The Dollar

A couple of very interesting developments have occurred on the UUP, which is the U.S. dollar bull fund. The down trend line was broken to the upside back on Oct 26th on better than average volume. Next up, we have since backed, filled and tested that break out area, and today have blasted off that area with monster volume. For what it's worth, volume today was the highest in UUP's history and this speculator is paying attention to it.

I am also paying attention to the lacklustre volume in all the major indices tracking shares. The SPY's, the IWM's, the DIA's and the MDY's all experienced lower volumes today as the cheerleaders rejoice. The one exception is the QQQQ's which had heavier volume, attributable to Cisco, who knows, who cares. I only am noting that 4 0f the 5 index tracking shares showed significantly lower volume on today's rally.

Ahhh what the heck, maybe this is just all useless drivel and one should just stop thinking and simply buy the dips like Bill Miller over a Legg Mason likes to do with pensioners money. (or maybe not!)

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

Some Golds

Goldcorp, ticker GG weekly view (above)
.
GG daily view (above)
Agnico Eagle Mines, ticker AEM weekly view (above)

AEM daily view (above)
Kinross Gold, ticker KGC weekly view (above)

KGC daily view (above)

Royal Gold, ticker RGLD weekly view (above)

RGLD daily view (above)

Regular readers know my affinity for gold. I believe gold is money. Gold is also peace of mind. Gold is insurance. Gold also cannot be turned into a collateralized piece of toxic garbage, (though many would vehemently argue an Ivy league MBA with a large enough carrot ($$$) dangled in front of his/her nose by Goldman Sachs may very well succeed)

When I place a bet with a bookie, I want to make sure he can pay if I am right cause you can bet your ass I will have to pay if I am wrong. So unlike AIG and all the other assorted fictitious wanna be playaz, gold is the ultimate bookie. It always pays!! It always honors it obligations. It always pays its claims, it always cashes its withdrawal slip.

That said, and this is not new news to regular readers, I am extraordinarily concerned with gold here.

Yes I know the gold bulls are pounding the table and rightly so. Forget for a moment that buy, buy buy Jim Cramer is bullish on gold. The difficulty I have is that we are in a deflation depression and every time in history every inflationary or hyperinflationary scenario was immediately preceded by a deflationary depression.

The current mantra is to de-leverage, (in spite of Wall St. trying in vain to lever up with their government via taxpayer sponsored back stop) and pay down debt. Wealth destruction is vastly outpacing money creation by the Fed and Treasury.

I fully accept the argument that gold can and should go to $1200, $1300, $1800, $2200 or even much higher. The issue I have is that gold may do this, only it may do it via a scenic detour down thru $720 or $770 first. I know the bulls don't want to hear this but the fact remains it could do it, all without damaging the longer term picture.

I bring this up because the average market participant cannot sit thru this type of event, emotionally nor financially. I bring this up because the bullish gold drums are being beaten quite loudly. This is happening in the face of a massive negative divergence between gold and the gold stocks which continues today, ( re: my post Gold and the Buck) in which bullion is making new high yet the stocks, as measure by GDX and $HUI are not.

I continue to remind speculators that in a healthy gold bull market, the stocks should be leading the bullion not the other way around which is exactly the scenario we have currently. Now this may correct itself with gold shares busting to new highs but I humbly counsel that you can ignore this if you wish but it could very well come at a high cost.

I have hi-lighted some of the leading gold stocks (above) along with some comments on their current state(s). I would also encourage some of the gold bulls to consider how they would analyze their charts if they didn't know what they were looking at was a gold stock. Just a thought.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

Just a Couple of Facts

In what can only be termed keeping the faith, after quite a day on Wednesday, CNBC along with Bloomberg were out in full pom pom mode.

First up we get this "breaking news" video of Tyler Matheson of CNBC in which he has taken it upon himself, given the egregious sell off in the indices, (DOW down 119 mind you) to do an informal survey of a 1/2 dozen or so TOP Wall St. strategists.

The survey shows the market HAS NOT peaked for the year there's almost universal agreement there" that the market will be higher by year end.

See it and hear it for yourself here.

Next up we get Bloomberg pouncing on the wonderful rally Thursday, (Dow up 200) with this beauty of a piece in which a couple of critical thinkers had this to say;

“The fourth quarter will be the Waterloo of the bears,” said E. William Stone, who oversees $102 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “We are in economic recovery both in the U.S. and globally, so you will eventually see revenue growth because you are seeing the recovery hold.”


