Tuesday, September 30, 2008

Getting Long Gold - GLD

I am getting long 1 unit of the Spider Gold shares ticker GLD. This is the same one that used to be called the streetracks gold trust.

I am now long 1 unit of GLD here $86.75 with a stop at $83.59


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

Open Positions:
Long 1 unit of Spdr Gold ticker GLD @ $86.85 stop at $83.59
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

The Morning After

Where oh where have the short sellers gone? Did you notice the lack of bids on many stocks yesterday afternoon. Punch up a 2 minute intraday chart on many stocks and you see lots of blank holes in the chart. To this you can thank Chris Cox for. Now we cannot say he never did anything for now he surely has.

I keep hearing voices, like Larry Lindsay and Newt Gingrich calling for suspension of mark to market as this will be the panacea the market is looking for. Newt has some concrete ideas but whoever is advising him and others on this matter need their head examined. This ignoring of fact will do nothing to address the problem and quite frankly is one of the major contributors to this mess.

It defies common sense and logic that they would promote this hogwash. Under this logic, in the aftermath of the tech bubble we should have suspend mark to market pricing. This was the Nasdaq never would have fallen 80% and everyone would still be solvent. Unfortunately that is not the way capitalism works. Under this hold to maturity the tech stocks would come back and be whole. Have you looked a some of the tech stocks from the bubble lately? Here we are 8 yrs later. You want more evidence, look no further than Japanese equities and real estate. Water seeks it's own level and you can rest assured the pricing on this toxic paper has found its own level. We don't like it and can kick and scream all we want it will not change the situation.

Be prepared for the touts to come out telling you to not panic, average down, stay the course. The same old playbook, which I have documented at length previously. I want to ask these pundits how that strategy worked with Japanese equities over the last 18 yrs. How did this strategy work with tech stocks over the last 8 yrs. How did that strategy work in the aftermath of the late 20's ? The U.S. equity market of the late 1920's did not get it's collective head above it's high water till 1953-1954.

This is fact which I share with you so you have some perspective. And if still inclined to listen to these biased experts who never met a market they didn't like, I hope you time horizon is calculated in decades. If so then more power to you and happy stock hunting to you.


Housekeeping notes;

I was stopped out of my long AEM position at $55.80 for a loss of about 4.5 pts on 1 unit.

I was stopped out of my long ATPG position at $16.90 for a loss of 1.5 pts on 1 unit.

I was stopped out of my long UNG position at $31.85 for a loss of 4pts on 1 unit.

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

Open Positions:
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Monday, September 29, 2008

Financial Sanity

So now we shall see if the politicians have the backbone to continue to do the right thing. The voting down of this bill is a start but this a long road. There are many, many traders and hedge funds who made bets predicated on the passage of this bill, Warren Buffett being one of them. CNBC is now trotting them all out to whine and bitch about how congress is not doing the people's business.

The stock market will now try to bully congress into passing something, anything so they can be made whole. Congress needs to be braced for failures, banks, hedge funds, traders, businesses as this is how capitalism works. Poorly capitalised, over leveraged, poorly managed, entities fail. This failure makes room for new and improved businesses and ideas to take their place. Do not believe those of little faith in capitalism when a storm blows in.

Ignore the fairweather capitalists !!

I would counsel any and all congressmen and women to not let the myopic floor traders and hedge fund managers who are stuck in their positions to reconsider the vote. Profligacy caused this and it sure as heck will not solve it.


I have to give Warren Buffett credit, you do not see him crying in his bowl over his Goldman investment form last week. He is a big boy and understands with great gains come great risk. Grovelling Bill Gross could learn a thing or two from Mr. Buffett on how to handle adversity with a little class.

Give more money to the FDIC both for insurance and for audit. INSOVLENT BANKS MUST BE CLOSED IMMEDIATELY.

I will agree with Cramer on one thing, deposit insurance limits should be raised 500k to a million sounds reasonable. $700 billion to shore up deposit insurance would do wonders for confidence. But this is just my opinion.

Next is transparency, FULL and IMMEDIATE on the part of financials. No transparency, you are shut down. No charter to operate period. The game must have rules or people will not particpate.


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

Open Positions:
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Long 1 unit of US Natural Gas Fund ticker UNG @ $ 35.70 stop at $31.89
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 1 unit of Agnico Eagle ticker AEM $60.20 stop at $55.89
Long 1 unit ATP Oil & Gas ticker ATPG @ $18.45 stop $16.98
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Shorting the Long Bond.


The time has come to take the opposite side of this trade. We look to have filled the gap down from last week. The bailout bill is total garbage, just like the paper it will buy and the claims we all will make money on it, utter garbage. But his matters not a whit as self preservation is a stronger instinct in Washington than moral fiber or patriotism.

That said, I am punting the long U.S. bond on the short side. That is, I am getting short the long bond, betting prices will be falling and interest rates will be rising. The die has been cast whether we like it or not. Bailout or no bailout, recessions still exist though many wish they didn't.

I am long 1 unit of the Ultrashort 20yr. Treasury ticker TBT at $60.40 with a stop at $57.32



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

Open Positions:
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Long 1 unit of US Natural Gas Fund ticker UNG @ $ 35.70 stop at $31.89
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 1 unit of Agnico Eagle ticker AEM $60.20 stop at $55.89
Long 1 unit ATP Oil & Gas ticker ATPG @ $18.45 stop $16.98
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Getting Long ATP Oil and Gas - ATPG

I want to bring to your attention ATP oil and gas ticker ATPG (chart above). I hilighted this last week and with todays action we seem to have a change in the patten. What looked to be an inverted head and shoulders, now appears to be forming a double bottom. I am comfortable a getting long 1 unit here of ATPG at $ 18.35 with a stop at $16.98

Some may say how can this be with the pattern changing. This is precisely why we must remain flexible, tuned into the charts and watching them always alert for changes and never, ever married to our positions. We are married to our spouses, our sports teams but never our positions.


