Saturday, June 7, 2008
Wednesday, June 4, 2008
Friday, May 9, 2008
Dow 13K, S&P 1400...
...Launching Pad or Wall of Resistance?
I could give you the case for both though I've been expecting the latter. From a technical perspective it looks like: breakout, retrace and possibly set to move higher. However from a fundamental perspective I maintain that we are more fucked as ever.
Interesting divergences developing here. There are many good trades to be had both long and short. Financials and retailers especially are starting to look weak. From the long side anything commodity related is en fuego and there are many attractive breakouts to be had.
For the time being I'm more or less market neutral (slightly long). Looking to play both sides and not stick my neck out too far. I would strongly advise caution here. Playing the commodity explosion from the long side yet increasing position sizes on some of my favorite shorts.
Just a quick note on gold. The yellow metal has drawn itself a head and shoulders top which may or may not result in lower prices. I've been nibbling. Not as much on gold itself but the miners are looking firm and silver is very attractive around these levels. I can tell you this, if gold can dig in here and remain firm I will be a buyer with both hands. The case for owning metals has never been stronger.
I could give you the case for both though I've been expecting the latter. From a technical perspective it looks like: breakout, retrace and possibly set to move higher. However from a fundamental perspective I maintain that we are more fucked as ever.
Interesting divergences developing here. There are many good trades to be had both long and short. Financials and retailers especially are starting to look weak. From the long side anything commodity related is en fuego and there are many attractive breakouts to be had.
For the time being I'm more or less market neutral (slightly long). Looking to play both sides and not stick my neck out too far. I would strongly advise caution here. Playing the commodity explosion from the long side yet increasing position sizes on some of my favorite shorts.
Just a quick note on gold. The yellow metal has drawn itself a head and shoulders top which may or may not result in lower prices. I've been nibbling. Not as much on gold itself but the miners are looking firm and silver is very attractive around these levels. I can tell you this, if gold can dig in here and remain firm I will be a buyer with both hands. The case for owning metals has never been stronger.
Thursday, May 1, 2008
Trigger Finger Getting Itchy
With the Fed out of the way I'm feeling slightly more bold. Swallowing this latest quarter point cut gave the market some indigestion yesterday afternoon. We gave back a triple digit gain. This is just the sort of action I was looking for. My upside target has been 13K on the DOW and we peaked at 13010.
The bears are not out of the woods yet. We have the employment report on Friday. I won't be looking to get real aggressive ahead of that.
The bears are not out of the woods yet. We have the employment report on Friday. I won't be looking to get real aggressive ahead of that.
Tuesday, April 29, 2008
Waiting for the Fed
Boring.
Portfolio remains market neutral with a slight long side bias seeing as few shorts have been working.
Not much to do before Wednesday's announcement. Sitting on my hands. There are a handful of breakouts in play but it's not time to get all excited, about anything.
Portfolio remains market neutral with a slight long side bias seeing as few shorts have been working.
Not much to do before Wednesday's announcement. Sitting on my hands. There are a handful of breakouts in play but it's not time to get all excited, about anything.
Wednesday, April 23, 2008
High Gas Prices = Less Disposable Income
Can anyone tell me who the hell eats at Bob Evans? Old people after Sunday services? I've often wondered how they stay in business when I never see any cars in their parking lot.As for Cracker Barrel and I-Hop, they are roadside eateries. Think summer trip. Something tells me that after dad stops and fills up the minivan at $3.50+/gallon he's not going to want to stop again.
I admit to having a special affection for Cracker Barrel. Think sour dough french toast. That being said, I bet all three of these stocks are going to trade much lower. Haven't taken any action in these names yet as I remain cautious in initiating new short sales but I will be looking for an opportunity in the near future.
Monday, April 21, 2008
Back in the Saddle
Today was a nice uneventful day. I put a lot of money to work. Bought a few breakouts and initiated some modestly-sized shorts in financials. I remain net long but I'm really pretty balanced. Despite my success when the market has recently been crushed I prefer to see a more balanced market where one can play both sides.