“The stock rally is not over yet,” said Jeffrey Kleintop, who helps oversee about $247 billion as chief market strategist at LPL Financial in Boston. “The stock market can celebrate. This news is an important confidence boost, in particular to individual investors.”

Never fear dear reader as its only the funds in your IRA/401k that critical thinkers like this are managing. Heads they win tails you lose.


Yesterday was without question a wonderful rally for the bulls, with the Dow up 200, just remember to note a couple of small overlooked facts by these purported objective analysts quoted above.

• The volume on the Spiders, ticker SPY was 25% higher on Wednesday's down day (248.7 million shares) vs Thursday's up day (198 million)

• The volume on the Naz, ticker QQQ was 40% higher on Wed. (143.5 million) vs Thurs. (85.1 million)

• The volume on the Russell ishares, ticker IWM was 13% higher on Wed. (84.9 million) vs Thurs. (73.6 million)

• The volume on the Diamonds, ticker DIA was 24% higher on Wed. down day (17.17 million) vs Thurs. up day (12.92 million)

But why let a couple of innocent little facts like lacklustre volume get in the way of a good pump. Further why let the inside days that the QQQQ, IWM and MDY experienced yesterday prevent a celebration.

I want you to consider this thought if only for a moment. Wednesday's big down day unleashed lots of concern, lots of palpitations, lots of worry. What better way to embolden the bulls, what better way to squelch the skeptical bulls, what better way to humiliate the bears than to reverse course immediately, gun the market up shaking loose all the worry warts who had trailing stops and make look stupid (remember Art Cashin said looking stupid is the biggest fear on Wall St. more so than losing money !!) those that sold and then missed the next day rally.

Yesterday was what some call "the hook", where participants will now ignore and be desensitized to the next sell off expecting the recovery rally soon after. The tech bubble was full of them, until it wasn't any more.

Ahhh heck, none of this means anything other than the ranting of a delusional perma bear, right? Just remember to be consistent and keep calling me such, even when I do get 'pounding the table bullish', which I will. Odds are when I do that, most won't have the nerve to come out of their house, let alone buy stocks.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

Guilty of Sedition

U.S. Steel (X) daily chart above. My apologies as for some reason my notes cut off on the above chart. It should read,

"Does this chart of U.S. Steel tell us all we need to know about the economy?"

Nucor (NUE), daily chart above.

Transports i-shares (IYT) daily chart above.


Noteable Noteables

IBM - gapped down last week. Yesterday in the face of a further $5billion stock buyback, near all time highs mind you, barely finished up on the session.

RIMM - breaking July lows.

GDX - failing to make new highs as GLD has. Note SLV has not made a new high either. By the way, I see Jim Cramer likes gold, does that make anyone out there nervous as all hell.

RGLD - the undisputed leader of the golds failed to make a new high.

AA - Gap and crap still intact.

INTC - the same as AA though tech is still the go to pitch for most fund managers.

GS - has Stephen Friedman, that stock picker extraordinaire sold his position yet? (52,600 GS shares @ $76.66)

GMAC -needs another $3 billion, is this just a bad dream. Yup, keep poring money into that winner, just what every prudent businessman would do, right? Sorry I forget the politicians run that baby now, in that case expect $5 bill.


Financials

The big banks and financials have simply become gambling crack houses. I will exclude for the moment, but have not forgotten the pension funds with their market losses and unfunded liabilities. With taxpayer money as their backstop they are gambling on markets and assets pure and simple. I call it gambling and not speculating because when you do it with someone else's money and never suffer the consequences it is gambling, heads they win, tails, you and I lose.

To use a blackjack metaphor, there is an enormous hand of double down going on by many of these institutions. Trading, as they like to call it as it is coctail party inappropriate to call it gambling, accounts for the lions share of their revenue as all other arenas have dried up. This has to stop right now.

As I have said before like children playing a pee wee soccer game, all participants chase the ball, or in their case, the same trade. This is now being facilitated via the dollar. I cannot say this any more succinctly, WHERE ARE THE ADULTS? Are there none in Washington who see this grand heist of the century? Are there no patriots in power who see this for what it is?

Sedition

I have read and listened to how Time writer Joe Klein has accused the Fox News channel of being guilty of sedition, which is absolutely comical, but since we are on the subject lets talk about sedition.

Yes Mr. Klein, let's talk about the those who are really guilty of sedition. They reside in Washington and Wall St. and the Treasury and the Federal Reserve. I have said before that the policies, the remedies, the fixes we continually get from our elected and unelected leaders are so perverse, so counter productive, as to lead me to believe they have designs to see the republic implode.

