Weekend Stuff Part Doce

I think these are funnnnnnny, http://upsidetrader.blogspot.com/ .

Sunday 4/19/09 6:30am:

I really kind of have a mixed opinion about the "market", like I said, I exited my core position on the Q's friday, but it didn't have as much to do with an "opinion" about them, rather, it was just kind of convenient, I had picked up some decent change, I had the whole thing under a sold call hedge, with all the call's expiring on friday, AND, the price I got for the sold call's was quite a bit higher than where we closed, I could save a little money by just letting the position expire, rather than buy the call's back and roll over into May, etc etc etc, blah blah blah. The bottom line is, I just let it go. Beside's, I have baaaaaad (damn sheep) memories of a previous time, when I made a late day decision, on an option expiration day, to roll the position forward into the next month, when we were basically over bought like we are now, and it turned into one of those kick myself in the ass moments, later, when the "market" took off south into the next month. Funny how those bad memories hang with you for awhile.

Anyway, back to my "mixed" opinion, I put the big index, the NYSE, at the top, because it's REALLY interesting. The infamous "rising bearish wedge", that every one and their brother's uncle is talking about, really show's up well, PLUS, it has run DIRECTLY into heavy resistance at the previous highs from late January and early February, almost right on them. The RSI5 period is getting a pretty severe divergence, as is the MACD Histogram, I mean, this thing look's like it's just dying to pull back. One thing that is a positive, is the NYSE A/D chart, the fourth chart down from the top, even though the NYSE is lower than it was on the open in January, the A/D line is higher, meaning more stocks are participating in this rally, that's very positive. I'm also looking at the A50 chart, the percentage of stocks above their 50 day moving average, the second chart from the bottom, as a positive, but, also as a negative, the A50 I have up is the S&P 500, but they all look the same, I consider it positive that so many stocks are now above their 50 DMA, but it also indicates that we are very over bought, as that A50 is more over bought than at any time in the last three year's, but as I've mentioned before, it dosn't mean we HAVE to pull back, we have period's where we continued to grind up in this over bought condition, BUT, I consider the odd's to be on the side of a pull back, to work it off. Also supporting this over bought condition, is I heard from some one I can't mention (legal stuff), that the Jason Goepfert dumb money confidence indicator is back up at the levels we had, just before the pull back's in January of this year, and May of last year.

Now, speaking of "the pull back", this is where I find it REALLY interesting. The Justin Mamis investor sentiment cycle chart is the third one from the top, I mean, this thing fit's almost EXACTLY to where the NYSE is right now, in the "cycle". I can't tell you how many of the Street "Salesmen" I've been hearing, crowing about how the market is "Climbing the Wall of Worry", and in that same vein, you hear a number of people concerned about how we've come to far to fast, IE, the "Anxiety" stage, which lead's into, waaaaaa laaaaaa, the "Aversion" stage, or, "the pull back". This will usually start with some kind of new's, or some thing, maybe the initial reports on the 1st quarter GDP due out in a while, or the results of the stress test's, or some thing like that, but it give's the worry wart's a chance to say, "see, I told you so", and give's "investor's" and all the rest of them, a reason to take profits and get out, and maybe shake out the week hand's, like, ME.

The daily chart of the Q's, second from the top, lays out my "preferred" senario for the pull back, which means, I can just stop now, BECAUSE IT AIN'T GONNA HAPPEN, hahahaha! Anyway, should a miracle happen, the most "logical" area's for a pull back would be like a 50% retracement of the whole rally, which also happens to line up, right now, at about the 50 DMA on the Q's, or about the 30 level. If "they" want to get nasty, and really scare the shit out of everyone, then they would do like a 61.8% retracement, which would take us to the 28-29 "area". The Elliott waver's that I've been reading, kind of surprised me, as I initially thought this rally would be like an A-B, or A-B-C type of correction, but they all seem to agree that the first wave of the "great Bear", the A wave down, is complete, and they now expect the normal 1-2-3-4-5 wave count for the rally, eeeeeeerrrrrr, Bear market rally, that would take us into the B wave top, with the final low in this bear market coming off the great "C" wave down, yet to come. So, if that's the case, then this pull back would just be the wave 2 in the count, which lead's to the great 3 wave up, which is always the longest wave, and set's up perfectly in the Mamis investor cycle "Denial" phase, which happen's when we go back up, and take out what ever high's we make, before the coming pull back.