Bulls remain in control, for now. Outright delusion is widespread amongst market participants. Seems unlikely to last very long. At some point soon the financials will lead us lower again. Also sniffing for short side opportunities in commercial real estate as those stocks have seen big runs based on the fairy tale that everything is going to be just fine. I continue to believe otherwise.
Bulls remain in control, for now. Outright delusion is widespread amongst market participants. Seems unlikely to last very long. At some point soon the financials will lead us lower again. Also sniffing for short side opportunities in commercial real estate as those stocks have seen big runs based on the fairy tale that everything is going to be just fine. I continue to believe otherwise.
Saturday, April 19, 2008
Triumphant Return
Spent all week in the Georgia mountains hiking and breathing clean air for a change. The people there are just too nice. Now that I'm back in Florida where everyone is an asshole I feel normal again in hating everyone I meet.
I return somewhat richer than when I left. Click-here to review my call on NFX. Now the results:
I return somewhat richer than when I left. Click-here to review my call on NFX. Now the results:
That's almost 14% this week alone. Your welcome. Now you too can afford to go on vacation.
Enough bravado. Perched in my mountain hideaway I paid very little (relatively speaking) attention to the markets. Now that I'm back and feeling refreshed I'll be getting down to business. Obviously the bulls are in charge and the market has broken out to the upside. I'd not be surprised to see 13K on the DOW in short order. I'll give the bulls a head start before I begin hunting them down and slaughtering them again.
Friday, April 11, 2008
Vacation
I'll be spending the next week plotting the inevitable downfall of our economy and markets from my mountain retreat.
Tuesday, April 8, 2008
I Love Me Some Volcker
http://www.bloomberg.com/apps/news?pid=20601087&sid=akNtk9A7NN8I&refer=home
``What appears to be in substance a direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve seems to test the time-honored central bank mantra in time of crisis: lend freely at high rates against good collateral; test it to the point of no return,'' he said.
Volcker said the modern financial system has ``failed the test'' of the marketplace. When asked whether he predicts a ``dollar crisis,'' he said, ``you don't have to predict it, you're in it.''
``What appears to be in substance a direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve seems to test the time-honored central bank mantra in time of crisis: lend freely at high rates against good collateral; test it to the point of no return,'' he said.
Volcker said the modern financial system has ``failed the test'' of the marketplace. When asked whether he predicts a ``dollar crisis,'' he said, ``you don't have to predict it, you're in it.''
Monday, April 7, 2008
Sunday, April 6, 2008
Welcome to the New and Improved Socialist America
I have a few things to get off my chest regarding the bailout of Bear Stearns.
The Fed chose to backstop the sale of Bear with 29 billion dollars of taxpayer money without which the transaction would never have taken place. The justification for doing so, according to Bernanke, is that had Bear been allowed to fail it would have triggered financial armageddon. There is probably some truth in that explanation but the end in this case certainly does not justify the means.
The action Bernanke and Paulson took is definitely unconstitutional and probably illegal. So you'd figure that when they appear before Congress to answer questions regarding this unprecedented transaction that perhaps our representatives might have some pointed questions. You'd figure wrong. The congressional hearings were a circle jerk. I heard more praise of the bailout then criticism. It saved the market from going down so it had to be done. Coincidentally, almost every one of the questioners have taken large campaign contributions from Wall Street.
I want to vomit. I had to turn the TV off. You mean to tell me that after having acted prudently throughout the housing bubble (20% down on a house I could afford, fixed mortgage, sold at the top) that now I have to help bailout those that acted imprudently? Are you fucking kidding me? I could have bought three or four houses, taken out ARMs with zero down and generally just speculated recklessly like many of those around me, but no, I did not. Now when the shit hits the fan I should have to bail out the risk takers with my tax dollars?
We now have, in this country, privatized profit and socialized risk.
The thing with Bear is that they fucked up and should have to face the consequences just like the individuals who speculated and got it wrong. But no, these guys award themselves billions in bonuses and now expect to be bailed out. Filing bankruptcy would have insured the return of those bonuses that were looted from the company but thanks to our Fed and Treasury there are no consequences for failure.