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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Long 1 unit of US Natural Gas Fund ticker UNG @ $ 35.70 stop at $31.89
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 1 unit of Agnico Eagle ticker AEM $60.20 stop at $55.89
Long 1 unit ATP Oil & Gas ticker ATPG @ $18.45 stop $16.98
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Friday, September 26, 2008

Getting Long Agnico Eagle - AEM

I want to bring your attention to Agnico Eagle ticker AEM a Canadian gold producer. We look to had experienced a double bottom which occurred right at long term trend line support. Missed that but we are now getting a correction back to the mid-point breakout. I am now long 1 unit of AGE here at $60.10 with a stop at $55.89


I want to tell you bluntly and matter of factly that Washington can attempt to do whatever they want if will only postpone the inevitable. Many will not want to hear this but we as a country have mismanaged our affairs public, corporate and personal. We have borrowed from tomorrow to pay for today. The scare tactics they are using to push this garbage legislation through are fair as I believe there is much economic hardship ahead. The employment, savings, and fiscal numbers all point to it. Did you see the unemployment numbers yesterday, the durable goods numbers, the housing numbers for KB this morning. Yup everything is bottoming.

Spending this money will not do a thing to resolve the massive unemployment and long overdue recession which is headed our way. Better to save this money which will be sorely needed when the government finally acknowledges where the unemployment rate truly is. (in my opinion closer to 10%, and others smarter than I think 12-14%). This spending program will create no jobs, no growth, nothing for the economy. At least they could build a bridge to no where and then we would at least have a bridge to show for it !

Some have suggested a massive public works infrastructure project for this type of money 7$00 billion which I would wholeheartedly support. Bridges, water and sewer infrastructure and most importantly mass transit. You think peak oil has disappeared due to all of this? Well, think again.

When you have a medical condition, the longer you delay treatment the worse it gets. We have been living under the polyannic delusion propagated by lying politicians and appointed officials that all is well, the economy is resilient and everything bad is contained. We have been under the hysterically funny impression that recessions have been abolished to the history books. We have been conditioned, like lab rats, that the federal government, via fiscal and monetary alchemy have the secret formula to maintain perpetual economic nirvana.

You can only put off paying the piper for so long. He never showed up for payment so we all thought he had forgotten about our obligations. Well, the piper has arrived and he is looking to be
paid, the problem is we don't have the money. I DO NOT WANT TO HAVE THIS HAPPEN, but just like a hurricane from mother nature there is nothing we can do about it. We must acknowledge that it is headed our way. We have to make preparations. Are you going to flee for safer ground, or act as if all is well.

A severe recession is coming no matter what this bill looks like or smells like. Throwing money down rat holes is what got us into this mess and this bill is no different. Funny how so many believe that more of the same, which is what got us into this mess, will somehow miraculously cure it. Absolutely stupefying in it's idiocy.

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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Long 1 unit of US Natural Gas Fund ticker UNG @ $ 35.70 stop at $31.89
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 1 unit of Agnico Eagle ticker AEM $60.20 stop at $55.89
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Thursday, September 25, 2008

So Washington Wants to Solve a Problem.


I would suggest that the lawmakers in Washington have a look at the above 2 charts of Washington Mutual and Wachovia. It may cause them to think twice about blowing $700 billion on absolute garbage paper under the guise of saving us all.

I would also suggest that if they think they have a problem now, they had better hope the above charts are completely and utterly false, for the move now is to shore up the FDIC fund here and now. You want to talk about an issue main street cares about ! I am not an accountant but from what Ms. Blair over at the FDIC has been saying as of late, things are not so rosy over there. Some have suggested that a failure of an institution like WAMU would, shall I say, seriously impair the FDIC's insurance account.

The charts above should worry Ms. Blair and the intellectuals in Washington for they worry me a great deal.


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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Long 1 unit of US Natural Gas Fund ticker UNG @ $ 35.70 stop at $31.89
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Wednesday, September 24, 2008

Getting Long Natty. via UNG

I hi-lited the natural gas chart, (ticker UNG) a couple of days ago suggested we watch it closely. The time has come for me to do more than watch as I am now long 1 unit of UNG at $35.60 with a stop at 31.89. We look to have broken a trend line of some significance. Also a small gap up from last week is still open which is a positive sign.

As my notes indicate, Plains Exploration ticker PXP (chart above) show an inverse head and shoulders having formed. I intend to get long 1 unit on a move thru $40.50. Take the time to punch up a weekly chart and you will see a nice looking hanging man candle on some volume which can be a signal of a bottom.

I have been watching my former friend ATP oil ticker ATPG (chart above) and want to get aboard this on a move, and more importantly a close above $23. The weekly view on ATPG also shows a hanging man on the candlestick chart.




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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Long 1 unit of US Natural Gas Fund ticker UNG @ $ 35.70 stop at $31.89
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Mid Week Thoughts

I caught Larry Kudlow's show last evening and his interview with former FDIC chair Bill Isaac. The Mr. Bill Isaac of mark to market accounting is to blame for the mess we are in. Remember this is a former FDIC chair. He believes the market is wrong and he is right! He claims the toxic securities everyone and their sister believes are garbage are in fact valuable and are trading at fire sale prices. To be precise "they are trading below their worth via an economic analysis".

Astounding. Truly astounding. Not exactly the kind of stuff that lets you sleep well at night. I would prefer he we the local JV basketball coach and not a former FDIC chair. My question for Mr. Isaac is that if his claims are true why is not the smart money, like himself in particular, buying em' up? Should not his insightful economic analysis show the value clear as day with everyone tripping over one another to buy them all up. Funny how Kudlow wouldn't even ask him this but unfortunately he cannot as that would demand unbiased analysis which is hard to do when you are jumping around cheerleader with delusional friends like Vince Farrell.