Anyway, this is all very "cute" stuff, I don't really expect it to play out this cleanly, it never does, but just by me saying that, maybe that mean's that it does, hahahaha!

soars

Federated's Tice Says S&P 500 Is Poised to Plunge 62%: Video April ... , good ole David, I will say he's consistant, but I just totally disagree with him, since my ultimate target on the SPY is 5 bucks, hahahahaha! This is an article that links the Tice interview, Thoughts on the S&P 500 Going to 325 , what I like to do, is read the comments, what the comments do is remind me about how dangerous it is to have an opinion, so much so that it blinds you to opportunity staring you in the face. I love the comments about the market drop being a right wing conspiracy, to try and sway the mid term elections coming up next year, hahahahahaha, naturally, not one of them continue's the rational, and say's that obviously the market crash last year was all the fault of the left winger George Soros and his Democrapic buddies, driving the market down before the election.

wall of worry , I agree with this article, that the "wall of worry" has fallen awful fast, but what I noticed when we were making the Crudlow "mother of all bottoms" in early march, which was about the fifth mother of all bottoms that he and his croonies called in the last year, hahahahaha, was the number of times that I was hearing the yelling screaming yakking talking heads saying the term, "Buying opportunity of a life time". I wish I would have kept a Google count of how often that term was showing up, with the markets down 50%+ at the time, I mean, I certainly didn't see the kind of fear associated with a "bottom".

Q&A with Elizabeth Warren , I have to admit, after watching her with Jon Daily, she is probably my new hero in government.

This is just a typical, personal gripe with me, but when the FOX news channel got done with the saturday business shows this morning, the first new's story they had on, was a special alert about the snow storm over Colorado, with the government sending in National guard troops to help the hundred plus motorist stranded on some road. Now, I KNOW your'e dying to ask me this: "CUCCA, that's strange, wasn't that storm over you and the rest of Utah, yesterday?? I ask that, because I didn't hear a damn thing on FOX about any special wheather alerts, or the government sending in National guard troops to help YOU out!!!!!"

Since you asked, well, the answer is simple, it's the word "EAST". All the national news outfits are based in the East, and the only thing that matter's, is if the word "EAST" is some where in the broadcast, in this case, the snow storm was on "The EASTERN slope of the Rockies", rather than being on the "WESTERN" slope of the Rockies yesterday, when it didn't matter. If you don't believe me, watch the weather channel some time, the reporter always stands on the western side of the map, completely blocking out any thing west of the Rockies, even the FOX reporter this morning stood directly in front of UTAH, blocking it out.

It's just a little pet peeve of mine, but, a legitimate one, but just wait until everyone west of the Rockies secede's from the rest of the Union, THEN, we MIGHT, get your attention.

Weekend Stuff

7:45pm: In wandering through the Fly's site, http://www.ibankcoin.com/flyblog/ , I came across this, "thing", that he's buying (yea yea yea yea yea, so I'm a fricking leech, SUE ME!), I have NO idea wad it is, actually, I do, it's a "thing", ANYWAY, it has a little resistance here, BUT, if it get's over it, it has IMMEDIATE clear air, back up to the 13 "area". Since I'm not in da Q's anymore, HEY, I'm looking for some thing, to "bank some coin" on, next week. I have no idea when earnings are for it, I will definitely check, before I "INVEST", for like, a DAY.

I have watched Pimm Fox for like, YEAR'S, and I have NEVER seen what he did today. In case you don't know, he host's a show on Bloomberg TV, called "Taking Stock", on every day at 5pm ET, unfortunately it comes on as the same time Fast Money comes on, but, since they have the new host on FM, I'm not to interested, any more. ANYWAY, Pimm has on some of the biggest player's in the "industry", but he USUALLY does what a good host does, and listen's to the sale's person's talk ( some times called an "Analyst", or, WAD EVER), that who ever his guest is, and kind of act's like a counter point to the bull shit that the "sale's people" are spouting off, about their latest peice of shit, that they are trying to "SELL", you (If you don't know what the difference is, between a "SELL SIDE" analyst, and a "BUY SIDE" analyst, then, you are in DEEP SHIT, and have NO business, being in, "the business"). So, he has this, "analyst", on, about GE's earnings this morning, he says, thank you very much, bid's "it", fare the well, and I'm thinking to myself, wad the FUDGE is going on, he still has, like, six minutes left in the telecast. Well, he did some thing I've NEVER seen him do before, he actually "RAGGED" on GE's earnings. You have to understand, I've NEVER seen him do this, on, ANY COMPANY!!! He sat there, by HIMSELF, and said, that he compare's it (GE's earnings), to some one who owe's $500,000, that come's due in two year's, to a bookie that has two goon's, who will KILL you, if you don't pay up by the time the money is due, AND, you are currently making, $2000 dollars, a YEAR!!!!!! I mean, I don't DO, "Funnymental" stuff, so I haven't looked at the details of the report, I leave that to people who "DO", who tell me that later. Anyway, he ended his little show up with about the most sarcastic comment I've EVER heard him make, when he said, GE's stock, finished UP on the day.
I've heard they've actually reduced the requirements today, to becoming a Canadian Citizen, http://www.cic.gc.ca/english/citizenship/become-eligibility.asp , which, for some strange reason, I just HAPPEN TO NOTICE, they don't have the MEXICAN language on it, their requirements that is, which, I happen to speak, fairly fluently, even though I don't speaka da engelisch so well, but I guess it don't matter, as long as I don't speaka da French language any betta, SO, wid dem having da most Islands for sale, http://www.privateislandsonline.com/ , and me being out of Da Q's, maybe I should think about, moving there. It's so damn cold though!!!!!