Did you not see the CEO of Bear on CNBS just days before they blew up? According to him everything was just fine, no cause for alarm. Three days later they are on the verge of bankruptcy? Where are the handcuffs? What am I missing? You see it's illegal for executives to make false statements to the market. Where are the cops?
Furthermore this whole scam is an exercise in obfuscation. Even though the taxpayer is on the hook for the losses we are not allowed to see just what Bear has on the books. The whole idea is to avoid taking realistic marks on the toxic waste that is everywhere.
So without objection from Congress we have now institutionalized the taxpayer bailout of any financial concern dubbed too big to fail. There will be many more of them and I suppose the Fed is going to take all of their bad paper onto it's balance sheet? We are now the United States of Subprime. The Fed keeps going at this rate and I'm going to have to turn my walk-in closet into a vault to hold all the gold I'm going to have to buy as protection against the complete debasement of our currency, our values and our society in general.
This bailout was a watershed moment. We have entered a new era in which anything goes. I could not possibly be more ashamed of my country.
The Fed chose to backstop the sale of Bear with 29 billion dollars of taxpayer money without which the transaction would never have taken place. The justification for doing so, according to Bernanke, is that had Bear been allowed to fail it would have triggered financial armageddon. There is probably some truth in that explanation but the end in this case certainly does not justify the means.
The action Bernanke and Paulson took is definitely unconstitutional and probably illegal. So you'd figure that when they appear before Congress to answer questions regarding this unprecedented transaction that perhaps our representatives might have some pointed questions. You'd figure wrong. The congressional hearings were a circle jerk. I heard more praise of the bailout then criticism. It saved the market from going down so it had to be done. Coincidentally, almost every one of the questioners have taken large campaign contributions from Wall Street.
I want to vomit. I had to turn the TV off. You mean to tell me that after having acted prudently throughout the housing bubble (20% down on a house I could afford, fixed mortgage, sold at the top) that now I have to help bailout those that acted imprudently? Are you fucking kidding me? I could have bought three or four houses, taken out ARMs with zero down and generally just speculated recklessly like many of those around me, but no, I did not. Now when the shit hits the fan I should have to bail out the risk takers with my tax dollars?
We now have, in this country, privatized profit and socialized risk.
The thing with Bear is that they fucked up and should have to face the consequences just like the individuals who speculated and got it wrong. But no, these guys award themselves billions in bonuses and now expect to be bailed out. Filing bankruptcy would have insured the return of those bonuses that were looted from the company but thanks to our Fed and Treasury there are no consequences for failure.
Did you not see the CEO of Bear on CNBS just days before they blew up? According to him everything was just fine, no cause for alarm. Three days later they are on the verge of bankruptcy? Where are the handcuffs? What am I missing? You see it's illegal for executives to make false statements to the market. Where are the cops?
Furthermore this whole scam is an exercise in obfuscation. Even though the taxpayer is on the hook for the losses we are not allowed to see just what Bear has on the books. The whole idea is to avoid taking realistic marks on the toxic waste that is everywhere.
So without objection from Congress we have now institutionalized the taxpayer bailout of any financial concern dubbed too big to fail. There will be many more of them and I suppose the Fed is going to take all of their bad paper onto it's balance sheet? We are now the United States of Subprime. The Fed keeps going at this rate and I'm going to have to turn my walk-in closet into a vault to hold all the gold I'm going to have to buy as protection against the complete debasement of our currency, our values and our society in general.
This bailout was a watershed moment. We have entered a new era in which anything goes. I could not possibly be more ashamed of my country.
Wednesday, April 2, 2008
Drunken Bulls Run Amok
You know, I expected another rally but 391 DOW pts? Really? The S&P and Nasdaq were both up better than 3.5%. Jeez. Shit's insane.
So it appears to be a double bottom on the indexes. The bullish contingent is all lathered up and breathing heavy. It's the bottom! I say maybe for now. The DOW needs at least another hundred points for confirmation of a true double bottom.
