Interesting Day

Very interesting day indeed. Seems like the big guys are selling up here since the open but the price has not confirmed it but the were selling heavily in the pit: This is a sign of distribution and you have to be careful if you are long.


Still waiting out to see where this shake out takes us.

Some levels to watch

Some levels to watch for tomorrow
889 then 898.25 I guess you could call that 900

Cancel Trade call

With the futures rallying overnight cancel that trade call for tomorrow morning on Apple.
Let us wait it out
MARKETJEDI

Trade Call- APPLE SHORT

My nemesis stock APPLE. By the record I have with this stock it should be a loser but I am trying once again because I HATE to lose.
Shorting this one tomorrow morning @$125

$115 Puts look ok but I am shorting the stock here.


MARKETJEDI

Warning

I have been saying this market will not just die here. I have noted this to a couple of people numerous times but they are too bearish. Although I am bearish longer term we are in a corrective pattern here and as said before we could goto 900-1040 area but as off now I am just playing it using time and this uptrend should plateau off in July.
Said it over the weekend on the blog the short will fuel the next upside for being too stubborn

Higher we GO

Higher we go into the FED meeting. 874.50 wow this is stiff resistance and it would be the death of the bears if they close above it

GDP DOWN

GDP DOWN 6.1% for first quarter

FED DAY

Today is FED day so expect little volume till after the announcement. Most traders usually take the day off and I might do the same.
Not much the FED can do but it is important about what they say about where we are in the economy especially with credit.

HIGHER

837/8 holding ground and as I said we should go higher if it holds. Expect up to grind higher into the close. First target is 861.50 then 866.00, another turnaround tuesday in effect

838 Traded overnight

We traded within 1 point of the 837 noted in the blog overnight- Will this we a support area or will we test it during the regular hours and slice through it.
Bank of America and Citi looks like they need more capital per the stress test, so expect the financials to take a breather. As I have said I believe these banks are all insolvent and it is just a matter of time before all the masquerade is over about these institutions.
I hope this chop is over soon but most importantly watch how we trade around the 837/838 level today it is extremely important

Swine Flu

Well there wasn't must effects on the Swine Flu on our markets today. We just bob and weave as usual for a nothing day. It will be interesting how we move out of this news as if we grind higher that would imply this market will go higher.
For those who don't sleep in the nights like myself I will be watching if we break that 850 area. Today I was in much pain and missed some sell signals which proved profitable but I wasn't in, so I move on.
There should be some support down by 848.50 overnight but that doesn't mean they wont crack it lower. For tomorrrow I would love to see a much lower open then we bob and weave and head high. I think a move like that would be bullish but if we sell down to the 837 and dont hold that would be my first sign that the bears might be coming out the sleep for the last 6 weeks.


MARKETJEDI

Upside Projects

I have upside projections now to 906 on the S&P and 8450 on the DOW. Do we reach there on the next push up after a rest??

One More Push

Yes folks we going to get one more push based on the shorts giving up and that will be it. I am thinking it might be worth around 400 Dow point or so but who knows. This last 6 weeks have been the craziest market I have ever seen and everyone who I talk to professionally repeats the same.
Now we look like we want to edge out a higher range on the markets and believe me I dont mind as the higher we go the more playable it will be when we are finished with this wave 4 chopfest. I am looking at some plays here BUT as I said we finished this week exactly where we ended last week so what is the sense.

Have a great weekend and this weekend I will be posting some charts again since I am feeling much better.


MARKETJEDI.


P.S. By this summer this blog will more than likely be no more but will be transformed into website format so we can implement a number of new initiatives.
Stay Tuned

Nullify the Week

Last week we close @ 867 and we are now @ 862. One week and we have gone zero in the markets, monday down, tuesday up, wednesday down, thursday up. GEEZ

CHOPFEST

Stress Test News @ 2PM,

Remember we have stress test news @2PM. Market is very strong into it. Do they sell the news or do they squeeze the shorts to higher prices.

I have no IDEA!!

857 Broken

We are major bullish here since we have broken higher from those numbers. It has been a straight shot up and as I said I believe alot of shorts are going to cover and fuel a push up higher.
Next week should be very interesting to see if they can continue us higher or we pullback

Plays

I have a couple of plays setting up but geez this wave 4 is killing me to get them accurately. It is chop fest out there and I dont want to misguide persons who might be following the plays here. So it would be prudent of me to wait till this chopfest is over and give the huge winners we are known for.

Just a little patience.


MARKETJEDI

856/857

Just finished doing some homework and have come to the conclusion 856/857 area must act as resistance tomorrow for the bears are we will head towards that 875 area. On the downside 838/839 is very important to the bulls if they close above that tomorrow they will end the week neutral and not giving the bears the edge.
So there you have your upper and lower area to watch for tomorrow.