MSW 4/17/09

I don't really care for this outfit, for the most part, but, http://www.chartoftheday.com/20090417.htm?T , the chart he posted today is interesting. What I find interesting, is that the prior NON recession (I have said that since I started this blog, YOU CANNOT HAVE A RECESSION WHEN HOUSING IS GOING GREAT GUNS, it was a stinking NasDog peice of what ever) bottomed 18 months after the start. The IDEA, that we have bottomed in this MUCH WORSE, and VERY REAL, recession, six months sooner than that one, is OBSOIB (as in, tis spriiiiiing again, and da boids are on da wing, but that's obsoib, I always thought da wings were on da boid). The other thing I find, interesting, when you look at the bottom hook we are getting in our RED colored line, and the bottom hook, just to the right, that happened at the gold chart, notice the little wave down we got, to retest, and complete the "bottom".

No change on the ETF's, the GDX did issue a new confirmed sell, meaning, it was already on a short, and the systems came up with a new pattern today, that was a short in and of itself, thus, the confirmed short. One thing on the weekly charts, the bonds are all on confirmed short signals, TIP, BND and TLT.

On the daily charts, in complete disagreement with the ETF's, the only new buy it had was NEM, hahahaha, the new shorts, which don't look to bad include, ANN, TCO, SKS, MU, AMTD, AFFX, VTR. What I did was go to the weekly charts, for you long termers, and out of all those buys on the chart above, SNDK kind of popped out at me, when you look directly to the left, this thing really has clear air back up to the September highs from last year, in the 24 "area". HOW EVER, when you look just to the left of that previous high, we are in a congestion zone, that extends from about 13 up to 18, so, all that means, is that the road may be a little, aaaaaahhhhh, rocky, getting to 24.

4/17/09

2:15pm: I'm all yakked out from the market rewind chat room, so I'll post some thing this weekend, but a few notes, the 60min Q's (of which I have NO position, it was all called away today) is having a MACD divergence on the Histogram, I don't like my Mclellan, it took that long position two days ago, ALMOST (as in horse shoe's) sold it, it would have triggered the sell the position above +100, and has now turned down short of the target. Oh well, you win some and lose some.

The SPY daily closed just about right on the February highs, a very logical place, IMHO, to start a pull back, but HEY, who am I to say any thing.

Have a good weekend.

6:30am: Since I'm just sitting around waiting to be called away on my positions today, I'll be hanging out in the Market Rewind chat room, Market Rewind ,talking about the snow storms here, or some thing.

GE and Citigroup had a beat, I guess, Citigroup Q1 loss 18c-share; adjusted profit totaled $1.6B , General Electric's quarterly revenue down 9% , so, SURPRISE, we have another positive gap in the market, although it's not MUCH, almost flat. GE kind of whipped around on the first 5 min bar after the open, hitting a high of 13.10, but closing at 12.74, and has kind of been wallowing and pulling back since. Looking at that chart of it, at the bottom, the first resistance line above is the February high at 12.90, then the next one is the January high at 13.75, plus, if you look just to the left of the January high, it kind of chopped around between these two lines, so we have a "congestion" zone here. Now, I'm always interested in GE, and what I'd like to see, is for it to wallow around between those two lines a couple or few days, then pull back, and then maybe make another attempt to get through it, because if you look above the January high, there is virtually clear air, or, no resistance, up to that upper pivot line, at "around", 17 bucks.

C is up about 10%, so it's positive for my FAS position. which, surprisingly, is only up about 7 cents (GULP!), but, I'm holding to my target, which is the February high around 11.50, I would probably stop out of this thing if we get under the low from two days ago, 7.20, but I might exit before then. I guess we get BAC earnings on monday, that will pretty much wrap up the big banks for this season.
Good luck out there today.

MSW 4/16/09

One big change on the ETF scan, the software put a new buy on the daily chart of da Q's, hahahahaha, the roachey thing, just when I'm getting out.

