Five straight days up. We haven’t done that since July 2007 and the best 5 day rally since 1933. The thing I noticed today is….if you want your stock to go up, you need your company to be going bankrupt and have the government bail them out. Days like today are just embarrassing!! Just look at the winners of the day….Citigroup up 18%, GM up 10.81%, Ford up 27.44%. Now look at these losers….Wal-Mart down 1.31%, Apple down 2.64%, Research in Motion down 4.74%. I guess if you make really good products that people want to buy and you actually make a profit your stock is a sell. This tells me that people are still covering shorts. I really wanted to buy more SDS but I’m going to sit on my hands and see what happens over the weekend and Monday.
I’ve been trying to figure out how I missed the last couple of days of this rally and I didn’t put into account the level of excitement about buying automakers and suppliers stocks before the government bailout money. Looks to me like a buy the rumor and sell the news situation. I’m waiting to short auto suppliers once the bankrupt 3 get some money. When this market turns it will be brutal.
The only silver lining right now is gas with a 1 handle and mortgage rates with a 5 handle. That is an awfully weak ray of hope. People are not going to buy a house just because mortgages are in the 5% range. First of all, only the smart buyers will know that and if you’re a smart buyer, you will also know that if you buy today your house may go down 5% or more in value in a year or two. As far as gas having a 1 handle, we all know it will not stay here forever. Most people are worried about their jobs not fuel prices and small mortgage rate movements. This all seems pretty weak to me.
Friday, November 28, 2008
Nov 28
Today is a half day and the volume should be very low. I’m trying to get as much information as I can about Black Friday. What I’m seeing so far looks dreadful but it will be interesting to get the data over the weekend. I can’t see how it will be good. I am getting the feeling that the market hasn’t priced in the terrible durable goods numbers. They were over twice as bad as the economist predicted. Panasonic, the biggest maker of consumer electronics, came out with a story yesterday to confirm the bad durable goods numbers. They reduced their annual net income by a whopping 90%, saying demand and prices have fallen as the U.S. financial crisis spread across the globe. Also yesterday I read that the British retailers Woolworth’s and MFI, biggest furniture store in England, have filed for bankruptcy and ArcelorMittal, biggest steel company in the world, is cutting 9000 jobs. If the biggest consumer electronics maker and biggest steelmaker are having trouble, what is happening to the weaker hands? Also the Japan’s recession deepens as factory output slumps. Does anyone need more data to prove the durable goods data? The market hasn’t priced this in at all.
Wednesday, November 26, 2008
Nov 26 Post
Well…I was right in the morning and dead wrong in the afternoon. I didn’t think we had any chance of rallying four straight days. The last time we rallied four days in a row it was April. I got that wrong. I also didn’t think this rally would be this big. The last time we rallied this hard it was 1932. I got that wrong as well. All in all it was a very low volume day and I don’t read much into this move
Nov 26 Part 2
We just got durable goods and it just proves everything I was just saying in my first email today. Durable goods are flat screen TVs, washers, dryers, sound systems, computers, cars and all the stuff people buy with Bank of America unsecured credit. The economics estimates were down 2.5% but it was down 6.2%!! They weren’t even close. Is it any wonder HP, Cisco, Intel and all car makers are shutting down production? This has to spread to more pain and more job loses. Jobless means people can’t payback all the Bank of America credit drug off and Plus the products that are in stores right now are getting devalued everyday. Margins will be killed on lower volume. How many of you want to buy a company doing that? They aren’t hard to find.
Nov 26
I was thinking about what happened yesterday with the massive 36 point rally on the Dow after the government announced an $800 billion program and it appears that the market is getting tired of government programs. I know I don’t trust them and I’m getting the feeling that all these programs are just fixing a credit problem with more credit. It’s kind of like the David Ramsey caller I talked about last night and instead of David telling him to get a $2,000 car, sell the house and get a second job throwing boxes at UPS, he tells him about a bank that will let him borrow even more money. It’s crazy. Our economy is way over leveraged and I get the feeling we are just moving the pain down the road.