They saved us from armageddon you say? Prevented us from falling into the abyss.
Really ?
How?
By papering it over with money they don't have?!
With FASB suspension of accounting rules by a shocking 5-0 vote?!
With trickery and gimmicktry?

I have previously counselled on numerous occasions that the answer to it all is to do NOTHING, absolutely nothing !

Let failures go under. The dead must not be kept on life support.
Stop the bailouts. Stop the handouts.
Immediately close insolvent institutions the minute they are discovered.

Am I such a simpleton as to make DO NOTHING the answer?

Or is the answer so sophisticated that only the 435 house of representatives and 100 senators, most of which are lawyers, are only qualified to figure it out? With the advice and counsel of their trusted lobbyists of course. How else could a house representative vote for a bailout bill that was opposed by his/her contituents by a 99 to 1 margin only to be charged after the fact by King Henry and the clowns!

But back to Mr. Klein and his accusations of sedition. You want sedition charges Mr. Klein?

How about you try starting with a government agency responsible for supervision who aids and abets fraud. Like the obfuscation and obstruction that the Office of Thrift Supervision did with IndyMac. When banks that a freshman accounting major knows should be closed and are not leading to exponentially larger losses due to this is akin to knowingly letting the cancer spread from the foot to the calf and then to the thigh and now having to amputate the leg.

Or how about you try with Goldman looting the treasury in broad daylight via a pass thru from AIG to the tune of $13 billion on derivatives that were worth a pittance of that !

Or how about former head of the NY Fed who was DIRECTLY responsible to regulate the banks activities in that district (re: Bear Stearns, Lehman, Merrill) yet does not. Is that not sedition when it threatens our economic viability. No Mr. Klein, in our system, that person is not charged with sedition, rather he is promoted to Treasury Secretary !

Or how about a Fed chairman who refuses calls for details (from elected officials mind you!) as to who has borrowed from the Fed and what was posted as collateral for said loans and yet REFUSES to answer these questions. In what can only be termed the height of hubris, then he goes to court to prevent it.

Is any of this not sedition Mr. Klein?

I am no defender of Fox News Mr. Klein but I would humbly suggest you aim your charges of sedition at more appropriate targets.

Just wanted to get that off my chest.


Housekeeping notes;

Yesterday I was stopped out of 1 unit of UEC at $3.09 for a loss of just over 1/2 pt on 1 unit.


Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

Art Cashin

No mattter how many times I get to hear Art Cashin it never gets old. I mean here is a cat with 50 years experience. Seriously, this phrase gets tossed around haphazrdly but this dude has truly forgotten more than most on CNBC will ever know.

This recent interview with Mr. Cashin is must viewing. even considering Bob Pisani was conducting it and who would do well to ditch his incessant dining with hedge fund traders and just follow Art Cashin around all day with a pad of foolscap and a pen as he would learn more in an hour with Art than a lifetime with the Canali wearing, cupcakes from Ivy league row.

The classic absolute classic line of this interview is wherer Mr. Cashin's line of;

"people actually risk money not to be thought stupid."

I have often said this but as usual Art Cashin does it in a way that only he can! I want to re-read that quote again and again so it burns into your brain so you can remember that this is the mantra of the guy or gal managing that growth fund in your IRA account or that balanced fund in your 401k. It is the foundation for the mindset of the vast majority of Wall St. and Ivy League MBA programs. You would do well to understand this as then things will start to become clearer, most especially (and I say this yet again), as to why we find ourselves in the pickle we are in.


Housekeeping notes;

Monday Oct 19 of last week, I was stopped out of my TWM position at $26.40 for a loss of just over a pt. on 1 unit long. My apologies for not posting that properly at the time.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Uranium Energy ticker UEC @ $3.60 stops @ $3.09

Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

Could it Really be This Simple

My niece, who has recently entered the work world from college brought the following article, out of the New York Times by a Calvin Trillin entitled Wall Street Smarts, to my attention.

In the piece Mr. Trillin proffers via his friend, imaginary or not, such a simple explanation for the Wall St. debacle that many would dismiss it as almost too juvenile to even consider. but maybe just maybe he is onto something.It is a quick read which in no way should diminish the enormous amount of sense the writer makes. You can click the link above and go straight to it.


I offer my Congratulations to Mr. Trillin for his simple yet clever explanation of the issue and as readers know all too well simple everywhere and always resonates very well with this cat! Maybe it could be this simple !