Vince seems to really like Buffet's 5 billion investment in Goldman with an option to extend it to 10 billion. Mr. Farrell was really excited about this to which I would add that if Goldman employs their standard 25 X leverage this investment could really be 250 billion Vince. I am sure Vince wishes the investment had been in one of his pets like GE but I am sure he will take this for sure. I must credit Mr. Buffett for putting his money where his mouth is and you can be sure the pom pom network will be out in front early and often, glorifying this move, egging you to get in this market. Almost to the point where they will make you feel stupid about not. I sure hope Mr. Buffett did his due diligence on the Goldman transaction and hopefully it involved a team of forensic accountants.

Also on the Goldman subject, funny how Goldman stock spiked the last few minutes of the day as the market was tanking. You think Chris Cox will investigate friends of Hank? Don't count on it.

It is my opinion that what you have on financial television, in particular CNBC, is a bunch of scared out of their wits, long of stock, can only function in a bull market, where is my Greenspan put, make believe money managers hoping and praying for a miracle. You see these guys and gals bought this market all the way down. They did this because like trained seals that is what they have been conditioned to do. It is that simple.

I also caught Rick Santelli on Kudlow's show where he said something I must repeat to you this morning. Poor Larry was looking for some good news, to which Rick replied,
"there is no good or bad news Larry, just the news."

This one line made watching Kudlow's show worth it. Remember it, memorize it, as it will serve you well.

Speaking of news, which you know I believe is built into the tape, we got news that Caterpillar (ticker CAT) went to the credit market yesterday to borrow 1.3 billion which they paid 325 basis points over treasuries. That is 3.25% higher than U.S. government would pay.

We also got news yesterday that the FBI is investigating Fannie, Freddie, AIG, and Lehman. As Mr. Santelli says, no good news or bad news, but just the news.

I was away on vacation when Morgan Stanley reported their earnings last week, essentially pulling a Lehman move in which they reported better numbers as a result of booking as a gain the falling value of their outstanding debt as their business future nosedives. There sure is nothing like financial transparency with which to base your trading decisions on. Hey, lets take Mr. Isaac's advice and lets suspend all the rules mark to market, FASB 157, laws of gravity, heck everything, that will make it all go away and everything will be fine.


Blogger would not upload charts for me yesterday but the problem seems to be resolved so I will have some for you today.

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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Tuesday, September 23, 2008

Law and Order

I want to touch on the rule of law, order and further to that a basic sense of decency. I have been harping that the confidence in the markets is deteriorating, and a sense of "the game is rigged" spreading rapidly. As recently as last Tuesday in my post Some Things Just Don't Change, I said the following...

"I do believe we are witnessing the destruction of what was once the greatest capital market the world has ever seen. The confidence to transact business on a fair and unbiased basis is being destroyed by the I see nothing, I hear nothing Seargent Schultz-like attitude of the SEC. First we let Wall St. royally screw over scores of international funds by selling them toxic paper with bought and paid for fraudulent AAA ratings. Then when the stock gets punished, these same Wall St. firms lie that their capital positions are adequate yet go hat in hand to sovereign wealth funds pleading for money. And by golly they get it! Unbelievable. And then when the firm blows up and is sold for peanuts, golden parachutes are awarded to senior execs. Did I miss something? Oh yeah, I did, lobby local congressman and senators to go on pompom TV and wax how FASB 157 is onerous and in precarious times such as these should be suspended. Yeah that'll fix everything.

I want to bring to your attention to what has transpired in India in which a CEO was bludgeoned to death by his laid off employees. This is terrible news as it shows how quickly things can spiral out of control.

I bring this up because as anyone with an IQ over room temperature knows, people can accept bad things happen as it is part of life. Some deal with it better than others but on balance people accept it, deal with it and move on. What becomes problematic is when people have bad things happen to people as a result of other's actions and then those responsible, unjustly enriched beyond imagination ride off into the sunset, a truly golden one to be specific.

Recently market participants in Pakistan erupted and attacked the stock exchange there due the KSE's extensive plunge. Now this is what is happening just with a drop in the market. Now add in deceit, fraud, and misrepresentation and you have an extremely lethal mix.

I have taken many potshots at Chris Cox and the impotency at the SEC as he and his lieutenants have stood idly by while main street has been robbed and looted by Wall St, and many they have enabled, but this time I have a very serious recommendation for Mr. Cox, and for that matter all of the state attorneys' general and politicians. You had better get a handle on those who have raped and pillaged the system for their own profit at the expense of the masses. I am not advocating a witch hunt but I am advocating bringing the wrongly enriched to justice.

And no Mr. Cox, for the hundreth time, making a wagonload shorting a toxic mortgage laden, overleveraged, lying to the public on a weekly basis, bookcooking, begging for bailout financial stock is not wrongly being enriched. In fact, you should send a letter of thank you to those shorts for bringing the matter to the attention of the markets so those with half a brain could sell out before it hit zero wiping out retirement accounts.

Most have a sense of right and wrong and when a wrong is committed and is evident to even the dimmest among our midst, expect punishment to be meted out. The problem occurs when this wrong is not dealt with by the acknowledged legal authorities people can, and as history shows often do, take matters into their own hands. I in NO WAY, SHAPE OR FORM, advocate or recommend any type of vigilantism but history tells us matter of factly, it happens.

The public needs to feel that there is law and order, that "the game" is fair. That if you cheat, you will be punished harshly, not just a slap on the wrist and above all you WILL NOT BE ABLE TO KEEP YOUR ILL GOTTEN GAINS. The public see men like Mozillo of Countrywide, O'Neal of Merrill, Paulson of Goldman, yes that same Paulson who is now Treasury Secretary, exiting stage left with tens and hundreds of millions and the blood begins to boil. As I have said before, in the wild west of the turn of the century the only thing that kept a poker game honest was each players six-shooter on their hip.

The SEC is supposed to be that six-shooter in the eyes of the public. A fine of 1 million when the reward for impropriety was 25 million is a wonderful risk reward trade as any business school will teach it's students. I would surmise many Ivy League MBA students would do 10 years standing on their heads for a 25 million dollar payout.