It came up with 3 new buys, MORN,RJF,BGP, and one new short, TYC, on the Russell 1000 daily charts. I don't care for any of them, however, the TYC charts looks like more of a buy to me than the other ones, hahahahaha. Anyway, what I did was go to the weekly charts, and check the daily charts of all the stocks that have new weekly buys and shorts, and what I came up with was GD and BWA. Now, we all know General Dynamics, it's sitting right back at it's previous high for this rally, about 45.54, and it's looks to me to have clear air above it back to the 56 area. Now, Borg Warner is involved with automotive's, so, it's a baaaaaaaad sector, BUT, it's rallied right back up to the December highs, and bumped against them four times, if it can get over the 29 level, it basically has clear air back up to about the 38 "area".

4/16/09

The single most important trading video you will EVER see in your life, http://www.momdaytrader.com/blog/category/videos/ .

2:25pm: The Q's put on just about the most horrible looking first hour and 15 minutes, on that 15min chart, in the circle, that I've seen in some time, so I lost interest, but I was involved with my FAS position anyway, so I had work to do. Number one, I was really surprised we didn't gap up more after the JPM earnings, that was a hhhmmmmm, and we started taking off south right away, so I hedged it with sold call's that expire tomorrow. Anyway, if you had been in the Market Rewind room yesterday you would have heard me talk about the break out over that 8.20 level, at the black horizontal line, and the fact that there was clear air back up to the previous day's high's, in the left circle, IE no pivot resistance, which we hit before the close (miracles happen every day, hahahaha). The pull back this morning came down and sat right on that break out level from yesterday, and that was the low for the day. My whole point of this little exercise, is to show that FAS is trading pretty much like it should, right now, and can be day traded.
The Q's McClellan did NOT sell that long it took yesterday, we hit 78.99 at the close, it will sell when it get's over the +100 level.

GOOG just reported, and beat pretty good on the EPS, but was light on the revenue, Q's are up about 4 cents after the report.

The Q's are back up at the upper trend line on that bearish rising wedge (how long will I keep calling it that, hahahaha), and are back to extremely over bought conditions on all time frames.

On a position basis, I am setup for expiration tomorrow, and I'm hoping I get called away on my Q core long position, in which case, if I am, I'll start over with a new plan on monday. That plan will NOT involve starting a new LONG position, I may do a delta neutral short position, in which I will go long, AS AN EXAMPLE, 1000 shares of the Q's, and buy 20 put contracts with a 50% delta, as far out as say the June or July expiration date. This is a bearish bet, and I will day trade short calls in the TS account, and short puts in the IB account, against the positions, thus I can have the opportunity of multi-directional trading, rather than just selling call's against a flat long side position, which limits you to just short side setup's to day trade.

Anyway, I'll think about it over the weekend.

7:00am: Welp, futures are blowing up, as good ole JP came through for us, Before the Bell: J.P. Morgan Chase, Nokia and Kraft Foods in spotlight , they are choosing to focus on JP rather than the horribble housing data, Treasurys fall sligthly after jobless claims, housing data , although, we did get a down tick of 53K in unemployment this week.
Right now the futures are bumping right up against the over night highs, I'm not really with it today, for some reason, but if I can get myself together, I hope to short the shit out of this thing at some point.
Good luck out there today.

MSW 4/15/09

I found a couple of items interesting here, so this blog, went into my "stuff", folder, http://www.thesimpledollar.com/2009/04/11/50-side-businesses-you-can-start-on-your-own/ .

WELP, Oregon is DEFINITELY, one state I will NOT be moving to, http://online.wsj.com/article/SB123976316293519743.html#mod=rss_opinion_main , not with a booze tax like that.

I don't know who this broad is, Wanda Sykes, but I happen to agree with a lot she says, hahahahahahahahahahahaha, http://www.youtube.com/watch?v=O7pyUYyskIM&feature=related .

The only change on the ETF section was a new confirmed sell on FAS, what this means is that it all ready had a short signal on it, but 60% of the 59 trading systems that it get's it's signals from, saw some thing they didn't like, and fired off a new short signal. I'm IN FAS, having rolled out of the Uggies, UYG, and I'm looking for that previous high in the 11.50-12.25 "area", so I'm ignoring the signal, BECAUSE I DON'T WANT TO HEAR IT, hahahahahahaha!!
The Russell 1000 had two new buys and shorts, I don't care about the buys, but the shorts are really interesting, it fired off a new short in BAC and TXT. TXT of course, had the buyout bid, supposedly, but the systems are seeing some thing they don't like. BAC has earnings coming up soon, so beware, but 60% of the trading systems saw some thing they didn't like today, and fired off a new short sale. That high lighted area around the previous two days is pointing out a "piercing line/Dark Cloud" candle formation, a Piercing line formation is when the current day's candle opens in the same direction as the prior day's move, but reverse's direction, and close's well with in the prior day's range. This is weird of course, but we had the same candle formation today, as it opened up in the same direction of the previous candle, DOWN, and then closed back up within the middle of the range of yesterday, not quite half way up into it, so that's probably why it didn't alert that formation.