I think having a slowdown for consumer credit is a good thing in the long run but it is bad for businesses. Companies make money borrowing and individuals lose money borrowing. I got something yesterday from Bank of America letting me know that I had a line of unsecured credit for as much as $50,000 at 8.99%-22.99%. It showed some examples of the very low monthly payments based on 8.99%. These are the type of things that pushed our economy up buying flat screen TVs, furniture, home improvements, cars and so on. It wasn’t real. Now the credit drug dealer has run out of the drug but the government is moving in to bring more supply. Does this sound crazy to anyone else? It will be tough to prop up a fake economy. I don’t even know what I would do with that $50,000 even at 8.99%. Give it to me at 0% interest for a year and I’ll buy a 4% interest CD. Otherwise, they can give that slavery to someone else.
The market should start going down today. We do have a lot of date coming out….Michigan Sentiment, New Home Sales, Chicago PMI, Personal income, Personal spending, Durable orders and most important Initial jobless claims. I can’t imagine any of this data is good. It’s time to be short again.
Happy Thanksgiving!!
I think having a slowdown for consumer credit is a good thing in the long run but it is bad for businesses. Companies make money borrowing and individuals lose money borrowing. I got something yesterday from Bank of America letting me know that I had a line of unsecured credit for as much as $50,000 at 8.99%-22.99%. It showed some examples of the very low monthly payments based on 8.99%. These are the type of things that pushed our economy up buying flat screen TVs, furniture, home improvements, cars and so on. It wasn’t real. Now the credit drug dealer has run out of the drug but the government is moving in to bring more supply. Does this sound crazy to anyone else? It will be tough to prop up a fake economy. I don’t even know what I would do with that $50,000 even at 8.99%. Give it to me at 0% interest for a year and I’ll buy a 4% interest CD. Otherwise, they can give that slavery to someone else.
The market should start going down today. We do have a lot of date coming out….Michigan Sentiment, New Home Sales, Chicago PMI, Personal income, Personal spending, Durable orders and most important Initial jobless claims. I can’t imagine any of this data is good. It’s time to be short again.
Happy Thanksgiving!!
Tuesday, November 25, 2008
Nov 25 Post
It was a real tug of war today in the market. We had the financials on one side and everyone else on the other. With the new bailout plan (second bailout in two days) the Federal Reserve is pumping $600 billion into a program to buy mortgage-related debt and should lower interest rates somewhat and thus spur lending and support the troubled housing market. This gave financials a boost. You may be asking where did this $600 billion come from and that is a very good question. The answer is simple….they are going to print it out of thin air. You don’t have to be economist to know that his will bring on inflation without growth…better know as stagflation.
Now let’s look at why we are here and how this bailout will fix the economy. We are here because people borrowed too much and can’t pay it back. The government’s answer to this is to make it even easier to borrow money. 50% of the reworks on mortgages are still going to foreclosure. There is a reason why David Ramsey has a show. I listen to his show every once in awhile just to laugh at how stupid people can be. Let me give you a typical caller…..caller makes $50,000 a year and thought it would be a good idea to run up his credit cards $50,000 at 20% interest, have a $200,000 house with an interest only loan and two brand new cars worth $25,000 each at 18% interest. Then he wants Ramsey to come up with a magic trick to fix this. Now the government’s answer is to print money so this caller can borrow more money. Only this time it will be for a motorcycle or a boat. This is straight out of SNL.
If anyone thinks this economy is turning around or we are near a bottom, just read the list of terrible data from this week.
Three banks were taken over this weekend. The most in one day ever.
FDIC number of problem banks has surged from 117 to 171
Bank industry income plummeted 94% (yes that is right….94%)
Import car makers are paying extra to park cars at Long Beach port
Porsche is slowing production
Nissan is slowing production
BHP Billiton and Rio Tinto merger isn’t going to happen
· Cisco is shutting down from Dec 29-Jan 2 because of weaker than expected demand
· HP is shutting down extra days in Dec because of weaker than expected demand
Does this sound like growth to anyone? I don’t think we are even close to the bottom. With guys like the Ramsey’s caller and our government feeding him the credit drug, we are going to see more pain in the market. There will be more foreclosures, repos, bankruptcies and bank failures. Unfortunately, these are the only things with growth in this economy.