Thursday

Recap - Another day the bulls have given the bears something to think about. It is very easy for the bears to think we should go down but as I noted there is also alot of reasons for the bulls to trade this market NOT invest. The thing I see is alot of small caps rallying and this is usually a sign of the end is close BUT the battle lines seem to be on the bulls side no matter what the charts and signals say.
I expect the longer they take to give up the weak bears might throw in the towel and give us a push up that WILL be the final push up, we call this a TRAP among traders.
I definitely think this is what will play out but we will see soon enough.
For tomorrow we should be hearing some preliminary news on the stress test and that might lead us early on. I have no idea how tomorrow will go so it is a play as we go here.

MARKETJEDI

What a day

Man oh man what a day. We traded like mad dogs out of the gate and went up to fill the gap left from last friday and that made alot of bears cover. Why wouldn't they we basically moved 200 DOW points in an hour of the open and everything seemed ok for the bulls till 3:10 when we reversed the action. You dont see alot of days like this and it was definitely special as now we will see who is the strongest here and now, the bulls or the bears.
The bulls wont give us easily but they need to rest but the bears don't seem that confident because everyday we get a sell off at the end of day the following day the bulls take it back.
Here and now the battle truly begins as most of the important earnings are out of the way and the TARP news seem to be fizzling away now the true market will present itself at least for a short period of time.

Watch the action in the first 90 minutes tomorrow it will be crucial!!!


MARKETJEDI

Remember

Remember folks dont want to confuse anyone - We can still pullback to 790 area or so on the S&P and still be in a bullish formation so dont get caught up on a pullback till the bullish pattern is broken down and negates the upside

Higher

I have been saying be careful with just saying this market is down and trust me it will BUT right now it is in an uptrend. After yesterday down day I told someone all the bears will be out after the close saying we are going down now but I dont buy it, what a good thing because we moved higher today and although we didn't erase all of yesterday's losses the volume was much higher which is bullish.
I have posted a couple of time I believe we are in a uptrend till July and I stick by that, any sizeable sell off will be met by serious buyers till then. I truly believe we will see the mid 900 levels on the S&P and DOW 8500 then it is anyone's guess.
Personally I would love to see S&P 1000 so I can make some serious money shorting it up there but right now I will just buy time.
Folks yes the banks and dead and the insurers and the real estate REITS but funds can't just keep buying treasuries and get 1% and less so they are gambling on buying some cheap priced stocks than will probably give them better returns trading in and out of them. Look at BAC when from $4 to $11, who wouldn't want to catch $2 move on that than be in treasuries. Now believe me they dont want to own these long term just for a trade and that's why the market is so whippy but BUYABLE till the FED starts to say they are easing what they are doing and then we will be in a safety zone buy. It is that simple not complex at all just wait it out if you not willing to trade it out.

Tomorrow I would be a buyer if we gap down. Remember DOW 8500 and S&P 900.

Nasdaq Volume

Today's was the heaviest volume day for 2009 for the Nasdaq. It was over 50 % above last week's volume, which must be noted carefully.


MARKEJEDI.

Resistance levels

Resistance levels are now 845 and 852 on the S&P. Watch those numbers tomorrow. I would be a seller up there

Wave Count

I have been trying to put a handle on this but really I am no way an Elliot Wave expert so take it as such but I think we just finished five waves up on this uptrend and we will now form our ABC pattern.
NOW IF I AM READING THIS CORRECTLY!!!! we should make a B down to or below 800 then a C up and over this last high of the 870 area. Now I will investigate more and have it for you later

S&P- 549

Someone emailed me asking why am I focused on S&P 549/550 area as possible bottom -

well here it is in the simplest form

Tuesday

Tuesday look for the first part of the day to consolidate the huge downtrend of today. I would not be surprised if we have an non eventful day till after lunch tomorrow where the big money will then tip there hands. If during the lunch time hours we are flat or close to flat there is a good shot we will have a turn around tuesday but my belief is that we will start the day negative and stay that way in a narrow range till after lunch.
Today sell off as I said before might be bad but it is good for the bulls to also rest, remember we can pullback to the 790 area and still be intact for more upside. We ended today right above the support level so overnight might be interested when europe opens.
I would be looking at that 815 on the futures as some first level of serious support if we sell off tomorrow and possibly down to 790 but I am sure we wouldn't get that far tomorrow if we did WOW that would be super negative.
Remember we just wiped out 6 days of gains in one day, so lets see what happens tomorrow.