Yes, I am worried, and this news from places like Pakistan and India only worsen it. Where are the saner heads, where are the adults? I have been asked today as to what would fix this. Well, here is my very simple suggestion for those thinking, "okay know-it-all, what would you do ? "

Open the books, detailed, no more hiding, FULL unemcumbered disclosure. No more off balance sheet Enronesque crap. No more level 2 or level 3 smoke and mirrors. Full confessional immediately. Mea Culpa. If these financial stock CEO's are so patriotic then show it. Doing this would be the patriotic thing to do. And yes Ms. Burnett of CNBC it might even be the patriotic thing for you to ask these type of questions to politicians and financial executives.

Minimum margin requirements on all of this paper whether written or bought, no exceptions. No margin, no position. 100 million market participants in the U.S. on the retail level adhere to this as of 4pm EST each and every day. No questions, no excuses. NO BID, NO VALUE Mr. Bernanke, no matter what your ivory tower 'held to maturity' formula may tell you. Mr. Margin Clerk sells you out, too bad, debate illiquidity on Jeopardy.

Rescind the short selling rule immediately. This way we can avoid the air pocket on the bid side which looks to be dead ahead.

I am no expert in global high finance but this seems to me to be a sensible place to start.


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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Back at Work.

I am back from vacation, having travelled all day yesterday. Lake City, Colorado is not the easiest place to get to but I must tell you, if you ever have the opportunity to visit make sure you take it. It is beautiful beyond words. The Alpine loop between Engineer Pass and Cinnamon Pass at 11,000 feet is extraordinary.

I was following events while out there and have a question for the financial media, You know, the ones like Charlie Gasparino who think us out in bloggo-shpere land who have been ranting and raving and warning about this for years, don't know our ass from out elbow. Ask Mr. Paulson why he hasn't resigned given the role of his former firm Goldman Sachs as architect in chief of this mess while he was CEO? Don't hold your breath waiting for this as Mr. Gasparino likes his career and face time on the pompom network.


Betcha Rick Santelli would ask Paulson the question.

Besides Mr. Paulson's hundreds, yes hundreds of millions are quite safe in treasuries. Are you shocked he didn't eat the same cooking his chefs at Goldman were peddling globally? Then you have no clue how Wall St. works.


I caught some comments from former Fed governor Poole is now all but ignored like an invalid as he warns taxpayer losses will be overwhelming with this bailout. More than interesting how if you don't tow the party line you don't know what you are talking about.


I was unlucky enough to catch current Fed governor Mishkin on CNBC this morning. Mishkin and men like him are exactly why we are in the predicament we are in and more importantly why it will be worse than many including myself can imagine. Mishkin is a perfect example of why the Fed should be shut down immediately. Like the physicians hippocratic oath of doing no harm, this is exactly what the Fed should be doing. Remember Fed Governor William McChesney Martin, he of "the Feds job is to take away the punch bowl just as the party gets going". We should be so lucky.

The problem here is just as the party got started not only did they not take the punch bowl away, Fed chairman Greenspan got out the crack while Paulson got out the crystal meth. Someone tell me we are living in a parallel universe and no of this is really happening.

I was thinking about Chris Cox this morning and have a suggestion for him. Besides getting his C.V. up to date, which I suggest he do ASAP, why not have a look at Mr. Icahn and this $70/share Imclone offer from a mysterious bidder.

Note to Bristol-Myers management, go tell Icahn where to go, rescind your bid and tell him you'll get him a nice wedding present when he gets hitched with his mystery bride.

This whole thing sounds like something Cox and his Keystone Cops could really wrap their arms around, and Chris, this would be real resume stuffer for you, a feather in your cap! Ooops, I forgot Chris, it's the unscrupulous short sellers who are the problem, not fraud, not deceit, not deliberate misinformation in CLEAR VIOLATION OF SEC LAW ! but rather short sellers. Keep repeating it over and over again so you don't forget it. I don't know is you saw yesterday Mr. Cox but the financials (XLF) were down 8% yesterday in the face of your ban on short selling financial stocks. One day does not tell the whole story but it can be ironic how things work out.


I will have some charts later today.


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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Friday, September 19, 2008

A Few Charts of Interest.

A little luck getting long the SDS but sometimes you need that when the house is crooked. And believe me Paulson, Bernanke, the SEC, congress, et al are as crooked as they come.

Ditto here with the luck on the Dow getting long the DXD. Please notice the lack of volume. You think some lights are going on in equity land regarding what is going on.

Now these guys do know what is going on. And they do not like what is happening. They may nix the bailout plan as they vote on it with their feet as they stampede for the exits.

What a blastoff. I patiently await a correction.

This chart of nat gas, ticker UNG, is looking better and better by the day.


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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89

Getting Short the Dow and S&P

I am getting long 2 units each of SDS and DXD on this pollyannic pop today. I am long 2 units SDS here at $61.70 and am long 2 units of DXD at $57.80. Suffice to say I have no faith in this rally.

My apologies for the shortness of the post and lack of charts as I am on vaction.

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

Open Positions:
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3,89

Quick Update

I am in lovely Lake City Colorado on vacation with family. I am staying abreast of market goings on. You just cannot make up what is transpiring in the capital markets, if they can still be called that. This ignorance and pollyanic hopes of our elected and appointed officials is staggering in its enormity.

I would like to go into a detailed rant on this but I am on vacation and there is plenty of excellent commentary on current delusional market interference by our government. Mish's site, along with Mike Panzner echo my sentiments pretty closely.

Please do not get fooled by this, it will only make things much worse. Remember my post The D-word? This type of intervention, I hate to say, practically assures it.


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

Open Positions:
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3,89

Thursday, September 18, 2008

Getting Long Hecla Mining - HL

I am getting long 2 units here of Hecla ticker Hl at $5.15 This move up thru the $5 level is my cue to do so .