Now let’s look at why we are here and how this bailout will fix the economy. We are here because people borrowed too much and can’t pay it back. The government’s answer to this is to make it even easier to borrow money. 50% of the reworks on mortgages are still going to foreclosure. There is a reason why David Ramsey has a show. I listen to his show every once in awhile just to laugh at how stupid people can be. Let me give you a typical caller…..caller makes $50,000 a year and thought it would be a good idea to run up his credit cards $50,000 at 20% interest, have a $200,000 house with an interest only loan and two brand new cars worth $25,000 each at 18% interest. Then he wants Ramsey to come up with a magic trick to fix this. Now the government’s answer is to print money so this caller can borrow more money. Only this time it will be for a motorcycle or a boat. This is straight out of SNL.
If anyone thinks this economy is turning around or we are near a bottom, just read the list of terrible data from this week.
Three banks were taken over this weekend. The most in one day ever.
FDIC number of problem banks has surged from 117 to 171
Bank industry income plummeted 94% (yes that is right….94%)
Import car makers are paying extra to park cars at Long Beach port
Porsche is slowing production
Nissan is slowing production
BHP Billiton and Rio Tinto merger isn’t going to happen
· Cisco is shutting down from Dec 29-Jan 2 because of weaker than expected demand
· HP is shutting down extra days in Dec because of weaker than expected demand
Does this sound like growth to anyone? I don’t think we are even close to the bottom. With guys like the Ramsey’s caller and our government feeding him the credit drug, we are going to see more pain in the market. There will be more foreclosures, repos, bankruptcies and bank failures. Unfortunately, these are the only things with growth in this economy.
Nov 25 Part 2
Once again the government announces a new program and the market jumps. This is getting ridiculous. How long before this program changes? It’s a joke that we have so many government programs. I don’t even know how many there are anymore and how they have changed over the past 3 months. These government programs may help us from going into a depression but it will not create growth. This is a gift of all gifts. You must sell some SSO into this strength.
Nov 25
I’m giving SSO a chance to work a little harder for me but I will sell it very quickly. We may get a couple more shorts covering and train jumpers but there can’t be many. Plus everyone wants to short this rally. I’m licking my lips at American Axle’s rally of 38% yesterday to the level I shorted a couple weeks ago. Any headwinds will knock AXL down 25% in a heartbeat. We are going to retest the new low 745 on the S&P 500 and ultimately break it. So start scaling into SDS. Any rally today is a gift. So take it!!
Monday, November 24, 2008
Nov 24 Post
Biggest two day rally since 1987 and we got all of it!!. I loved watching the shorts run for the doors and the train jumpers. Some stocks were up as much as 54%. That will never happen without panic. The rally speed up into the bell but it sold off with 10 minutes to go. People were selling the rally. I sold half of my long SSO after the bell and rolled into my short SDS. I don’t see this rally going much longer and I will be quick to sell 50% of my remaining SSO. We are right at the old lows and many people that thought they would call a bottom will be selling if we go over 850 on the S&P 500 to get even. Plus tomorrow we have consumer confidence and the revised Q3 GDP coming out and they will not be pretty. Oh yeah….lets not forget that the economy is broke and the only good news for the economy is coming from the government.
I just want to officially thank all the greedy shorts that didn’t cover last Thursday or Friday for the great two day run. I guess they thought the market was going to zero. Don’t be like these guys….sell some SSO into any rally and start scaling into SDS.
I just want to officially thank all the greedy shorts that didn’t cover last Thursday or Friday for the great two day run. I guess they thought the market was going to zero. Don’t be like these guys….sell some SSO into any rally and start scaling into SDS.
Nov24
Well, the government stepped in again to help Citigroup and I would expect to see all the financials move up sharply. Another good thing for the market will be Obama’s announcements at 11am. The market likes the guys he is picking and if he says that he is not going to repeal Bush’s tax cuts, the market will take off like a rocket. That will kill the shorts and I’ll love riding their wave of panic up. This doesn’t mean all the troubles are over. We will get another chance to reload on the short side. As far as today, I’m going to enjoy the rally and laugh at the greedy shorts that didn’t cover Thursday or Friday.
Friday, November 21, 2008
Nov 21 Post
If you haven’t had a chance to see the rip your face off 494 rally, I would suggest looking at today’s chart. Today worked out perfect for me. I had a chance to sell the last 25% of my SDS short at a higher level and roll that money into SSO at a lower level before the rally. The market was primed to go up all day but it took news about Obama placing Geithner as Treasury Secretary. The market has been wondering who is going to replace Paulson for a long time. I think the market likes Geithner ok but the main thing for the market is clarity. The next important position is replacing the moron Cox at the SEC. I hope that is announced next week.