Hmmmmm

So it take us one day to wipe out 6 days gains and they think we in a new bull market. Oh yes I guess they all will be buying tomorrow. One think I will leave you will today is the volume, it was much higher than all of the days last week and even in distribution, that speaks volumes! or should I say no volume :)
Today was the third heaviest day in volume for the last 20 trading days so the proof is in the pudding.
Man I keep on saying thursday and friday of option expiration is total manipulation and we hit 870 area friday and look at where we are today. Now one caveat is I don't think this is the start of a big push down but it will put the fear of a failing rally in the minds of many. I still think we get some more upside after this pullback.

MARKETJEDI.

P.S. I will be listening to the Crazy money and Crackheadmer shows tonight to hear what they have to say. Man it sucks that Dillon left Crazy money it is so boring now!!!

BAC

Man oh Man came out of that BAC short on friday afraid of the earnings but it went lower. Oh well as long as you follow your rules and made money it is ok.

5 Minutes till OPEN

Looking at a big gap down to start the first day of the week. Lets see if they attempt to fill the gap even 1/2 way if not then we should have a trend day down.

Let me see if I was right about 871 being a good place to get short

Unemployment over 11% in CA

Wow unemployment figures are now 11.6% in California and most are saying the real numbers are closer to 15%. How could we be seeing higher unemployment and lower sales but the market Is moving higher. These are the underlining things you should be looking at to analyze where we are in the economic cycle.
The banks made profits virtually because of the zero interest rates from the FED and lending it to you at 25% on your credit cards and 5% on your mortgage, if they can't make money like that I dont know how else they can. Another important thing to look at in the banks is the trading of the toxic assets which they are allocating fees on and therefore making a profit on just shifting these toxic assets around, another manipulation of the musical chairs but the music will stop there soon and if they don't start lending again then they will move to losses again. The problems are deep and won't be corrected till the excesses are wrung out of the system.
Last week on CNBC they had on a real estate segment showing 2-3 yr old condos selling at 20% of the original asking prices but yet still they aren't being purchased because buyers can't get the mortgages from the banks. The banks are the problem and till they are FORCED to lend and stop lining their pockets with the taxpayers monies we will lengthen the recovery for the economy and it is that simple.
Next week I am going out on a limb here and say we will see lower prices. The moved here is a measure moved and we should see lower prices or as crazy as it might be higher prices a=on much lower volume. The trading days are so narrow it is like watching paint dry but as I said to some of you who email me it is tthe wave four pattern in the elliott wave so it excepted.
Stay put because we will soon get some wild volatility again to ride. I still except the bulls to defend the uptrend till July then after the bulls will take it by the horns again, so bulls have your fun, your time is limited!!!!!!


MARKETJEDI

871.75

Well that's close enough to my top of range 874. Shorting here for a couple of days is a very very good play IMO.

878 would be sweeter.

Option Exipration

Today is options expiration and I won't be trading. Don't be surrprised if they ramp us up into some kind of climax for a short term peak so we careful out there.

Have a good trading day. I would not be surprised if they try for 875 today .


MARKETJEDI

Google

Google doesn't look like it will save the day this time around. With all the hype buying of the techs I think most optimistic investors will be left holding the bag once again on these stocks.
Someone ask why I am so bearish and the answer is yes and no. Yes in the big picture I think this market is vastly overvalued, I think the S&P has a target down to 570 and the DOW about 4700, when it touches those levels I will think about buying without keeping on eye on my holdings everday. No I am a trader and becasue of this don't think I dont get long in this environment. I often have gotten long intraday during the last month but I don't trust overnight to hold them or post those trades on the blog. This is a traders market and if you aren't swift you will make any money. For example this evening when Google reported earnings the stock was up some $30 and in 2 hours it was down, just think about it, You are an investors and bought Google thinking earnings were good today and what did you get a bump after hours then $30 fizzled away so now you back to even. Tomorrow who know where GOOGLE goes but I am telling you this GOOGLE will see $250 this year after the reality hits that earnings aren't recovering at the pace most think they will.
Next week should be interested and I feel like we will dive into the end of month when their is no earnings to keep us up. The trading is choppy and if you notice the volume is very light and manipulated towards the closing hours of the day when the big guys try to push up the futures. We are moving higher on lower earnings, lower volume, high unemployment and the constant news out of Washington. This is not a investible environment but we will play it as it comes.


Bye Bye GOOGLE,
Nice knowing you see you at $165 when the bear market ends.

Short term

Short term here we are getting numerous signals of the rally getting long in the tooth. If you are long oh yes you need to be nervous here. We hit that 865 level that I wrote about months ago as a important level on the upside (actually wrote 863/874), so be very very very careful.

GOOGLE OPPS

Maybe I should have said lower in two hours. GOOG is down $25 since I posted the last blog post!!!