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

Open Positions:
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3,89



Tuesday, September 16, 2008

Some Things Just Don't Change

So what does one say about a day like today. This market is whipping back and forth, rewarding and smashing both longs and shorts with equal abandon but really this is not the problem. The problem besides the government nationalising each and every business in the country was on display today as CNBC played ping pong with the AIG rumors mill. Resident rumormonger-in-chief Charlie Gasparino, came on pom pom TV to report that the Feds were back at the table for an AIG bailout. Then only a few minutes later, David Faber came in to report that a private deal was all but dead. To which, Steve Liesman added that he had called the Fed and Treasury and they reiterated Paulson's comments from the day before of no Fed bailout.

Where is Chris Cox over at Keystone Cop headquarters? Oh yeah, he's busy rustling up more short selling restrictions on the financials or better yet any stock that is dropping. He's really busy investigating various hedge funds and their bear raiding collusion via lunching and email patterns. Maybe he should stop harassing legitimate traders both long and short and start investigating lying dirt bags like Dick Fuld, John Thain, Mudd, et al. Oh no can't do that, to much career risk in doing that.

What also angers me in this is that traders are getting steamrolled by this type of misinformation campaign. This lack of policing is destroying our capital markets right before our very eyes. These speculators that everyone loves to hate provide the backbone of our capital markets, LIQUIDITY !!


I do believe we are witnessing the destruction of what was once the greatest capital market the world has ever seen. The confidence to transact business on a fair and unbiased basis is being destroyed by the I see nothing, I hear nothing Seargent Schultz-like attitude of the SEC. First we let Wall St. royally screw over scores of international funds by selling them toxic paper with bought and paid for fraudulent AAA ratings. Then when the stock gets punished, these same Wall St. firms lie that their capital positions are adequate yet go hat in hand to sovereign wealth funds pleading for money. And by golly they get it! Unbelievable. And then when the firm blows up and is sold for peanuts, golden parachutes are awarded to senior execs. Did I miss something? Oh yeah, I did, lobby local congressman and senators to go on pompom TV and wax how FASB 157 is onerous and in precarious times such as these should be suspended. Yeah that'll fix everything.

If I didn't know better I would think that these captains of finance, men like Paulson, Bernanke, Dodd and Frank, Fuld and Thain, were purposely and consciously trying to demolish the system.

I keep hearing systemic risk every time a corporation is in trouble. I almost hear it as much as the economy is resilient. Well if the economy is so damn resilient why are we bailing these guys out then? If the economy is resilient and the underlying fundamentals are strong then let these pieces of garbage fail !

I have news for you, NO ENTITY IS TOO BIG TO FAIL and for sake of argument let's pretend some are. Well, if so then the system we have isn't worth having anyway and should implode.

In the markets I DO NOT TRADE the Russian, Pakistani, Indian, et al stock exchanges for a reason, I simply do not have the confidence in them to do so! This may be shallow or ill informed but this is my position. I also don't play poker with guys who wear a baseball hat pulled down just above their sunglasses. No, check that, I will play but I get to wear my welder's mask as to even the playing field !

I have no confidence in many of these foreign market's bid/ask spreads, order execution capabilities, etc. I realise many out there do and more power to them. But I trade New York primarily and Toronto and London because I have confidence in them. Our markets are crumbling before our very eyes and I an not talking about the fact the numerical value is dropping. That is a fact of markets, they go up and they go down.


As if it wasn't enough to hear of Fannie and Freddie execs Mudd and Syron getting tens of millions in severance we now we get news that several Merrill execs led by uber-useless John Thain are in line for tens of millions of compensation for arranging a take under with Bank America.

I don't know much but what I do know is this is not the way forthright, transparent, unbridled, capital markets function, no matter what the talking zombies on TV may say to the contrary.

When is enough enough? Rick Santelli is right when you look to our flag you would now expect to see a hammer and sickle. Pathetic.

Housekeeping notes;

I was stopped out of my long DIG position today at $60.40 for a loss of almost $4pts on 1 unit only to watch it finish the day at $67.50.

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

Open Positions:
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

More Fireworks ?

I was stopped out of my TBT position late yesterday at $59.50 for a 2 1/4pt loss on 1 unit. The volume swelled into the TLT's which tells me the flight to safety and fear factor is running full bore. I will take my small loss and head to the shelter of the sideline.

I most likely will be stopped out of my long DIG position as everything is getting thrown overboard. Lots of small losses I can live with. Too bad the brokerages and banking institutions didn't think the same as we would all be better off for it.

Everyone keeps claiming the market is not trading on fundamentals, to which I would reply, this is a direct result of the opacity and lack of transparency in the markets. Nobody trusts nobody and it is a direct result of prior actions and behaviour. This entire situation is going to take a long time to repair, I say this as a warning to all those out there who think being a contrarian is to buy into this hole this morning.

Sitting on your hands would be a wise decision. Positions need to be put on during the calm BEFORE the storm, NOT DURING IT !

The market seems to be expecting 50 beeps as a rate cut from the FED. I would suggest you be prepared for 100 beeps.


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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $97.66
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Monday, September 15, 2008

Realisations

I realise we are in a bear market.
I also realise that in a bear market all stocks go down, it is just a matter of degree.
That being said I cannot help but notice how crude has made new lows and yet the XLE has not.

This is the type of divergence, or tell that we watch for. Therefore based on this I am now long 1 unit of the Ultra Oil and Gas ticker DIG at $64.10 with a stop at $61.79

Are you watching all the so called capitalists, well at least those that remain (which you can probably count on one hand), now squirming exposed as the closet socialists they truly are, as the FED has told AIG to go pound salt and look elsewhere for money. Oh so funny what a losing position does to the capitalist in so many on Wall St., almost makes it disappear quicker than the lobster at the all-you-can-eat buffet !


I have no idea where this backbone in the FED has come from regarding it's rebuff of AIG. Maybe someone punched Paulson in the mouth and showed him what will happen if he continues down the bailout road. Or maybe he as a trick up his sleeve and this is a campaign of misinformation as he truly intends to bail them out and smash the shorts. (Fed meeting this week remember). This seems to have become a turn of the century wild west game of Texas no limit hold em' where the only law was the six-shooter on your hip. It is a shame it has come to this but you reap what you sow and this is the result.

