Wednesday, March 4, 2009

Fighting the Flu

My apologies for not posting yesterday as I was under the weather fighting the flu.

I happened to catch CNBC's morning show Squawk Box yesterday morning. They had on Ace Greenberg, the founder of AIG, along with Eric Hovde a fund manager whom I don't know but seems knowledgeable. The conversation took an interesting turn when the subject of making whole AIG counter parties was brought up. Mr. Greenberg and Mr. Hovde both brought up the fact that Goldman was at the table for the meeting with AIG, the FED, treasury.

Regular readers know I have brought this issue up before and know how hot under the collar I get about it. I realize men like Art Cashin want us to move on and heal but I can assure you that until issues like this AIG/Goldman one are resolved we are going nowhere. At least now this issue is getting some "air time" so lets see where it goes. Maybe just maybe King Henry (Hank Paulson) will be held accountable for his chicanery.

The Markets.

Monday was a 300 pt down day. Yesterday they tried to rally the market, marking it up almost a hundred points only to finish the day down about 40. I realize all the pundits are calling for a rally as we are severely oversold but one must remember that the market can remain overbought or oversold much longer than you or I can remain solvent. The chatter of the Steve Grasso "rip your face off" rally is getting larger but one must realize that after a 300 pt down day and all we can manage to do is an intraday rally only to finish down 40, well I humbly suggest you govern yourself accordingly.

I would also counsel that readers pay close heed to the volume in the markets, in particular the fact that the volume is normal to light. Good you say? I would disagree as this is not how a bottom will be made. This lack of volume makes me worry that instead of a ripping rally that something that this is the quiet before the storm and that something VERY BAD to the downside is brewing.

Did you catch the Hartford Financial (ticker HIG) news? If not take a minute to do so as they look to be headed down the road to insolvency.

Housekeeping notes;

I am once again bumping some stops up as follows.

I am raising my stop on 1 unit of EFU to $136.34 while keeping the 2nd unit stop at $123.28

I am raising my stop on 1 unit of SDS to $100.22 while keeping the 2nd unit stop at $93.42

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 Ultrashort MSCI EAFE ticker EFU @ $89.80 stop at $123.28/136.34
Long 2 units Ultrashort S&P500 ticker SDS @ $69.80 stop @ $93.42/100.22
Long 2 units Ultrashort Real Estate ticker SRS @ $53.80 stop @ $64.72/75.42
Short 1 unit Apple ticker AAPL @ $102.05 stop at $100.11
Short 1 unit Apollo Group ticker APOL @ $82.95 stop @ $82.95
Short 1 unit Microsoft ticker MSFT @ $19.20 stop @ $19.20
Long 1 unit Int'al Coal ticker ICO @ $1.51 stop @ $1.47

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