GOOGLE

Geez
who told you that they would blow out earnings. Man oh Man I tell you this smart money is going to be dumping some high priced stuff on some fools. Well folks we in a corrective pattern here and not much else to say. I still believe we will stay in the pattern till around June/July time frame and that means on any significant pullback I would be a buyer till that time period.
One thing to to careful of is that in earnings stock usually run into reports then sell off, look at GS. Google is up $30 at a little over $400 but in two weeks I can bet it will be lower, these are just patterns that play out over and over again.

One other very important trend to remember, we also reverse the movement of options expiration week, the following week. So since we are positive this week I expect us to be negative next week.

I am feeling a lot better but still under the weather and will be back in gear soon.

Higher

Higher into GOOGLE earnings. Man oh Man the manipulation on options expiration is unreal. Remember guys I wont be around tomorrow - I DONT TRADE OPTIONS EXPIRATION.

Overnight

The craziness of the last 3 weeks continued overnight as we moved in a 15 point range in the S&P futures. This is unheard of but seem to be regular these past 3 weeks. One reason could be the light volume of the US participants in the globex so the Europeans traders have more weights on the markets overnight.

GOOG

Remember GOOGLILICUOUS reports after market and that can move the nasdaq. Dont be fooled remember GOOG co-founder is in Obama's administration and I am very sure they got some business passed their way on that. I am looking for a strong quarter and outlook but you never know but if I wa a betting guy that would be my bet. Where the stock goes is another question!!!!

JPM Reports

JPM reports this morning and looks like their net profit is down 10%. The stock is down pre market but come on the street already knew this two weeks ago when Dimon said the quarter would be rough.
JPM don't seem as strong in my opinion here. Think about it they changed the accounting rules and that didn't benefit them.

Telling you this here and now I believe BAC will be the top bank in the future. We will see soon enough.

MARKETJEDI

Article on Hyper-Inflation

The economy is cratering, so the Fed is printing money. When the Fed prints money, this eventually produces inflation (more dollars, same amount of goods).

Ben Bernanke assured us yesterday that, this time, the Fed's money-printing won't eventually lead to inflation because the moment the economy begins to recover, the Fed will stop printing money and start burning it. Specifically, the Fed will start selling assets instead of buying them and thus shrink the money supply.

Unfortunately, Ben is unlikely to keep this promise.

Why?

Several reasons:

* First, it will be hard to confidently assert that the economy in full recovery. Remember, in 2007, Ben (and most other people) thought the economy was in great shape as far as the eye could see. He and most other observers missed that disastrous turning point. So why do we think he'll correctly spot the next one? Especially because, if he blows it by jacking up rates too early, he'll kill the recovery.
* Second, there will be intense political pressure to MAKE SURE that the economy is in rip-roaring health before hammering consumers and businesses by raising interest rates. Everyone loves low interest rates. And they'll only stop screaming about your taking them away when they're fat and happy (which will be long after inflation really gets going).
* Third, the US government desperately needs low interest rates to fund its soon-to-be-monstrous debt load, so there will be another source of pressure on Ben to keep rates low. When we finish with all this stimulus, we're going to owe a boatload of money. We're really going to allow our Fed chief to send interest rates to the moon and jack up our refinancing costs?
* Fourth, many of the assets that Bernanke has been buying to print money won't be easy to sell. This time around, the Fed isn't just buying easy-to-sell Treasuries. It's buying trash mortgage assets, et al. To reduce the money supply, it will need to sell them to someone. But who?


In the latest issue of the Institutional Risk Analyst, Chris Whalen hammers this last point home. Chris thinks we're now officially addicted to low interest rates and that Bernanke will be both unwilling and unable to raise them significantly when the time comes. And the failure to raise, them, of course, will lead to hyper-inflation.

BAC Update

Cover BAC here + $1.50

Question about pullback

I got a question about pullback and how deep.
To answer the question here we could get a pullback to S&P 792 and still be in a bullish pattern, IF we break that then I would have to do our my analysis and see how lower the pattern could go.

Re: Gap fill area from last week is around 818-827, so watch here from support.


MARKETJEDI

GS

I am going to write a long thesis on the Goldman Sachs sell off today when I feel much better health wise. The corrupt of the system runs so deep but I will try to explain as simple and concise as I can, when I do.

Simple though Goldman Sachs is the biggest crook around !!!!!!