Yeah, yeah, yeah I've heard it before AIG is different, as it effects main street. And yes I know they have a trillion, with a T, balance sheet. They're all different. Bear Stearns, Lehman, Wachovia, Wamu, GM, Chrysler, Boeing, Fannie, Freddie. Yup, they're all different, too special to fail, too important. I'll tell you what is consistent though... the HYPOCRISY !!

I do believe that we have reached a point of recognition in the market. The juncture where we move from denial to acceptance. Where the factual data is to the point where even one with a room temperature IQ (like myself) can figure it out.

All this with a Fed meeting tomorrow and here come the calls for a rate cut. And not just any rate cut, not 25 beeps but rather 50 or a 100. Yeah, that's it, give the crack head more, heck, just give him the whole stash and let him OD right there on the spot.

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

Open Positions:
Long 1 unit Ultra Oil and Gas ticker DIG @ $64.20 stop at $61.79
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $97.66
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Getting Long Energy via DIG

I am getting long the ultra oil and gas ticker DIG at $64.10

I wanted to get this post out as quick as possible.



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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $97.66
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Ready to Get Shorter the Long Bond

I am going to add to my short position on the long bond on a move by the TLT's below $96. This would seem to correspond via the TBT to a move thru $62. This would be my trigger to add a 2nd unit long of TBT.

Don't get fooled by a suckers rally today. The consumer is not well no matter what they tell you on CNBC and if you don't believe me, just take a look around yourself. I trust you will see it for yourself. I am adjusting my stop on my existing TBT position to $97.66

Housekeeping notes;

I was stopped out of my FDX position at $91.05 for a loss of over 4pts on 1 unit short.


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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $97.66
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Monday Morning Thoughts



Been trying to formulate a game plan for the day. First off, be very cautious with your trades as you can get steamrolled very quickly. Preservation of capital is paramount. Remember that he who loses the least can often be the winner !

Regarding the long bond, or TLT's. We look to be ready to spike up on this news as the Fed is viewed to gain some credibility today on the moral hazard front. I would like to add to my short position here int the TBT and will be watching this close. As long as the TLT does not take out it's recent highs this looks to be the correct trade.

Crude is getting smashed this morning and while many out there believe it is a bubble burst, I am still of the inclination that it is margin liquidation. Entities out there across the board are under pressure to de-leverage. No matter how reasonable or logical the speculative venture, capital is being destroyed at a dizzying pace.

I want to bring your attention to the chart of the XLE (1st chart top of page). The low trade on the XLE is $63.25. Late last week we rallied from here to about $69 to kiss the broken trend line from underneath. Basically if you believe this was a bubble burst, this kiss of the trend line was your chance to get short or shorter.

If you believe, as I do that this was a correction in an ongoing bull market, then the retracement or "the box" on the move from $63.25 - $69.00 is at $65.60 -66.20 rough numbers. I am inclined to buy DIG the Ultra oil and gas proshares as a play on this given the weakness expected at the open, with a tight stop. Tough trade to get long anything right now though that is exactly what I want to do here with energy.

One could also play this via some of my favourites like SU, XTO, CHK, APA etc. which are exhibiting similar characteristics to the XLE.

The IYR (2nd chart from top) as my notes indicate looks to have rolled over right where one may have expected it to.


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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $98.41
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Sunday, September 14, 2008

Late Night Sunday Fireworks

There is quite a bit going on this Sunday evening.

I got to watch my beloved Detroit Lions tease me yet again, only to break my heart in the end. But tonight we have more important things going on, things like the Fed expanding the window to accept equities. Things like Lehman going belly up. Things like AIG turning down private equity infusions only to turn to the Fed for help. And then for me the coup de grace, Merrill being acquired by Bank America for, get this, a 70% premium to Fridays close. The deal is to be done in stock. Ya smell a Fed arranged shotgun marriage?

I have a suggestion for Merrill Lynch stockholders who will be getting BAC stock, PROTECT YOURSELF !! This is a gift of unbelievable magnitude. You should thank your lucky stars and get out ! As a Bank of America shareholder, to say I would be outraged would be an enormous understatement. My guess is that the majority of those shareholders will too busy watching American Idol, America's Got Talent or the yet to be released but coming soon American Taxpayers getting the Shaft, courtesy of unelected officials like Bernanke and Paulson. Yet Bill Siedman claims we are lucky having Bernanke and Paulson at the helm? Are you kidding me? Thats a joke, right? Bernanke and Paulson have have been exceeding successful in taking a major problem and most assuredly turning it into a GARGANTUAN one. This government inference only prolongs the healing.


The Merrill/Bank America deal is the one I smell a rat with. This is the same Ken Lewis of Bank America that orchestrated the Countrywide purchase and we all know how that went. I would suggest his abilities as an appraiser of corporate assets is somewhat suspect.


But what would I know or better yet what would Nouriel Roubini know. Besides being all over this from day 1, the financial media continue to treat the man like a leaper. Begrudgingly inviting him on their show when the sky looks to be falling and even then only to focus on the bullish prognosticators he is paired up with. Mr. Roubini states that he expects over 150 banks to fail and in the face of this they have nothing to offer in response, no questions, no comments, no nothing. Quality financial journalism at its finest !

I have been watching the cheerleading network and their coverage of tonight's events and I must say this about Vince Farrell. You poor, poor soul. This is a man who seems to have never met a market, stock or global event that wasn't a buying opportunity everywhere and always. I truly feel sorry for this clients over at Scotsman, oh excuse me Soleil Securities, leaning on his advice, if you can call it that. I am not trying to pick on Mr. Farrell but enough already. The fact that CNBC will continue to haul him out in front of the camera is beyond bizarre and quite frankly is shameful.

We have a market situation that has not cropped up over night, rather, this has been going on for months and months and yet here is a man who will continue to pound the table on stocks. Shameless, either that or absolutely insane. He continues to maintain it is contained to the markets and will not affect the economy. Absolutely stunning.