4/15/09

2:15pm: After I got back on today, online that is, I ended up spending the rest of the day in the MarketRewind chat room, good stuff, you should visit it some time, BZ was there, I'll be in the Pristine rooms tomorrow, for awhile at least, as it's the last trial day.

I'm basically all yakked out, but some fairly interesting things going on, the 60min broke the rising bearish wedge to the down side, not particularly good, but kind of counter balancing this, is that we've now had three days down, and worked off the over bought condition, PLUS, we fullfilled a major little obligation, which was to fill that gap from 4/8, SO, the conditions are in place for a resumption of the uptrend.

The McClellan triggered it's buy this morning, going long at 8:30am MT at 32.32, it was sucking the big one all day, but is currently in the green at the close.

9:30AM: AAAAAAAAARRRRRRRRRGGGGGGGGUUUUUHHHHHHHHHH!!! I'm just having all kinds of problems today, my puter was running extremely slow, and then just flat shut down, and NOW, my damn TV went out, HEY MAN, you can take my Inet, BUT DON'T MESS WITH MY TUBE!!!! Anyway, it's kind of ruined my attitude for the day, so I thought I'd point a couple of items out. On the 5 minute chart above, you can see we stopped out in the middle of now where, on the pull back this morning, in the left circle, so, how do you determine where we might stop out in the middle of now where like that???? Good question.

When you go to a REAL chart, that shows the post market last night, and the premarket this morning, that was a very logical "area" to find some support, it was the low's last night after the INTC fiasco. So, after the little rally that failed to fill the gap, why'd we stop on that black horizontal line??????

When you go to the 60 min chart, that's the gap fill I've been watching for, from 4/8, at 31.96. What's the low so far today (as of the time I wrote this)??? Waaaaaa Laaaaaa, 31.96!!! My only point, is, even when it looks like we stop out in the middle of now where, there is "almost" "always" (those are disclaimers) a pretty logical reason for the support or resistance.

For some comical relief, when my tube was still working, I was watching the Tax Tea Parties, FOX was at the one in Philadelpia, and it was windy, cold, and rainy, and the reporter was asking one of the organizer's if she thought they were going to get the 6000 people they expected, and one of the Tea partyer's standing next to her, yelled out "IT'S A CONSPIRACY MAAAAAAAN!!!! IT'S DA GOVERNMENT!!!!! THEY CONTROL DA WHEATHER MAAAAAAANNNNN!!!!!!" Hahahahahahahahaha, I thought it was hilarious, it sounds like my kind of town, hell, maybe I'll move there.

6:45am: Not much of a reaction after the CPI this morning, U.S. consumer prices slip 0.1% in March, matching expectations , we are basically back to where we were after the INTC report last night, INTC is still down about 4%, but the Q's have gone up since last night, now down about only 11 cents at 32.38, I have no opinion about the open. One thing I notice, is those magic buyer's showed up at 2am ET again this morning, hahahahahahaha, I wonder if the trader's that pull the trigger for the PPT get paid over time, by the tax payer's of course, for working those kind of hours???
I was asked about the Trap Door setup last night, here's a two year old post that I added some additional commentary to, http://cluelessqtrader.blogspot.com/2007/02/more-trap-doors.html , you can find stuff like this by just typing it in the search bar, at the top of the blog.

My puter must have had some booze spilled on it last night, as it seems to have a hang over, so I'll be screwing with that, and I'll be spending the day in one of the Pristine trading rooms, good luck out there today.

MSW 4/14/09

No changes in the ETF's tonight.

The MSW is just wild about the market, hahahahaha, it came up with one new buy on the daily charts, and 9 new shorts. I'm not interested in the buy, but some of the shorts look interesting, if I had to pick one, it would be SOHU.

That outfit I work for is going back to their Short ETF's, they have been pretty successful with these over the last year. Following is the bulk of the commentary I received tonight:

" The signs of stabilization are just like the spring flowers that are popping out everywhere. And the stock market just completed its best five-week performance in 75 years -- with Wells Fargo and Goldman Sachs announcing hefty quarterly profits. Importantly, let's not forget the indicators showing that the pace of the economic decline is slowing. As we've seen in our recent Alliance research, the "second derivative," or the rate of change of the rate of change, is leveling off in many instances. It looks like happy days are here again -- or are they?