After market

Market is trading around the 834 level 7:30 PM tuesday and this is very close to support area I have @ 832. An important level to watch overnight indeed.
Below that we have 823 and then 816.
This is my scenario here, I think after this week earnings and options expiration the market will find it hard not to get a decent retracement. Based on this I am basically looking for one last push higher into friday/monday before we start this retracement.
Not much is going on either way as this is the deadly WAVE FOUR pattern in the elliot wave and the most difficult to trade. I will pass my time till it is over and get a real trend going, WHY FIGHT THE TAPE, WE ARE IN CHOP MODE!!!


MARKETJEDI

BAC

Looking to cover BAC around $9 level.

Cover SPY 1/2

Cover 1/2 SPY here from yesterday +$2

GS

Well for those who wondered why GS is down huge on making so much profit, it is once again in the details. The details are the quarter didn't include the month of December and therefore not a true representation of the earnings. Now I ask you this? WHY AREN'T THESE PEOPLE IN TROUBLE?????

When will the manipulation end???

Goldman Sachs

Yep called it Goldman would beat estimates but the big news is that they want to pay back TARP money ASAP because they don't want to be constrained by the government on their lofty pay packages.Folks this is the most corrupted system I have ever seen in my life. Goldman Sachs borrows taxpayers money to save themselves and then the government rigs the rules so they don't have to take any writedowns and then their stock skyrockets to $130 a share for really no reason. FOLKS THIS IS STEALING!!!! And what does the taxpayer get ZERO nothing NADA.
I have no love for GS because the are the ones that created the the problems and now again they have abused the system because of their inside connection and now have stolen from the taxpayers.
Anyways these earnings on the financials are important I believe. I do believe we either very close to a top here or we get one more push on them then crash and burn. The big question is how far do they pull back. I am telling you this they will be lower next year this time for sure, I can bet my life on it, but who knows maybe BAC goes back to $40, GS goes to $250 and citibank goes to $25 but I dont think I would wait for that dream.

I am still under the weather and just waiting and buying time for the market to give us better trading opportunities. The time to be patient is NOW.

MARKETJEDI

Shorted SPY

Shorted @ 86.30

BAC

Taking BAC short here @$11 with a $13 stop.

What the heck

Monday

Remember today is still a holiday for many as it is easter monday. Overnight volume on the futures is very light as European markets are closed. I might not be around as I am totally sick with my sinuses and barely slept last night.


MARKETJEDI

Monday and Tuesday

One great trend I have noticed through the years is that of pre long holiday weekends. The trend is we easily move high on low volume as only the small players are in the market and then when we get back from the holidays the big money gap us down and reverse the gains. Will this happen monday and tuesday I think so.
Today I was hoping for 853/854 area and we went to 856, nice call indeed but I believe we are at the top of the range +/-8 points.
Support sunday night on the futures if we gap down should be 846 and the resistance here should be 861/862 area. Next week should be fun, much fun and I expect up to move up a little move before we head down into the later days of the month.

Have a restful and peaceful weekend.


MARKETJEDI

Watching paint dry

Well again another watching paint dry day. The market gapped up on the Wells Fargo news and then nothing, no volume no follow through, whatelse can you say.
This is one very slow slow slow day

Food for thought-

It is a well engineered, government supported manipulation that Well Fargo , unfortunately, reported 0.55, a fake number, still 10 cents below expectation.

But the FASB rule change allows them to report it like this. They can state a false net income number, as long as they disclose the writeoffs in brackets down below.

The stock is under tremendous distribution since the open, despite the fact that this is a pre-holiday trading day.

WFC, considering a PE ratio of 16 which is over the top given the current conditions, is worth only $8 today. However the market doesn't only price today's conditions but 6+ months future.

So WFC today is worth $2-$3 like all other major banks you know of.

Here is the thing you should be careful. Conventional wisdom today changed. Masses now think that they will get the same reaction after all other bank earnings. There is no free lunch in this business. If the market unloads WFC after the news, which is the current case, this mind-set will be a trap to the broke-house. Because these banks may not see these prices for the rest of their business lifes.


These are not my words

Banks en Fuego

Banks all up on the Wells Fargo news- I hope we get that 850 area today.

Soros on Obama and the Banks

Number to watch

Watch that 854 area on the S&P it is still in play and actually might get hit today.

Keep you posted later on

WFC UP

WFC up on news that the Wachovia merger is working out well. My opinion it is the mark to market rules in action and nothing more.

Thursday

Expect a very light day of trading today and narrow range. Yesterday I had my doctor's appointment and got some medication so I hope I am in a better mood next week.
There is no reason to trade today a day before holiday as most traders have already taken off.
I will have my system on looking but I doubt it will be an eventful day.

