Dec 9

It’s time for the short squeeze to stop. With the terrible news from FedEx, Texas Instruments, Sony, Con-Way, Sirf and National Semi after the closing bell yesterday, I can’t see how anyone would buy a stock today. Let’s not forget that we are up 1000 points on the Dow. Only someone forced to buy (short squeeze) or someone that just doesn’t get it would buy today. Plus we are at the top of a range. I added to my shorts after the bell yesterday and I’m looking for a sharp turn. Let’s see if the Government comes out with another billion dollar program to blow my move out of the water….for a couple days.

Dec 8

Over the weekend: laid off factory workers did a sit in to get money they were promised, another bank went under, Chris Dodd said that Rick Wanker should go and Chrysler should merge, and Obama said he doesn’t want the bankrupt 3 to go bankrupt and he wants cars to run on unicorn kisses. Obama also outlined a plan to build more bridges and roads, the Tribune may file for bankruptcy and is trying to sell the Chicago Cubs, New York Times is trying to borrow $225 million to keep going, Toyota is talking about cutting capex by 40%, 3M is cutting 1,800 jobs and is asking workers to take vacations or unpaid time off, the huge hedge fund Citadel is closing some of its Asian operations, and Anheuser-Busch InBev is cutting UK jobs. Boy I can’t wait to buy a stock with this news.

Is anyone else worried about Chris Dodd telling any company what to do? I think Rick Wanker should go but I don’t want the government to do it and especially Chris Dodd. Dodd took more money from Fannie and Freddie than anyone else in Washington. He is one of the main reasons why this subprime mess happened at all. I wouldn’t look to him for great judgment.

I think the market is going to continue the bad news is good news rally that started Friday. I don’t believe it for one second. I think the shorts are getting squeezed and will drive the market up. The low volume on Friday and the low yields on T-Bills do not make me think the market is turning up. I’m going to be very interested in seeing how the market reacts to 900 on the S&P 500. That has been the top of the range and if we blow through 900 we will have a serious short squeeze on our hands and the market will rally hard. I will look at a rally as an opportunity to sell some of my long positions and add to my shorts.

Dec 5 JOBS JOBS JOBS!!!

JOBS JOBS JOBS!!! The most important data from last month is the Nonfarm Payrolls number coming out at 7:30am. Consensus is -325K. Just to give you an idea of how high this is historically….-350K has only happened about 10 times since 1950. -400K-420K has not been seen since May of 1980. Only about 3 times have we seen numbers above -400K. If we are below -325K, I don’t think people will believe the number. If we are inline or just above -325K, the market has the potential of rallying. If we are above -450K, we should selloff hard. Everyone knows this number is going to be bad and we sold off at the end of the day yesterday. I can’t find a reason to buy any stock. I’m short and set up perfect to take full advantage of a big selloff. I will be holding my breath as the number comes out.

China’s Auto Sales are down 10.28% in November. This is big news because earlier this year I read reports about how fast China was growing and they were buying 20,000 new cars a day. China has been buying a lot of our T-Bills and with news like this one has to think they will slow that down. In other words, the US Government borrows money from China. With the way our Government is spending money, this does make me worry. Speaking of that…I hear people say that our Government is spending money like a drunken Sailor. I think like that is an insult to drunken Sailors. At least a drunken Sailor spends his own money.

Dec 4

Ok…the government intervention is officially out of control. The idea of the government manipulating mortgage rates down to 4.5% is going to a dangerous area. Where will this stop? Why don’t they just set the price for every stock as well? The reason we are in this position is because of government manipulation and I’m guessing doing the same thing will not get us out of it. I hope you guys realize that the Fed is printing money and buying 10 year Bills to drive down the yield and lower mortgage rates. They started this last week and it has driven down mortgage rates. At the end of the day yesterday, The Wall St Journal sent out a rumor saying that the government is going to do even more to push the mortgage rate down more. The Treasury hasn’t confirmed or denied the story.

We have some data coming out and the bankrupt 3 show in Washington. We are also going to get retail same store sales for November. This will give us some real numbers for Black Friday weekend. The numbers coming across right now are ugly. Many are down double digits. We will also get factory orders and the all important weekly jobless claims. Speaking of jobs loss….all day long I see stories of companies cutting thousands of jobs around the world. It is just picking up speed.