In the spirit of Passover, we ask why this economic crisis is different for most of the other downturns. The answer is that the current crisis was the result of severe disruptions in the credit markets -- in other words, a crash of a worldwide systemic asset bubble. By comparison, typical macroeconomic models are based on relationships between consumer demand, inventories, production and the like. Consequently, the current severe recession will not react in typical ways to these various factors. And the timing of an economic recovery will not necessarily follow the pattern of previous recessions. This time, the key is the financial sector, its severe problems and the risks that still lie ahead.

While the S&P 500 jumped 21% in the 14 trading days leading up to March 27, the corporate-bond market had 35 defaults -- the largest number of non-payments in a single month since the Depression. The default rate is now 7% (up from 1.5% a year ago) and Moody's predicts that it will reach 14.6% by Q4. Further, the financial media is trumpeting the big run-up in stock prices and hasn't said much about these defaults. There hasn't been much attention paid to the number of bank failures this year -- a number that's already up to 23, compared to 25 in all of 2008.

As for Wells Fargo and Goldman, their management teams earned their keep by mastering the art of making lemonade out of lemons. Wells Fargo's pre-announcement of a $3 billion profit in Q1 served as rocket fuel for the financial stocks and an anchor for our newly recommended short ETFs. But there is more to this story than WFC has been compelled to reveal. For starters, Bloomberg reported yesterday that Wells Fargo may need an additional $50 billion to pay back the U.S. Treasury and cover its loan losses. As a Credit Suisse analyst said, "Given rising unemployment, continued home price declines and general macroeconomic headwinds, WFC's consumer and commercial portfolios remain at risk for meaningfully higher credit losses over 2009 and 2010." Goldman managed to relieve itself of massive losses by cleverly shifting its financial year to a calendar year format. So, the current reporting quarter is now January through March and, thereby, Goldman was able to bury the AIG effect that hit in December in the prior year adjustment. For Q1, the total AIG effect on earnings was zero!

As for the banks' stress tests, which are currently underway at 19 top financial institutions and will be reported on by U.S. government testers by the end of April, the problem here is that the criterion used for the tests are grounded in pure fantasy. According to economist Nouriel Roubini (aka "Dr. Doom"), the stress tests are essentially rigged to enable all 19 banks to pass the test. He went on to say that the results will be worthless the moment they're published. Said Roubini, "If you look at the actual data today, macro data for Q1 on the three variables used in the stress tests -- growth rate, unemployment rate, and home price depreciation -- are already worse than those in the FDIC baseline scenario for 2009, and even worse than those for the more adverse stressed scenario for 2009." Roubini's conclusion is disheartening: "The stress test results are meaningless, as actual data are already running worse than the worst case scenario." He adds, "These are not stress tests, but rather fudge tests."

Be prepared for a U-shaped recovery and a long, sluggish climb out of this recession, rather than a quick and painless V-shaped rebound. What all of this means for us is that there is no credit growth to fund a resumption of consumer demand and spending. And there is no pent up demand for homes, cars, furniture, etc. that is set to supercharge a V-shaped recovery. This time around, consumers are raising their savings rate, and that means we're in a whole new world when it comes to allocating our investment capital. How best to play this new world paradigm will be the focus of this service during the next several months.

Of course, our strategy since last September has helped us to minimize losses and take advantage of the sharp volatility in stocks -- on both the long and short sides. During this next phase we will continue our combination of strategies for both short-term and long-term funds, but we expect that our approach will shift from a heavily defensive posture to a gradually more offensive and opportunistic one. This transformation isn't about to happen overnight, and you can be sure we're keeping our guard up because of the uncertainties in the financial system and the potential serious disruptions still possible in the months and quarters ahead. Given our view on the stock market's recent surge, and its incongruity with the economic fundamentals and financial problems, we are recommending a third short ETF to go with our other two recent additions.

Hedges/Shorts

UltraShort Russell2000 ProShares - TWM -- new buy recommendation -- Buy Under $65; aggressive buy below $55

UltraShort Financials ProShares-SKF -- new Buy Under $85; aggressive buy below $75 UltraShort Real Estate ProShares-SRS -- new Buy Under $45; aggressive buy below $40

4/14/09

6:30pm: I was going back over the trade's tonight, actually, I go over it every night, naturally, it gives me an excuse to drink, as I beat myself over the back with barbed wire and stuff, yelling at myself for exiting to early, stuff like that (talk about self-flagulation, just trading every day is enough), and I noticed I missed one of my favorite patterns, in the circle. The reason I missed it, is because it was during my nap time, hahahahahahaha, hey, don't be bad mouthing us old men. ANYWAY, you notice how we "walked" under that blue line, that's the 16 EMA, we rallied off the low, and then just started "walking" under it, never able to close over it, BUT, we couldn't take out the prior low's either, and the EMA was starting to flatten, the arrow points to where we "finally" closed over it. The "take it" bar would have been that next little bar, that closed above it, with a stop under the low of that bar, you got in the money pretty quick, and if you would have held to your stop, you would have lived through the nasty shake out bar, just prior to the big "thrust" bar, over to the right. If you would have had any brain's, you would have exited on the "thrust" bar, in fact, I probably would have ended up doing the same thing I did, when I came back for the last hour, get stopped out. Sigh, forget I said any thing.