Have a great long weekend

Broken

It is 10:15 Pm and I just checked we broke that 810 level and now sitting at 804.
Now the only other number I have below is 792/3 area so watch for that overnight or early tomorrow.
I think that might be a good buy stop but make sure volume is there

Sell Signals

Getting some sell signals again but the anaemic volume makes me less aggressive to take it. Alcoa had a 56 cent loss per share but it was less than the 59 that the street expected so we will see how the markets react to it tomorrow.
I will be late tomorrow as I have a doctor's appointment in the morning for this darn sinuses suffering, I am running on empty so they better give me something to juice me up :)
Very narrow range today again and most traders I have spoken to think no one is willing to commit right here, if we can stay up here could be positive but any big misses on earning and we will spiral down.

Watch todays lows on the S&P 810.75, it might prove critical tomorrow.
I am basically neutral here into Thursday.

Will be back lunch tomorrow.

WRC and SRS look like two nice plays here.


MARKETJEDI

TRADE CALL: SHORT WRC

No Options just straight short.

WRC @$24.84

Narrow range

Very range again if that was ever possible today. Geez seem like everyone is out for some holiday that I don't know about. Earlier on we looked like we were setting up bear flag but they were negated. One strange see saw market again that has just gapped down huge and then nothing when the market has opened.


Let's see if Alcoa can spark up some interest in the markets.

Tuesday

Well another gap down today. Do we fill the gap or do we continue down. Very hard to say but I can tell you this, these huge overnight action then narrow range in the regular hours is going to keep traders out of the market for sure. Hopefully most are just waiting on earnings which will start tonight with Alcoa.
If there is no action by 11 I will be gone.

Good Trading

MARKETJEDI.

P.S. I officially hate AZO as much as AAPL. I guess I won't trade atock that start with A :)

Trying everything to prevent market from going down

WASHINGTON (Reuters) – U.S. securities regulators will consider about 4 proposals to restrict short selling, a type of investing blamed for accelerating the severe downturn in financial services stocks.

Proposals the SEC will consider at its Wednesday meeting include the restoration of the "uptick rule," which allowed short sales -- a bet that a stock's price will fall -- only when the last sale price was higher than the previous price, the chief of the Securities and Exchange Commission said on Monday.

"We are going to put forward about four different proposals, and one of them does include the original (uptick rule)," SEC Chairwoman Mary Schapiro told reporters on the sidelines of the Council of Institutional Investors conference. "There are different modified versions because the markets have changed a lot, even since 2007."

Schapiro said other proposals on the table include a so-called "bid test" and a "circuit breaker."

Schapiro did not provide details on how the bid test or circuit breaker could work and did not elaborate on the fourth proposal.

One source familiar with the matter said the SEC bid test proposal would only allow shorting at a price above the highest available bid. The source wished to remain anonymous because the proposals are still being drafted.

The proposal for the updated version of the uptick rule would apply to all stocks, said the source who wished to remain anonymous because the proposals are still being drafted.

The SEC also is crafting two circuit breaker proposals: One would temporarily halt short sales of a stock if the stock has already fallen by a certain percentage, the source said.

The other would trigger the application of an uptick rule or bid test after the price of a stock experienced a decline by a certain percentage, such as 10 percent, the source said. This version of the circuit breaker is similar to a suggestion put forth by the operators of the top U.S. exchanges, the New York Stock Exchange, the Nasdaq Stock Market and BATS exchange.

SEC staff are still drafting proposals, the source and a second source familiar with the proposal said. The second source cautioned that the current draft could go through several more adjustments before Wednesday's meeting.

In a short sale, an investor borrows stock and sells it in the hope that its price will fall. If the price does drop, the seller profits by buying the stock back at the lower price and returning the borrowed shares.

In 2007 the SEC abolished the uptick rule after studies concluded that advances in trading strategies had rendered it ineffective.

At the time, the SEC's action did not trigger cries from investors and lawmakers. However, as stocks of big investment and commercial banks sank over the past year, some members of Congress started pressuring the SEC to restore the rule.

Some short sellers have questioned the need for the reinstatement of the rule, saying they are being unfairly targeted.

Two bills to reinstate the uptick rule have been introduced in the U.S. House of Representatives and a similar bill has been introduced in the U.S. Senate.

"Abusive short selling has gone unaddressed for too long and simply must end if the SEC is to restore investor confidence in the markets," six Senators including Democrats Carl Levin and Edward Kaufman and Republican Arlen Specter, said in a recent letter to Schapiro.

"In the absence of a strong message from the SEC, we believe Congress will need to consider legislation that directs the SEC to do so," the Senators said in a letter dated April 1.

Billionaire investor George Soros said on Monday that he favored a reintroduction of some kind of rule to restrict short selling. "You do need to provide some protection against effectively the bear raids," Soros told Reuters Financial Television in an interview.