We also have the ECB and BOE looking to cut rates. We have already had many rate cuts around the world this week. New Zealand, Taiwan, Sweden China and many more have been cutting in a big way. This doesn’t make me feel very good about the economy if the central banks are making such aggressive cuts. They must see something really bad out there. However, I don’t think cutting rates means much in a deflationary environment and when the banks don’t lend…what difference does it make? Tichet should’ve been cutting rates all this year instead of raising them. What a moron!! I just got the rate cuts for BOE and ECB. BOE cut 100 BPS to 2% and ECB cut 75 BPS to 2.50%. This is just a show now. They will be at 0 just like we will in a few months.

I’m not even going to make a prediction with all this data and government manipulations today. This market is broken and going down. I can’t come up with one reason for this market to go up….of course besides another government program. Stay short!!

Dec 3

Today is all about one thing….DATA. We are getting the Fed’s Beige Book, ISM Services, Productivity-Rev and ADP Employment. The Fed’s Beige Book can move the market. It only comes out 8 times a year. It’s a report where each of the 12 Federal Reserve Banks gather anecdotal information on current economic conditions in their district interviewing key business contacts, economists, market experts and other sources. The ADP Employment report will be our first look at job loss in November. The market doesn’t get too excited about ADP because historically it will be off the all important Nonfarm payrolls numbers coming out Friday. However, a number higher than -200K will not be good for the market. Productivity-Rev and ADP come out before the opening bell, ISM Services is at 9am and the important Fed’s Beige Book is out at 1pm.

It is really hard for me to predict what the market will do without knowing the data, but that will not stop me. I think the data will be a train wreck and we will give back all the gains from yesterday and more. All the market needs is a small reason to sell/short. If we are near 820 on the S&P 500 around the announcement of the Beige Book (providing it is as bad as I think) we will push right through that resistance level and go to 800 fast. Let’s see what the data gives us.

Ok…now my rant about the bankrupt 3. They are all a disgrace to the title CEO but I want to rant about Rick Wanker. What planet is this guy on? He is saying that GM needs $4 billion today to make it to the end of the year. This didn’t just happen this year. These guys have been falling apart for a long time. I like to look at debt to see how bad a company is. GM owes creditors $45 billion. Now Wanker wants to swap their bond holders to worthless equity paper. How are they going to pay back the $45 billion plus the new $18 billion they are asking for right now? They will go bankrupt. Electric cars are not going to save them. We don’t have enough electricity output right now to handle electric cars. CA and other states already have brownouts. Plus 50% of electricity comes from coal. How green is that? Let’s not forget that tax on gas pays for our roads. Why don’t they just bring their Natural Gas cars into the US and stop this electric car crap. Ok…I’m done.

Dec 1

The data is coming out on Black Friday and the entire weekend. I’ve read many reports about Black Friday but I want to see the MasterCard data coming out sometime today. What I know so far is Black Friday was up 3% this year over last year, full weekend up 7.2%, and gift cards are down 10%. Black Friday sounds pretty good but we were up 8.3% in 2007 over 2006. So we just kept up with inflation and didn’t keep the growth curve. The next question is did any of the stores make money. With the 50%-70% mark downs to get people into the doors the profits had to be hurt. I think what happened is people stopped buying in September and waited for the Black Friday deals. I think the sales are going to fall off a cliff now. I did my own shopping research on Friday. Terah and I went to the mall and it looked like a busy day but nothing impressive. Then we went to Target and it was nothing. I didn’t even wait in line to pay. We also went to Costco on Sunday and it was lighter than normal.

I’m not sure if the market will look at the retail information as a good or bad thing. It’s all a matter of what is expected. I’m not impressed. We have Obama, Bernanke and Paulson talking today and the market loves to sell when these guys talk. I can’t find a good reason for the market to go up besides more short covering and people buying into automakers for the bailout play. Maybe the government will come out with another program to save us all. What a joke!! All T-Bills are going down to record lows and Libor is going back up. These are bad things for stocks. I’m short and ready for the turn.

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.

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!!

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!!

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.

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!!

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.