This now leads me to this next piece, compliments of the Temple of Mut blog, which was brought to my attention by W.C. Varones blog. (thanks indeed)

The article Vote? What Vote? I don't Need NO STINKIN' VOTE! details the hubris of yet another of the privileged few who believe they were born with a better pot to piss in and the politicians are their exclusive property, there to do their bidding. And the voters? Hell, they're just an inconvenient little nuisance.

Only a mindset like this could permit a statement like the following;

'A key backer of building San Diego a new $432 million City Hall argued against a public vote on the project Thursday, saying the general public won’t be able to understand it.

“There’s less than 1 percent of the citizens in the United States of America that understand the complexity in how to put these kinds of projects together, so why would we want to ask the other 99 percent?” said real estate mogul Malin Burnham.'

This quote comes from real estate mogul Malin and sums up succinctly how the politicians, the bureaucrats and the elite of this country view the masses. The tip toe around it, they never come out and say it, but if you have a room temp IQ, which I do, you can hear it..... "let them eat cake".

Didn't the last person to utter that have a date with a guillotine? My memory is kinda spotty lately.

So in putting these 2 seemingly unrelated pieces together you get one big game of Baffle em' with Bullshit, on a scale so grand as to make Charles Ponzi himself blush. Yes, make the deal seem to be so intricate, make it so convuluted and opaque that you need to be sitting in a marble chair with the thermostate set at 55 degrees to even begin getting a handle on it, thus convincing the boob on the other end, (Jefferson County et al. anyone?) sophisticacy = intelligence.

Time out while I flashback, in my former life as a broker, to an Italian client of mine who has passed on, (rest his soul) who had very little formal education but who managed to do quite well by anyones standards. One day I was explaining some fixed income investments to him, and before I could even get started he emphatically interrupted me and stated with no hesitation that if I could not show it to him with a pen and pencil on a scrap of paper in front of him he wanted nothing to do with it.


You want to talk about the type of man that should be running our public finances at all levels! Work ethic, humility and street smarts, at least enough smarts that allowed him to stay out of the clutches of the cash'carry thugs on Wall St. and K Street.

Now how do you think a man like this, lets say had fallen victim to either a momentary lapse in judgement or a stunning exhibition of baffle em' with bullshit, would react when he finally realized a baffle em' with bullshit fraud had been pulled on him?

Exactly !!

Now imagine how 'Mr. Market' will react when it finally awakens to a similar realization, that being the MBA hawkin', formulae talkin', buzzword droppin', Dr. Frankensteins has bamboozled. Just as Mr. Trillin over at the Times described. Can you say "no bid".

I don' t even want to consider how 'Mr. John and Jane Q Public' will react to a similar realization, don't even want to consider it!

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Uranium Energy ticker UEC @ $3.60 stops @ $3.09

Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

The Music is Playing..... Are you Still Dancing?

I want to bring your attention to a chart of the S&P tracking stock the Spiders, ticker SPY. (chart above). I have adjusted the chart to a color function which will show the up days as black and the down days as red. Just as, if not more importantly, the volume is also color coded for you.

As my notes indicate notice how the volume expands on the down days (red) and contracts on the up days (black). As Art Cashin always says "volume equals validity" and as I was always taught, it takes a lot of volume to put a market up and a mere lack of volume to put a market down.

Further if you look at the entire volume trend of the market since the lows in March, it has been steadily declining. This can only go on for so long. I realize I am the ultimate simpleton focusing on such uselessly mundane items like lacklustre volume. It is much sexier to focus on how cheap the market is against metrics like 'operating earnings'.

Oh yeah, just in case you forgot, operating earnings is the funny little thing concept that got popular in the tech bubble to justify valuations which excludes write offs. You will never hear any of these cheer leading, book talking, stock selling shills on CNBC give the reported earnings because the hair on your neck would stand up.

You can listen to the stock jockeys on CNBC, the purported experts everywhere and always touting that buy stocks. The same ones who were singing the same song back at Dow 14,000, 13,000, 12,000, etc. All the way down.

I would also remind you, as I have blogged before on this, that both Intel (INTC) and Alcoa (AA), have gapped and crapped on their earnings. Both are now below where they were prior to the earnings release.

IBM and Goldman Sachs(GS) both ran up prior to their earnings release and have both since gapped down lower.

Rising unemployment
Rising foreclosures
Rising commercial real estate vacancies
Rising bankruptcies
Rising credit card delinquencies
Rising debt to income ratios
Rising government hubris that more heroin (credit and debt) will fix the addicted patient (this could be the most dangerous of them all)

Ignore these little nuggets of facts and subscribe to the hope and fantasies of the vested interest parties (politicians for votes, Wall St. and NAR for commissions) at you own peril.