A final rule will not be adopted at this week's SEC meeting. The agency will still need to solicit public comment on its proposals and hold another meeting to decide on final short sale restrictions as part of its normal rulemaking process.

When asked if she favored restoring the uptick rule, Schapiro said she was anxious to read the comments.

Earlier in a speech to institutional investors, Schapiro said the SEC would convene a roundtable later to discuss the proposals and potentially some broader issues on short selling.

The wait

Traders are waiting for earnings season to get in full gear to assess where sectors will likely go. Remember this last month movement up is based on a oversold condition in the market and now earnings will separate the strong sectors from the weak, therefore marking out the leaders and laggers here. Not much went on today but chop and a very narrow range but if I had to give it to one side it would be the bulls as we didn't sell off hard on the gap down.
The internals here show we are overbought but that doesn't mean we can't get more overbought so stay nimble here.


MARKETJEDI

Indecision

Extreme indecision in the market today. The range has been the lowest in a long time and volume. Whether it is the news on the banks or the upcoming holidays the volume is extremely low.
What this means is we in chopfest. Chopfest! how long will it last is the question. I am still looking for a little high prices up there in the 850-855 before I say all out this is the top of this leg, till then we are in no man's lands

Drip

Lack of early gap fade suggests lower prices in the afternoon, but the bulls have been relentless at buying weakness over the last few weeks, so will this just offer up another buying op for them?

Key downside number is 810.25, key upside number should be the high of day.

Early

Early pre market weakness due to analyst sell ratings on BANK stocks.

Video

http://www.pbs.org/moyers/journal/04032009/watch.html

Possible Wave count

I got asked a couple times about wave counts so this is for you guys. This is a possible wave count I am looking at currently. As you can see I expect us to reach a hi out of this pattern in July then attack the lows.
As you can see we are in wave 4 which is a corrective wave in the downward cycle, then we head for new lows on wave 5

Mark to Market Rules-

Friday, April 3, 2009
FASB Rules Won't Make Banks Money

FN: Yup. Reality vs Fantasy. Reality always wins… eventually.

Bank Stocks Won’t Get Lift From FASB, Goldman Says (Update1): “The relaxation of fair-value accounting rules won’t prevent bank shares from falling because growth in bad loans is accelerating, according to Goldman Sachs Group Inc.

“Our core view is that banks will not bottom until underperforming asset growth decelerates,” Richard Ramsden, a New York-based analyst at Goldman Sachs, wrote in a report today. “Loans are going bad faster than banks earn money.”

…

Delinquent loans are increasing at a 3 percent annual rate industrywide, compared with a 2.5 percent rise in earnings before setting aside money for bad loans, Ramsden said.

…

U.S. regulators may force Bank of America, Citigroup and at least a dozen of the nation’s biggest financial institutions to write down as much as $1 trillion in loans, twice what they’ve already recorded, based on Federal Deposit Insurance Corp. auction data compiled by Bloomberg.

Banks failing Federal Reserve evaluations of loans this month may be ordered to make sales worth as little as 32 cents on the dollar, according to FDIC data. That would be less than half of the 84 cents on the dollar the Treasury Department suggested was a possible purchase price. Some of the bank- insurance agency’s auctions brought 0.02 cent on the dollar.

Lower valuations would lead to new writedowns and capital injections from the $134.5 billion remaining in the Troubled Asset Relief Program, Nobel Prize-winning economist Joseph Stiglitz said.”

Grammar

hehehehe- Yes I don't check back my grammar, my blog is on the fly :) Hehehehe

See I think too fast for my fingers to type so you have to decipher stuff:) if the words don't match :)


Anyways I have a new project working on, it is a time machine that I will use to go back in time and play the markets and lotto numbers from the future :)
That's my goal now- Time machine, I can't seem to locate the flux capacitor, if anyone has one I will pay alot for it :)

Have a great weekend

TRADE CALLS:

Hey just want to be very clear here I am in all the trades listed on the open play section on the blog and only those. I didn't take SRS as the market opened today as one of my rules is not to buy a stock when it gaps up and it did so I was waited and good thing because I got it @$40 with 1/2 lot.
Well I am definitely wrong here on the financials. I really thought the financials would have sold hard after the mark to market announcement but I am holding my guns here and think it will work, giving it a little room.
I will be neutral here till we touch that 850 area then I will be short or be a buyer @ 750. There is a good short we consolidate in this around for a couple of weeks. Who knows when this chop will be over but seems like the volume is dropping off day by day, which means we are almost at an end.
This morning I said I think we will make one more high before we head south but I dont think the south will be close to that 665 level.