Are you shocked these market executives think the Merrill/Bank America deal is good for the market? Kinda like asking a realtor if its a good time to buy a house. Or a car salesman if its a good to buy a car. Is this lost on people or what?

But hey the economy is resilient, the fundamentals of the economy are strong. Enough with the BULLSHIT. I am sick of it.

YOU ARE NOT WRONG TO YELL FIRE IN A CROWDED MOVIE THEATRE....IF THERE IS A FIRE !!!!!

You are also not wrong, not a criminal, nor unpatriotic to sell short a piece of garbage, over leveraged, book cooking, financial stock. No matter what any of these unpatriotic, lying, obfuscating, politicians, brokerage execs, and financial anchors say to the contrary.

What I do know is the underlying problem of this market, HOUSING, has not changed one iota. It has not impoved and until it does all the rest is window dressing. Wait till the commerical real estate dominoes start falling. It will not be pretty.

I see the head of the Keystone Cops Christopher Cox says the SEC with be doing all it can to ensure smooth functioning markets. I wonder if he has a copy of the Pakistani stock market regulators playbooks. He may need one.


I remember my grandfather asking me why people lept to their death from building in the aftermath of the stock market crash of 29', to which I replied "because they lost all their money." To which his answer was,"no, they jumped not because they lost what they had, but they jumped because they lost what they didn't have".


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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $98.41
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Friday, September 12, 2008

Market Internals....or lack thereof.

Yesterday was quite the day, down 170 to start the day, only to finish the day up almost the same. Forget about the 'why' and leave that to the idiot market guessing inhabitants of the pom pom network.

The facts are that we had a 100 pt rally in the last 15 minutes yesterday. Here are the internals yesterday on a 165 pt up day on New York and almost 30 pt up day on the Naz.

NYSE advancers 1328
NYSE decliners 1698
NYSE new highs 37
NYSE new lows 110

Nasdaq advancers 1310
Nasdaq decliners 1567
Nasdaq new highs 68
Nasdaq new lows 140

So you tell me, is the patient is healthy or sick? Old timers would call this tape painting, but it sure makes for good reading on the nightly news. And we need that so we move on to more important issues like Lindsay Lohan's relationships. America's Got Talent and rest of the fall lineup on brain dead TV.

I have been warning you about the panic and the chaos that would be occurring on CNBC as the market slowly but surely deteriorates. I am not trying to put them down for it is not their fault but I am reminded of the phrase, "the only thing worse than someone who knows nothing is someone who thinks they know something". It is getting almost comical as the legions of denial(ists) slowly realise what is happening.

Notice how even some of the polyannic pretty faced anchors are getting spells of nerve to challenge a pundits guess that the financial sector is cheap. In the least it makes for very funny TV

The pom pom network continues to cart out all these purported experts, or as Bill Fleckenstein likes to call them "dead fish" who continue to claim to know something. The events of the last 12-18 months should be unambiguous evidence to the contrary. You notice the downgrades of stocks like Lehman and Washington Mutual now? Kinda like telling someone in the path of a disaster that he/she should get insurance. Absolutely nothing like an Ivy League education to truly prepare you for the challenges of the global marketplace. Stunning, truly stunning.


I want to touch on Salesforce.com ticker CRM. It will be in the S&P as of the close today. We could experience some more index fund buying but I will be looking to add to my short towards the end of the day as the boyz who have put off buying to the last minute are forced to do so. The stock has levitated under this backdrop and I expect that to end shortly.

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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $98.41
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Wednesday, September 10, 2008

Chart on the TLT

As promised, here is the chart on the TLT's with some notes. I would like to go on record that I do recognize today's bar which could be a bullish portending inside day. That being said, I will not stick around long enough to get my head handed to me like others tend to do, nor will I pull a hedge fund special and average into this should it go against me. This looks to me like a nice broadening top which I know many technicians are shy to trade. I may be fooling myself but this strikes me as a hard trade which you all know I like.

A reader emailed me regarding blabbering Bob Pisani and his incessant pumping of Fedex today and their fuel cost savings. I counseled the reader to think about this the other way, his pumping is giving many out there ample opportunity to get short this ultra economically sensitive stock. I would humbly remind Mr. Pisani that it always helps to have orders and business so you can use the fuel you are gonna be saving oodles on. But why let a fact like that get in the way of a good pump, which by the way, he has done now no less than 5 times so far and its just past noon.

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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $98.41
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Getting Short the Long Bond

I am prepared to test the water this morning getting short the long end of the US bond market. I will use the Ultrashort Lehman 20yr treasury ticker TBT. For those inclined you can short the ishares Lehman 20yr treasury ticker TLT straight up.

I am long 1 unit of TBT here at $61.60 with a stop at TLT $98.41

I am having tech trouble getting a chart posted on this but I will do so as soon as I can.


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

Open Positions:
Long 1 unit Ultrashort Lehman 20yr treasury ticker TBT @ $61.70 stop at TLT $98.41
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Getting Shorter Salesforce.com - CRM

I have added a 2nd unit short to Salesforce ticker CRM at $55.15 which now leaves me with 2 units short.

I was also stopped out of 3 units short of FDX at $88.20 for a loss of just over 1 pt on 3 units.

I realise this is nuts, but I am getting short this name, again, right here, right now at $87.35 with a stop at $91.02.


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

Open Positions:
Short 1 unit Fedex ticker FDX @ $87.25 stop $91.02
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62

Salesforce, Fedex and Mr. Magoo

Many times in the market traders get caught up in what they want to happen versus what is happening. This can lead to disastrous consequences as you can see with various hedge fund and Wall St. broker dealers.

Almost like a young child at Christmas time I have a want list. Right now I want.....

to be long USO.
to be long UNG.
to be long KOL
to be long UGA
to be long OIH, DIG, FCX, RIO, PBR MRO, et al
I am long physical gold and silver but I want to get longer

The problem is I can't. Why? For the most sane reason of all, we are in a bear market and in a bear market ALL stocks fall and these are no exception. Now some stocks will fall less than others, but across the board the vast majority will fall. In a violent storm even the sturdiest of vessels take on water and sink.

