Back on May 13 in a post entitled Gold and Bank America, I posted a chart of BAC and hi-lighted a large pennant forming on the daily chart. I indicated the pennant was worth $15 pts. I have posted BAC's chart again (above) showing what has transpired since and also provided a longer term view of where we may be headed.
The pennant is worth about $15 pts and given the breakdown occurred at roughly the $36 level it would imply a $21 target. Well oh well, lo and behold some previous support right in that vicinity. Not only is the pennant broken but today we have taken out the lows $32.50 made in late January which bodes further ill for not only Bank America but the entire financial sector and as regular readers know, as go the financials so go the overall markets. Readers also know how I feel about these guys at Bank America and their gallactically stupid decision to buy Countrywide. Make no mistake, this BAC/CFC deal WILL get it's own chapter in the highly popular yet to be published book entitled......
'How To Blow Up in Spectacular Fashion Averging Down !
Moving on to Lehman, you just gotta love the machinations of Wall St. Survival is quite an instinct as anyone who has studied animals in the wild will tell you, but watching Lehman use ratepayer money via the Fed windows, (whether it was accessed now or previously doesn't matter), to prop up their stock. Yup, no liquidity problems here at Lehman are there Mr. Fuld or Ms. Callen.? Use what little capital you have left to buy stock in the open market. Easy to do when it's not yours isn't it! Same thing happened in the 29' crash, the names change but the game of manipulation remains the same, thugs, the lot of em', plain and simple. You deserve the fate that befalls you when you listen to anything that comes out of the mouths of people of this ilk !
Speaking of listening to people, I want to comment on the chaos among the beautiful hosts on pom pom TV yesterday and today. You basically see this every time the market has a triple digit drop which really is insignificant in the big picture but seems to leave all the cheerleaders breathless. As an aside, why do you think I continually think of the Spartan cheerleaders Will Farrell and Cheri Oteri from Saturday Night Live when I watch the host and hostess' on CNBC ? (click this link Chess team cheer , it's hilarious)
Anyway, notice the why is this happening, whats going on, etc. This will continue to happen and in fact get worse as the market deteriorates. Remember these are the ramblings of people, like the polyannic sage himself Dennis Kneale, who know nothing more about the market than the average joe six-pack walking the street and in fact may know less as joe six-pack has some common sense and at least knows the difference between common stock and livestock. I write this because many trade off the ramblings and promotion of these people. The public perceives the likes of "it could be much worse given the news" Bob Pisani, "we're off the lows of the day" Maria Bartiromo, and Dylan Rattigan aka 'the pontificator' as experts on the markets, when in reality they are just bingo callers. I can almost assure you that in their own minds they are wizened market experts in a bull market and plain old journalists just reporting the news in a bear market. Just like the financial players they report on, heads I win tails you lose.
Good speculating to you all.