Trade Call Update

AZO finally getting cracked- Took long enough - Lets see if they can close this below 154 today

Thoughts

I think we make one more new highs here before we head below 800 again on the S&P. Maybe tomorrow or Monday we make a marginal high and send us to 850 area which I think is the top of this current range.
If you are long I would be lightening up right here and now.

MARKETJEDI

TRADE CALL: SRS LONG

Taking a stab here tomorrow on SRS long.
I will play the stock straight out but the April $48 calls (SRS DV) don't look that bad.

We will see how that works out

Another problem

Another problem for the bulls here is the very weak volume. We constantly get divergences on the upside everyday but we continue to grind up on lower volume. This is very hard to decipher but I am thinking the bears want higher prices so they can short easy and secondly the BS news out of treasury etc is making weak hands buy.
Now I must say this here and now I do expect us to make it to 1000 on the S&P this year but between 1000-1080 will be the top just not on this go.
Take that for what is is worth, you all know I think we will see DOW 5000 before all is said and done

Folks

I am getting alot of emails about what the market is doing. Guys this is very unusual times, market is edgy and basically moving on political news and decisions. For example we are up today on mark to market, G20 and nothing about technicals of companies or the market. All you can do is stay out or just see a set up and take it with your necessary risk rewards.
I have been trading for years and this is by far the most difficult environment I have ever seen. You will see many analyst and managers come on and say the same thing because honestly it is.
The good thing is this wont last much longer, so just relax and regroup. As I would say the markets aren't closing tomorrow forever there will be tons of other opportunities.


I have one good description of this market- PINBALL MACHINE :)


MARKETJEDI

New guidance for Mark to Market

So another scam to prop up the market. I want to puke really do, this is just crazy they trying to save the banks at all cost at our expense.

When will the madness stop.

Thursday-Mark to market

Tomorrow morning is the vote on mark to market accounting. This will be very important as it was be the catalyst for the markets till be get earnings season in high gear. I am so anxious to see what the decision is and also what the market will do. Again this is just fooling with the issues and not dealing with them but hey we have no powers as regular citizens so we are at their mercy.
I hope we rally so we can get on with it and hit some serious resistance. It is minutes to midnight and the futures are up lot and I think it is in anticipation of the mark to market. Lets just get a rally so we can get everyone happy so we can short. If we rally and sell off tomorrow it will prove once again that we are in sell the news mode and I would think we try to break that 770 area on this pullback. I dont think we crash and burn but we would get a significant pullback.

MARKETJEDI

Story here

The story here is do we see 850 first or 750. We are narrowly in a range and I think these are the two numbers in place. I think the most important number is 770 for the bulls to hold and the bears to keep the bulls below 824, but either way we are trapped right now in a range.
If and I say if I were a betting man I would be betting we sell off on that mark to market news and head to that 750 level but again I am not a betting man. I rather sit by the sidelines and see what happens as there is too much indecisive action as of late.
Which there was more to say but sometimes that's all the market has "NOTHING"


MARKETJEDI

CHOP CHOP and CHOP

What a way to start the month!! The same way we ended the last!! Pure chop, early morning we looked like disaster and BANG we turned around and grinded higher.
Most are saying they are buying up financials ahead of tomorrow's mark to market decision. Who knows what they will do but I think we will sell the news as usual.
Non of the plans are going to work, that's the truth. Did anyone see what is happening with the protestors at the G20, hmmm said it the Europeans aren't putting up with this crap like us.
Man I hope I am wrong and I mean really wrong but non of these plans are going to work, there is no simple fix. This $6 trillion or whatever it is in bad debt on the book of these banks wont disappear. Someone has to take the hit period.
We will see what happens tomorrow and over the weekend about the G20

Roubini Video

Job losses increase

Wednesday, April 1, 2009
ADP Job Losses Awful, Doesn't Yet Include the Failure of GM, Chrysler

“The weakness in the labor market is deep and broad and means the recession really could last through the end of this year.” -Steve Cochrane

ADP Says U.S. Companies Reduced Payrolls by 742,000 in March: “Companies in the U.S. cut an estimated 742,000 workers in March, pointing to no relief in sight for the labor market amid the longest recession in seven decades, a private report based on payroll data showed today.

The drop in the ADP Employer Services gauge was larger than economists forecast and followed a revised cut of 706,000 for the prior month.

Companies are slashing staff as tight credit conditions and shrinking household wealth cause sales to shrink. The Labor Department may report in two days that employers cut payrolls in March for a 15th consecutive month, putting jobs losses in the current downturn at more than 5 million, according to a Bloomberg survey.

FN: This is bad. But it will only get worse. These numbers don’t yet include the implosion of both GM and Chrysler and the knock on effects of that on down the supply chain. Job losses will continue to come in at horrific levels for months to come.