling.The Carlyle Group hedge fund is on the verge of collapse,the U.S. dollar is below 100 yen (bullish for oil and commodities) this morning and futures are down significantly. Nazz futures down 23, S&P down 18 and Dow futures down about 160. I think other hedge funds are going to have big problems as this onion gets peeled. If we can turn that would be bullish, if not look for new lows in coming days. I'll check in later. I will be watching the financials with interest today, especially the ongoing drama at Bear Stearns. Also SKF as a potential hedge if things get worse.