We should expect more of these violent whipsaws going forward. No question, bear markets are difficult to trade. I feel confident though that we have not seen the lows for the year.
As for my personal trading, it's fair to say it's been bumpy this year. Yesterday I was under attack again but worked early in the day to limit exposure to the short side. I consider yesterday a success insofar as it could have been much worse than it was. I just need to stay in the game. I banked a lot of coin off of the declines we've seen thus far and I can envision a much greater opportunity not too far down the road.
So it appears to be a double bottom on the indexes. The bullish contingent is all lathered up and breathing heavy. It's the bottom! I say maybe for now. The DOW needs at least another hundred points for confirmation of a true double bottom.
We should expect more of these violent whipsaws going forward. No question, bear markets are difficult to trade. I feel confident though that we have not seen the lows for the year.
As for my personal trading, it's fair to say it's been bumpy this year. Yesterday I was under attack again but worked early in the day to limit exposure to the short side. I consider yesterday a success insofar as it could have been much worse than it was. I just need to stay in the game. I banked a lot of coin off of the declines we've seen thus far and I can envision a much greater opportunity not too far down the road.
Monday, March 31, 2008
Here We Go Again
Today is the last day of March. I'll be glad when it ends. I spent the greater part of March getting whipsawed via insane volatility. As usual it was not my powers of prediction that failed me so much as my trading ability or lack thereof. My powers of prediction are just fine thank you and as a result I will enter April with confidence.
Looking at the futures early this morning it looks like a flat open which is nice considering the headlines over the weekend. The Fed apparently will be granted new powers to regulate, pending congressional approval. Makes me want to vomit. The Fed needs to be stripped of it's power not given more. To me this news smells like a regulation shell game. There is absolutely no genuine intention by this administration to regulate anything especially financial concerns.
The whole idea to give the Fed more power reeks of an Orwellian air and scares the shit out of me. We are well on our way to becoming the Socialist States of America.
As for the market, I still think we consolidate some more before ultimately heading lower. Commodities are correcting here and I intend to wait before viewing it as a buying opportunity. Once I see some stability I will be a buyer of gold and agricultural commodities. Somewhat agnostic on oil though- the supply/demand picture is favorable but I expect demand destruction as a result of the recession.
Keeping an eye on technology as I think the sector will offer some nice shorting opportunities in the near future. The idea that investors can hide out in technology names as we enter a recession is pure fallacy.
Looking at the futures early this morning it looks like a flat open which is nice considering the headlines over the weekend. The Fed apparently will be granted new powers to regulate, pending congressional approval. Makes me want to vomit. The Fed needs to be stripped of it's power not given more. To me this news smells like a regulation shell game. There is absolutely no genuine intention by this administration to regulate anything especially financial concerns.
The whole idea to give the Fed more power reeks of an Orwellian air and scares the shit out of me. We are well on our way to becoming the Socialist States of America.
As for the market, I still think we consolidate some more before ultimately heading lower. Commodities are correcting here and I intend to wait before viewing it as a buying opportunity. Once I see some stability I will be a buyer of gold and agricultural commodities. Somewhat agnostic on oil though- the supply/demand picture is favorable but I expect demand destruction as a result of the recession.
Keeping an eye on technology as I think the sector will offer some nice shorting opportunities in the near future. The idea that investors can hide out in technology names as we enter a recession is pure fallacy.
Friday, March 28, 2008
Head and Shoulders, Part Two
This is 15, I think, head and shoulders patterns posted this week. They are in various stages of completion. EWC in particular is very incomplete. The idea is to test the efficacy of the pattern itself so I provided a number of different examples in a real time setting. (One my wonder why there are so many head and shoulders patterns at this moment in time...) The pattern itself should not be traded before completion and you should expect several of these examples to fail altogether (going higher not lower). I view these patterns as major trend changes. Price target is 20% below the neckline.
I will be trading a number of these names and we'll check back in with them down the road. These charts posted are all weekly graphs and will take some time to complete.
