June 18, 2009

The Treasury announced Thursday a record $104 billion worth of bond auctions for next week, part of its herculean efforts to finance a rescue of the world's largest economy.

The sales will exceed the previous record of $101 billion set in auctions that took place in the last week of April and consist of two-year, five-year and seven-year securities. That record was matched by another $101 billion week in May.

Though next week's total was broadly in line with expectations, worries about supply have weighed on the U.S. government bond market, which will see a mammoth $2 trillion worth of new debt issued this year.

Stop the madness!!!!

Oh...it's too late, we can't.

U.S. Stock markets rallied today pushing toward the 927 - 935 level in the S & P 500 relieving the oversold condition brought on by the first wave of selling since posting a top at 956.

Option expiration day is tomorrow. If not already short, any rally above 923 should be shorted aggressively, add to positions at 930 with a stop at 938. A push to the 935 level could be reached but the reward side of this short position is great at this time.

Gold has broken down as well. Although gold is very attractive long term, the deflationary influence in this market will take down gold along with the commodities which have already started to decline. Gold could move below $700 per ounce at which time we will be aggressive buyers.

6/17/2009

The market has sold off as expected. Currently in a bounce but should soon resume lower piercing the spx 900 level. Options expiration week can bring hard to read surprises.

Quote of the day, courtesy of Karl ‘No Slave To Fashion’ Denninger:

Government, despite their so-called “new proposal” has refused to take the steps that are necessary to resolve this crisis and return us to a stable economic base.
The reason for this is simple: Government is both beholden to and stuffed to the gills with those who made the bad decisions, and forcing those people to eat their bad investments is considered politically unacceptable.
We therefore will do this “the hard way”, just like we did in the 1930s.
Buckle up - this road might get “a little rough.”

Unfortunately, the ones who made the decisions which are at the root of our financial problems are still in charge. While the markets ran off the Lehmans and Bear Stearns they were merely players in the game not the rule makers. Losses will correct bad behavior, unfortunately we don't have such remedies in government.

6/10/2009

What is wrong with this picture.....??

"Federal Reserve lost $5.25 billion in the first quarter on the securities it acquired with last year's bailouts of Bear Stearns and insurer American International Group, according to a report issued Wednesday.
Mary Altaffer / AP
Federal Reserve Bank Chairman Ben Bernanke
The loss on the holdings, which include mortgage-backed securities, reflected a decline in their value as the recession carried over into the first three months of this year. The cumulative loss on the Bear and AIG holdings come to $16.46 billion since they were taken over last year."

Did JP Morgan Chase lose money on their Bear Stearns investment??? I don't think so. WTF!!!!

If you haven't sold all your stock holdings yet, the market is going to give you one more chance Thursday, Friday or perhaps next week.

Sell all holdings and for those who are agressive, go short!

June 1, 2009

"Sell in May and walk away." That is how the old saying goes. The common consensus this year is different. The bulls are coming alive! The bears are going into hibernation with their heads down.
While timing the market is always difficult, when we look back this fall, next spring or so...the sell in May and walk away signal will be genius. (We could even get a chance to sell the summer rally at perhaps higher prices, but why risk it?).
As an American, I wish this was a new bull market and will be on it's way to new highs, a once in a lifetime chance to buy at incredible prices. (we actually had a nice one in March, just need to sell those purchases now!!!). As a capitalist and a realist, I firmly believe that this may be a "once in a lifetime" chance to sell all stocks to at least re-coop some of the losses that most sustained in 2008.
There will be another chance to BUY, but for now, capital preservation is far more important!
The S & P target has been met. While there is still a chance to go to the 1,000 - 1,120 range, the downside risk is far, far greater.

5/26/2009

Bulls were in charge today. While our entry in March was timely the mistakes in markets are that they can get way oversold and way overbought.
While this market is way overbought you can still have up days like today.
We remain short term negative on this market. The more it rises the faster it will fall.

April 17, 2009

Loaded up today with SPY puts and FAZ.
Market should sell off soon and correct this overbought condition before turning up again.

March 28, 2009

The market has made the "biggest 10 day advance in 70 years." What does that me for us? RING THE REGISTER! SELL! This first wave of a countertrend rally has been tremendous but markets don't go straight up or straight down. The perfect scenario would be to continue up into Tuesday while the fundies complete their windowdressing and then hard down to the 740 - 770 level on the S & P 500. This might only take one or two days. At that point we're back in 100% long. The market could try and not give us a chance to get back in but the present overbought condition warrants a trade out for another reload below SP 770.