The scary thing going into the weekend is Citigroup. Their stock is at $3.87 down 60% in a week and it looks like something is going to happen over the weekend. It is most likely going to merge with another bank. Maybe JPMorgan or Goldman Sachs but it’s hard to say. It does look like the government is going to step in and do something.
We had a really good week and I’m going to enjoy it. Have a good weekend
The scary thing going into the weekend is Citigroup. Their stock is at $3.87 down 60% in a week and it looks like something is going to happen over the weekend. It is most likely going to merge with another bank. Maybe JPMorgan or Goldman Sachs but it’s hard to say. It does look like the government is going to step in and do something.
We had a really good week and I’m going to enjoy it. Have a good weekend
Nov 21
Today has all the makings of my rip your face off rally. Of course, this type of rally will have nothing to do with the fact that our economy is screwed. It will be all technical, greed and fear driven. The moron investors that thought it would be a great idea to short yesterday will be the first to cover as they lose money. Then all the guys that have been short will be kicking themselves because they didn’t cover at the end of the day yesterday. They will feel like they lost money so they will take whatever profit they can get. Then to really push it up the buyers that don’t want to miss the rally will jump on the train. These train jumpers will be just like the morons that shorted yesterday. They will be too late and the first to sell when we roll over and they lose money.
I know this sounds crazy because buying a stock SHOULD be about buying a company’s fundamentals and looking out 6 to 12 months….not just crazy emotions. Well, fundamentals of a company are not even in the cards right now. This market is all about emotions and is moving fast. We are getting year moves in days and sometimes hours. It is crazy town and I’m trying my best to stay sane.
Never forget that the dice are loaded….throw hard!!
I know this sounds crazy because buying a stock SHOULD be about buying a company’s fundamentals and looking out 6 to 12 months….not just crazy emotions. Well, fundamentals of a company are not even in the cards right now. This market is all about emotions and is moving fast. We are getting year moves in days and sometimes hours. It is crazy town and I’m trying my best to stay sane.
Never forget that the dice are loaded….throw hard!!
Thursday, November 20, 2008
Nov 20 Post
I finally got my big drop with high volume. Volume today was double what it has been most of the past two months. I sold all but 25% of my shorts and made a nice profit. I then started scaling into SSO to go long the market. I’m looking for that short covering rally now. This has the potential of being a rip your face off rally. Once people start covering, the panic will step in on the shorts and the people not wanting to miss a big move. I don’t think it will last very long but it should be fun.
As far as today…we had all kinds of news today about bailing out the bankrupt 3. At one point, they had a bailout plan and the market rallied and then they didn’t have one. That killed the rally and the market dropped. This whole thing is a mess and this doesn’t make anyone feel good about our government.
As far as today…we had all kinds of news today about bailing out the bankrupt 3. At one point, they had a bailout plan and the market rallied and then they didn’t have one. That killed the rally and the market dropped. This whole thing is a mess and this doesn’t make anyone feel good about our government.
Nov 20
Millions of Americans are waking up to margin calls right now. We are right at the Oct 10th low and anyone that could hang on until now is finding out that they can’t. They have two options….put more money into their account or sell. If they do nothing, their broker will sell their stock. Hopelessness is setting in and people that buy and hold are getting killed. I feel bad for the baby boomers that have lost so much money in their retirement funds and it will not come back for a long time.
I will tell you someone that I don’t feel sorry for….Rick Wagner (my new name for him is Rick Wanker). Rick Wanker is a disgrace to the title CEO. This guy has no shame or humility. I listened to GM’s Q3 conference call, saw some of the hearings this week, read the letter from GM and seen many interviews from Mr. Wanker. Wanker doesn’t know the first thing about leading. A true leader own up to mistakes and doesn’t blame anything or anyone. If a leader can’t admit to mistakes made, he can’t fix them. Wanker has done nothing but place blame on others. Wanker is fighting hard to keep his job and really thinks he is doing a good job. Have some pride Wanker….you failed and it is time to fall on your sword. If Wanker was the Captain of the Titanic, he would have been the first person on a lifeboat (he proved this the way he treats GM dealers) and he would have blamed the iceberg on global cooling. He makes me sick!!!