2:00pm: I had no play out of the open, we had one little continuation bar down, then started morping upward, pulled back and double bottomed it, basically in one bar, geeze, then started sprinting higher, 45 minutes after the open. Now, I was in a baaaaaaad mood, mainly because of the internals, every thing is down, RIGHT, well, the TRIN was 26, TWENTY STINKING SIX, and the P/C was about 55, I mean, the P/C closed around 74 or so, that in itself, is a sell signal.

Wad ever, things got interesting at the gap fill, at the arrow, it's hard to see on the chart (you had to be there to appreciate it), but we actually gapped up on that little bar, to complete the gap fill, then immediately turned the bar down, putting almost a bearish engulfing bar on it, wooooooo hooooooo, short city!!!!! Stop over the HOD, I actually exited to early (naturally), when we wallowed around at the triple bottom, the final low ended up at the close from 4/3. I put the arrows on the right on a little failure of a "Phoenix", rising from the ash's, we got the big thrust bar, then three cool little pull back bars, that sat right in the saddle of the MA's, the take can be over the high, or over the open if you are brave, of the third bar, that was a doji, the stupid thing worked for a couple of minutes, the green bar at the right arrow, but we immediately put a red bar on the next bar, then another red bar, BAD SIGN, it should have continued up right away. The next five bars put on topping tails, or fuzzy tails as BZ call's them, any way, the exit was before then, under the take it bar, hey, you win some, you lose some.

On the 60min., we almost hit the bottom line of the bearish rising wedge, it was close (as in horse shoes, it don't stinking count), and going into the close, we wallowed up along it, I don't really like the look of the last half hour, it looks kind of bear flaggey to me, but I imagine (I can imagine a LOT) Inky will take care of that, with earnings after the close.

I didn't think that short by the McClellan had a chance in hell of making money, but it closed out today at 12:20pm MT at 32.50, for a gain of 19 cents, hahahahaha, hey, it was better than the draw down I thought I was going to get. It's next trade will be a long.

I'm watching the FAS right now, and for some reason, it's collasping going into the close, hmmmmmmmmm, new's coming out in the after hours???? YOU THINK?????

6:45am: Hahahahaha, I'm telling ya, the "market", is just about the sickest thing I've ever seen, we dumped all night, and then those magic buyer's came flooding into the ES starting at 2am ET, when most human beings are asleep (the PPT NEVER sleeps), we got a mysterious rush of buyer's right into the economic reports at 8:30am, and then shock of shock's, the "market", found out the consumer ain't buying stuff, hahahahahahahahahahahahahahahahahha, Treasurys gain after retail sales surprisingly fall , "SURPRISINGLY"??????!!!! Surprising to who (whom???)??????? What happened to all the baaaaaaaaaaad (damn sheep) economic new's being priced into the market?????? What a bunch of bull shit, Goldman and the rest of da Boyz know EXACTLY what the reports are going to be, they were doing a great job of spreading the bull shit, in preparation to spring the "trap", on the bulls, if indeed this is it.
The Q's held up surprisingly well, only down about 25 cents, it would not SURPRISE me in the least, to see another trap sprung after the open, when da Boyz take it to all those misguided shorts that piled in this morning.
Trade with the trend, and good luck out there today.

MSW 4/13/09

http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html , just for me, to refer back to.

Not really any changes on the ETF's, it's still on a short on the daily FAS, but it stopped out of it's short on the XLF, so pick'em.

On the Russell 1000 it has three new buys and six new shorts on the daily charts, I'm not interested in any of them, if I was, it would "probably" be a short of UNM, of that hanging man candle.
Over all, it's on buy signals on 510 stocks, and short signals on 194 stocks, so it's still very bullish.

4/13/09

2:30pm: I forgot to mention, Pristine is having another free (the magic word) 3 day trial to all their services, https://www.pristine.com/Services/register.aspx , starting tomorrow. I'll be hanging out in one of the rooms the next few days, Greg Capra gives his view of the markets at about 9am ET each morning, in the Method Room, I always check that out.
Goldman pulled back and was actually DOWN a couple of bucks, the last I had a chance to look.

2:25pm: HAHAHAHAHA, those roach's Goldman came out and reported early, they were supposed to go tomorrow before the open, they beat, NATURALLY, and are up a couple of bucks.