Like the village idiot, I have attempted to be long some of these names at various times over the last few months. Excitedly watching them pop initially to profitability only to get pounded back down. As famed trader Jesse Livermore's friend Partridge admonished anyone who would listen
"You know it's a bear market".

I caught the replay of the money honey's interview with Mr. Magoo errr excuse me, I meant to say former Fed chairman Greenspan. Easy mistake to make as they could be one in the same in their stewardship of the Fed. I laugh at how Greenspan can see now how Fannie and Freddie were an accident waiting to happen. Crystal clear now isn't it Mr. Magoo, but when you were head of the Fed you couldn't see anything until hindsight. Just like endorsing adjustable rate mortgages to the masses at generational lows in interest rates. Pure Mr. Magoo for a reason. This campaign of image repair could be the pinnacle of hypocrisy, absolutely staggering.

CNBC has basically become the bull horn for these idiot, pretend capitalists. All of them. Bernanke, Paulson, McCauley, Gross, Mack, Thain. Nothing more. CNBC, the new fountain of misinformation. Joseph Goebbel would be oh so proud of this network.

I find it almost comical that the treasury and Paulson had the nerve to send in Morgan Stanley to Fannie and Freddie to check out their books. It didn't take them long to figure out how extensive and pervasive the book cooking went at Fannie and Freddie. You gotta hand it to Morgan as only a crook would know where a crook would hide the loot. How fitting !

I have an idea, if it is now okay for the fox to be in the hen house, why not let Merrill Lynch examine Morgan's books, let's let Lehman, before they close up shop for good, to examine JP Morgan's books and so on. Ya think we might get some transparency? In the least it would be entertaining to watch the cannibals turn on one another.

2 charts for us to keep watch on today being Salesforce.com and Fedex.



News from last night is the Salesforce.com ticker CRM(chart above) will replace Fannie Mae in the S&P500. We will get a pop from the indices re-balancing. I intend to get shorter this name on this rally. I will be keeping my eye on the $55-56 level as an area to add to my position



Fedex (chart above) announced better results due to a drop in fuel costs. The stock should get a nice pop today, which is nothing more than a relief rally.


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

Open Positions:
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 3 units FedEx ticker FDX @ $87.10 stop at $88.16
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 1 unit Salesforce.com ticker CRM @ $57.05 stop at $60.62

Tuesday, September 9, 2008

The 'D' Word ?


I thought it would be extremely helpful, with everything going on, to take a giant step back and look at the truly BIG picture. The chart above is a 20year monthly view of the S&P500. I have posted this chart previously, and for good reason, as it speaks volumes as to where we are. As my notes indicate, Does this chart look like a buy or a sell to you? Remember this is a monthly view, which like an ocean going freighter, takes a long time to turn around. This chart is not my bias but rather an observable fact.

That being said, and I remind you BASED ON THE FACTS, that I am a deflationist. I believe the credit destruction we are witnessing is so extraordinary, so overwhelming, so monumental, that it is swamping any and all efforts by the monetary authorities to counter it. Combine this with a massive de-leveraging due to an over leveraged global financial community and you have a very dangerous mix. Regular readers may then ask, so why then have you, dear speculator/blogger been at various points over the last year, long commodities and short bonds? Should not commodities suffer in a deflationary environment and should not bonds prosper immensely. To this, I say good question as it is one I would ask as I agree.

I will address the bond issue first. The thing I am struggling with is I see the debt being taken on by the Fed and Treasury, Fannie and Freddie just doubled the totals overnight. I understand the flight to quality, more specifically at the short end of the curve. I understand the argument for higher rates made by many, but the time for that has passed, it would now absolutely crush the housing market even further, which I realise the polyannas on CNBC find ludicrous.

Mike Panzner over at Financial Armageddon and author of the fantastic book by the same name, which you have to read if you want to understand what is transpiring. Remember now, he wrote the book over 2 yrs ago! Too bad Bernanke, Paulson and Co. had not read it as well.

A few days ago, Sept 3 to be precise. In his post "Even Low Risk Can Be High Risk in Dangerous Times", which is a great read and should get you thinking, Mike had a great chart of the long bond covering the late 20's thru the early 30's. The picture it shows in not pretty, as bonds were absolutely crushed in the deflationary environment of the day. Like today, many then flocked to treasuries as a safe haven. I am NOT saying treasuries are risky, but I will safe they are riskier than at any other time in the history of the United States period. If our foreign creditors vote with their feet and walk, bonds, specifically the long end is in HUGE trouble. Hence my on again off again interest in being short the long bond via the TBT.

Now the gold issue. Yes I own physical gold and silver fortunately for me at much lower levels. So why own gold in a deflationary environment? Sometimes I think of the admonition of grizzled markets veterans of he who loses the least is the winner. I do believe that of all the assets one can own going forward, gold and the other precious metals should hold up better than most or if you prefer, lose the least.

I do believe in peak oil and all of its attendant difficulties for the global economy. But I am also a tape reader and let the tape tell me what to do, no matter how strong my fundamental belief in a concept. That said the following group of commodity charts paint a very difficult picture and while I am not long currently, I have opined that the various commodity charts were in correction mode and NOT a bear market.

The question I pose aloud, is are the commodity charts speaking the dreaded DEPRESSION word? I do not like using this word as many out there use it as hyperbole or for grandstanding purposes. I cannot ignore the depths to which various commodities have fallen and this tells me that maybe something much larger and more ominous is developing and that no matter how bullish I might be on say, the oil theme, the global deflationary, depressionary forces are overwhelming it.

I want to thank Mike for his post as it got the little mouse who resides up in my brain, off his ass and into the wheel for a run, firing up the few brain cells I still have. Your comments, thoughts, or criticisms are always appreciated.














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

Open Positions:
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 3 units FedEx ticker FDX @ $87.10 stop at $88.16
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 1 unit Salesforce.com ticker CRM @ $57.05 stop at $60.62