Now what I think is going to happen today…..this is a tough one. We are right at the lows which mean we could really break and go down fast with force selling or many people could cover and push it up. This makes me think that we will go down in the morning and rally at some point in the middle of the day. I think it is prudent to 50% off shorts and add a little to SSO. Nothing goes straight up or down. I sold 50% of my SDS yesterday at 113 and added half of that money to SSO at 22.50. I’m now in a great position to win no matter what the market does. I suggest doing the same.
Oh my God….I’m just reading a headline that GMAC files application with Federal Reserve to become a bank holding company. Do they have any shame? Wanker and Cerberus is a match made in heaven…or hell. Great move Cerberus buying 51% of GMAC at the top of the market in 2006. WOW all of these guys are terrible!!! What moron is investing in Cerberus?
I did see some good news today….Prince Alwaleed is increasing his stake in Citi. He saved Citi in 1990 and I believe he purchase a lot of Citi at $3.00 then. That is really good news and could spark more oil money. It will not save us but it is good news.
I will tell you someone that I don’t feel sorry for….Rick Wagner (my new name for him is Rick Wanker). Rick Wanker is a disgrace to the title CEO. This guy has no shame or humility. I listened to GM’s Q3 conference call, saw some of the hearings this week, read the letter from GM and seen many interviews from Mr. Wanker. Wanker doesn’t know the first thing about leading. A true leader own up to mistakes and doesn’t blame anything or anyone. If a leader can’t admit to mistakes made, he can’t fix them. Wanker has done nothing but place blame on others. Wanker is fighting hard to keep his job and really thinks he is doing a good job. Have some pride Wanker….you failed and it is time to fall on your sword. If Wanker was the Captain of the Titanic, he would have been the first person on a lifeboat (he proved this the way he treats GM dealers) and he would have blamed the iceberg on global cooling. He makes me sick!!!
Now what I think is going to happen today…..this is a tough one. We are right at the lows which mean we could really break and go down fast with force selling or many people could cover and push it up. This makes me think that we will go down in the morning and rally at some point in the middle of the day. I think it is prudent to 50% off shorts and add a little to SSO. Nothing goes straight up or down. I sold 50% of my SDS yesterday at 113 and added half of that money to SSO at 22.50. I’m now in a great position to win no matter what the market does. I suggest doing the same.
Oh my God….I’m just reading a headline that GMAC files application with Federal Reserve to become a bank holding company. Do they have any shame? Wanker and Cerberus is a match made in heaven…or hell. Great move Cerberus buying 51% of GMAC at the top of the market in 2006. WOW all of these guys are terrible!!! What moron is investing in Cerberus?
I did see some good news today….Prince Alwaleed is increasing his stake in Citi. He saved Citi in 1990 and I believe he purchase a lot of Citi at $3.00 then. That is really good news and could spark more oil money. It will not save us but it is good news.
Wednesday, November 19, 2008
Nov 19 Post
If you are shocked that we broke the S&P 500 low today, well you just aren’t paying attention. Every conference call and every CEO has told us this would happen. Every company that has gone bankrupt or laid off 1000s of jobs told us this would happen. And this week….PPI and CPI told us that inflation is dead. As good as it sounds to have lower inflation…it is terrible for stocks. Think about it this way….how would you feel if you’re Best Buy and the $2 million worth of flat screen TVs you purchased over the summer are now worth $1 million. Kind of hurts your bottom line doesn’t it. CPI just told you today that their inventory is worth less today then this summer….so how many shares of Best Buy do you want? I’m thinking NONE!!!
Inflation and deflation is just supply and demand. Inflation is born from demand. If you’re the only person in a desert with a glass of water and 100s of people want that water, let the inflation begin. A bull market demands INFLATION!!! In other words, Inflation is GROWTH. Is it any wonder we broke the lows today? I don’t think so and I think we still have a long ways to go. Support has been broken and it is Dow 6000 is just around the corner. Stay short!!
Inflation and deflation is just supply and demand. Inflation is born from demand. If you’re the only person in a desert with a glass of water and 100s of people want that water, let the inflation begin. A bull market demands INFLATION!!! In other words, Inflation is GROWTH. Is it any wonder we broke the lows today? I don’t think so and I think we still have a long ways to go. Support has been broken and it is Dow 6000 is just around the corner. Stay short!!
Saturday, November 1, 2008
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