2:20pm: Well, close, but no banaaaaana, the low for the morning came at friday's open, they just couldn't get enough going to get it under friday's low's, "they", being the good guys, the shorts, hahahahaha!! Anyway, I did all right there, but I got stabbed a little later in the day, in the circled area on the five and 15 min charts, we had a very nice RSI divegence working on the 15min, as it made a lower high, while price made a higher high, right at high noon here, or 2ET. The 5min acted very nicely, pulling back, then at 1pm we put that red bar on, at the arrow, then the next bar started down, and I really thought the bull shit was over, but, atlas, "they" came in with a miracle stinking save at 13:05ET, the fricking roach's!!! IT'S JUST A MIRACLE, I TELL YA!!!

We sold off the last 15 minutes, not a particularly good way to end the day, we set a new high for the rally on the daily chart. The 60min shows we made lower highs on the STOCH and RSI, even though we made higher high's, this thing is dying to go down, you could make a case that it's working on a bearish rising wedge, but the only way to take that short, is under the lower trend line, around 32.25, but there's a couple of area's of support between here and there, so we got a way's to go.

The McClellan hates it, as it's on a short, and a draw down, it shorted it this morning at 10:30am MT at 32.69, so I'm on a draw down on that. The short is taken when it cross's from above the +100, to under it, vice versa for long's. It is interesting to me, that the McClellan went down all day, as that's based on the A/D differentials.

7:00am: The ES has been virtually flat since it gapped down last night, which, personally, I think will be the SOP until INTC reports after the bell, tomorrow, although GS reports in the morning, and based on the surprise by WFC on thursday, could provide some fire works early. Speaking of Goldman, I'm a little surprised they are only down 1% in the premarket, with the 10 billion dollar offering they are planning, to repay the TARP. We get a few other big banks later in the week, like JPM, C, and I believe BAC, but with the early announcement by WFC thursday, who knows what's going to happen, THUS:
I plan on standing aside, and just day trading, this week and next week, at the MINIMUM, trying to pick up a few nickel's and dime's, as the market's will probably be gapping all over the place, based on who said what in the post and pre-markets. Capital preservation will be my main goal.
The Q's are only down 17 cents in the premarket, but the low of the premarket was 32.70, which also, amazingly, is the exact low they hit at about 9:am friday, the prior little pivot low on the 5 min charts. If we get under that 32.70, it's just POSSIBLE, we could easily take out friday's low, and MAYBE, go after the gap fill from thursday, at around 31.96, just some thoughts.

Good luck out there.

Fixed Incomer's

5:45pm: Futures are down tonight, DOW about 50 points, some people would blame it on the civil unrest in BangKok, congratulations to 40 year old Angel Cabrera on defeating 49 year old Kenny Perry, to win the masters. I actually turned it off after Mickey hit it in the water on 12, sigh, I didn't want to stick around to see Woods beat him again, in a head to head match up. At least he hung on to beat Woods, that was a little victory, anyway.

It's kind of weird, but I was listening to a guy yesterday talking about oil, and that with the poor economic conditions in the world, we could be heading for disruption of oil supplies, due to civil unrest, and here we are, starting already. He identified 37 countries in the world, where civil unrest is a real posibility, and could disrupt oil supplies. Naturally, the third world country right at the top of the list, is the U.S.A.

I've been studying some thing, that might be of interest to you fixed incomer's, like, ME, I got in Vanguards high yield corporate bond fund, VWEHX, quite a while back as a matter of fact (to be truthful, right at the EXACT bottom, hahahahahaha, yeeeeeaaaa, rrriiiggghhhttt), and I've been watching it's relationship with the VBLTX, total bond market, I get data back to 1999, and they actually do move kind of inverse to each other, meaning, you can get some protection on the high yield crap by using the total bond fund, the high yield has a yield of about 11%, while the total bond yield's about 4%, so on a split you could boost your total yield up to around 7%. That's the top chart.

The bottom chart is the TLT and HYG, I bring this up, because they can be used for a trading vehicle, and still get some decent yields, the HYG yield's 11.5%, the TLT about 4%, PLUS, they both trade options, MEANING, you could pick up a CONSIDERABLE extra yield, by doing a monthly covered call play on both of them. If you can figure out how to trade them, you would cover which ever one looks like it's going to go down, etc etc, or, if you can't trade worth a damn, like, ME, you could do an out of the money call sell on BOTH of them, like, on an ATR basis. There's not enough data on the HYG to get any kind of long term perspective about how well they trade inversely, but just on the two years data above, they do so fairly decently.

Naturally, some thing like this would only be done in conjunction with your total allocation plan, maintaining your constant percentage's in the various asset class's, and rebalancing as prescribed. See your local dentist for more information.