Thursday, March 27, 2008
What's Up Now, HUH!?
Yesterday afternoon I went through a list of probably 25 potential trades. I added to a couple existing short positions but only intiated one new position. I shorted HURN @ $58.70. Missed the open this morning but as soon as I walked in the door I covered @ $40.63. That's 30% overnight. What a gift.
Wednesday, March 26, 2008
Hump Day
Seems like the more we rally the more the volume drys up. Hmm. It's a open secret that portfolio managers window dress and paint the tape at month-end and especially quarter-end. Can the buyers sustain the averages for a few more days?
The default position still works despite bumps in the road. Long precious metals, short financials and consumer services. Own metals as long as Bernanke is around. Period. That bearded skank bitch-whore is making this shit up as he goes. He's Greenspan 2.0. As I've said repeatedly YOU MUST have an insurance-sized position in precious metals at all times. It's a hedge. Just own it, just in case.
Financials are starting to look ripe again although it's somewhat demoralizing that we no longer allow institutions to fail. You have to clear the dead wood, not prop it up. Really, shorting anything here is difficult simply due to all the bailouts. As a short you go to sleep (or try) every night knowing tomorrow could bring the next bailout. There will be big money made on the short side but it's tricky as hell.
The default position still works despite bumps in the road. Long precious metals, short financials and consumer services. Own metals as long as Bernanke is around. Period. That bearded skank bitch-whore is making this shit up as he goes. He's Greenspan 2.0. As I've said repeatedly YOU MUST have an insurance-sized position in precious metals at all times. It's a hedge. Just own it, just in case.
Financials are starting to look ripe again although it's somewhat demoralizing that we no longer allow institutions to fail. You have to clear the dead wood, not prop it up. Really, shorting anything here is difficult simply due to all the bailouts. As a short you go to sleep (or try) every night knowing tomorrow could bring the next bailout. There will be big money made on the short side but it's tricky as hell.
Tuesday, March 25, 2008
Waiting
Market went nuts to the upside again yesterday. I limited my short exposure early and saved myself a lot of pain. Then I took a nap and went kayaking.
For now, market participants are back to believing in Goldilocks and the Easter bunny. As to how long such fantasies prevail, it's hard to say. On one hand we have retail and housing stocks breaking out. Financials have stopped falling, for now. On the other hand I see a lot of juicy short set-ups. Lots of head and shoulders tops. The bear is not over.
I still think our problems are too big to bail. Is the Fed is going to monetize trillions of dollars of bad paper?
For now, market participants are back to believing in Goldilocks and the Easter bunny. As to how long such fantasies prevail, it's hard to say. On one hand we have retail and housing stocks breaking out. Financials have stopped falling, for now. On the other hand I see a lot of juicy short set-ups. Lots of head and shoulders tops. The bear is not over.
I still think our problems are too big to bail. Is the Fed is going to monetize trillions of dollars of bad paper?
Monday, March 24, 2008
Rally Sustainable It Seems
Sifting through the entirety of my watchlist this weekend gives me the impression that this current rally has legs. It would have served me better to have come to that conclusion sooner as my bearish bias worked against me last week. Such is life. Retail in particular looks set for a potentially substantive bounce. My top market tell, the financials, have also stopped falling.
Sometimes it's hard to admit your wrong. It's taken me longer than it should to admit I'm now swimming against the tide. Having now acknowledged my poor positioning I will act decisively to preserve capital. Live to fight another day. It's important to keep in mind that my best trades are ahead of me and the number one priority is to stay in the game.
Having said all that I'm not really looking to get long. More than likely I will scale back and wait. This bear market is not going to end anytime soon.
Sometimes it's hard to admit your wrong. It's taken me longer than it should to admit I'm now swimming against the tide. Having now acknowledged my poor positioning I will act decisively to preserve capital. Live to fight another day. It's important to keep in mind that my best trades are ahead of me and the number one priority is to stay in the game.
Having said all that I'm not really looking to get long. More than likely I will scale back and wait. This bear market is not going to end anytime soon.
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