This has been an extraordinary rally, the type dreams are made of with the SPX trading just shy of 1100. I would counsel that one think back to how they felt back in March when the S&P was trading under 700. My guess is you were saying things like, if this sunavabitch ever gets back up to (fill in your number here) I am out of this shit. Am I close? Did it sound something like that?

I would strongly urge you to ask yourself how you will feel if you sit tight and we ride back down to 700. I have counselled many friends and associates (who have asked and believe me, given the buoyant run many have stopped, which is standard operating procedure in rallies) that selling into this strength might be an opportunity we might not see again for a very long time. Its too bad I cannot bring over some Japanese retail momma san and papa san investors from the late 80's who might be able to offer one some counsel on their experience with the Nikkei since then. In case you are not aware the Nikkei was just shy of 40,000 back in 1989 and currently stands at 10,300. And yes, you are reading that correctly it is not a typo!

Speaking of how you feel. Think back to 1999-2000 when the tech bubble was frothing over. Was anyone talking about gold, crude oil, commodities? I thought so. Think back to the surrounding circumstance of that era. The "story" on tech stocks and stocks in general was phenomenal and no matter what the naysayers had to say, of which I was one, stocks powered higher and higher, defying all logic and reason. Eventually it ended.

The first leg down of the markets in this return to equilibrium if you will really roughed up the individual stockholders or what was left of them after the tech bubble. The current rally that CNBC rams down your throat, is very similar to the relief rally the market experienced in 1930 after it's first leg down. Like the rally in 1930 drew in the professionals who thought the coast was clear to buy stocks, this relief rally will take care of the professional investor once again. Back then they were called trusts and today we call them mutual funds. These along with pension funds and various hedge funds are the ones buying today, on your behalf mind you, for they have nothing to lose as they get a pink slip more quickly for missing out on a rally than sitting though a decline.

So yes dear reader, loathe the banks, loathe the private equity boyz, loathe the insurers and whatever else has benefited or is about to benefit from your benevolent administration, (republican or democrat mind you!), you most probably own em' anyway. The irony of this is almost too much to bear.


The point here what all my mumbo jumbo about how you feel is this. This current rally, no matter how much the vested interest, commission chasing, my livelihood depends on a vibrant stock market shills and hacks repeat over and over to you, is not how major, true blue, bonifide, lasting bull markets are born.

Rather they arise out of abject pessimism. Under the environment where you have to be loonie toons to buy them. Where people swear off stocks for good. Where the employment ranks on Wall St. plummet. Where applicants for broker licensing and CFA designations plummet to nothing. Hey, kinda like we saw at the bottom of that energy market back in 1999-2000. That flush out decimated both the skilled and unskilled labour in that field and what the economics didn't do time did, as those who did survive and stick now are passed on or retired, hence the massive shortage of skilled labour in the field as things recovered.

It took some serious onions back in late 1999 to buy gold in the mid 300's or crude as it was trading around $12. You would have been flying in the face of legendary performing names like Nortel, JDSU, Qualcomm, Razorfish, Foundry, etc, etc... Surely you remember how Microsoft's market capitalization was larger than the entire publicly traded gold sector. How many paid attention to that type of extreme? Few I can assure you.

It is of course possible that this was and continues to be the start of a new mother of bull markets. I just do not see the parallels regarding sentiment, participation a general swearing off off or revulsion to stocks for good by the public, which generally occurs at MAJOR bottoms.

CNBC and that NASA employment candidate Dennis Kneale did me a huge favour the other day, as they were discussing the number of bank failures. Mr. Kneale was emphasising how few there have been to date compared to the prior S&L crisis. To which I say; "my point EXACTLY!"

How can you come out of the mother of all credit and debt bubbles and have only, what, a hundred or so bank failures? How many home builders have failed so far? How many loaded to the gills with commercial real estate insurers have dropped? You can count em' on one hand which just fails the smell test on a true bottom, for me that is.

Wall St. like Vegas, needs a constant flow of sheep to shear. Please don't fall victim to the virus that affected many like the legendary Chuck Prince, former CEO of Citicorp who said so memorably back in July of 2007 the following;

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing".

Everyone always thinks they are smart enough to find that chair when the music stops. Please take care of yourself and make sure you have a seat when the music stops because none of the shills on CNBC ever will.


Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 1 unit Direxion Small Cap 3X Bear ticker TZA @ $11.35
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 1 unit Direxion Financial 3X Bear ticker FAZ @ $19.09
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Uranium Energy ticker UEC @ $3.60 stops @ $3.09

Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41