BYE BYE FINANCIALS

I now fully believe the market has enough of a catalyst to test the lows and maybe make new ones. There will be more hedge fund blowups on the horizon in my opinion. When a major investment bank (BSC) says basically that they are out of business it doesn't bode well for market confidence. Rumors are around today that UBS will announce more bad news and rumors that (CYN) City National may halt dividend and is facing a near term liquidity crisis. Stay tuned. Will the Fed come to the rescue and just buy all the bad debt?
How about the President of BSC saying things were ok with CNBC the other day? Can we trust anything in here? Do you want to be long finacials in here? He said liquidity was just fine. How come I heard European banks were not taking Bear Stearns business on Tuesday and Alan Schwartz the President didn't know.?Give me a break.

BEARS STERNS IN MEGA TROUBLE

Told you guys we are in trouble. Bears Sterns news just out of the FED RESERVE lending them monies for 28 days because they are in a liquidity crisis. What does that mean! Means they are in bankruptcy on their balance sheet. Lets see what happens in a few, will update..

CPI: Have the bulls returned

Some mildness was reported in the CPI but many are questioning the numbers as it showed decrease in gas prices which raised some suspicion in the number itself. As I have been saying I would love us to rally to the 1378-1400 area on the S&P so I can short and sit back as I do believe the path of least resistance is down. If we do get a lift today next week alot of shorts might cover into options expiration.
I think they are still trying to save the investment banks but who knows how much it will do.
Will be back after the open

Totally news driven

Today was a prime example of a news driven market. The market are looking for any news via the fed, mortgage derivative, hedgie etc to trade on. It almost seem too fake how we just trading off news in a hope of a rally or a crash. Here today I have to give it up to the bulls as the overnight lows didn't make a big impact on the final numbers. Tech, bios and agro stocks seem to have found some buying or short covering from the open to pan out a gain.
Well good to know Standard and Poors are on top of the market as usual. They claimed today that most of the bank write offs are coming to an end and we should be out of the woods soon. Well I have so much faint that I had my $5 in Enron when Standard and Poors said they were AAA rated, PLEASE lets be real here. Folks at Standard & Poors are a bunch of idiots and we will see soon enough if we are near the end.
Do you really think the Carlyle group is the only hedge fund out there that is using 32:1 leverage and got burnt. I think not but we will see soon enough.
Right here I am taking it easy as the FED action thru a money wrench in the setups i was looking at.
Remember next week is option expiration week and we should get some nice movements monday and tuesday. I am definitely not trading next friday as I haven't been having too much luck on options expiration days.

When will they get it!!!!!!!!

Carlyle Capital margin call, Bear Sterns lost of confidence, bad retail numbers and news of 20% job cuts on Wall Street, YEN is now at its highest level in 13 yrs are some of the news that are pounding us this morning. The news is nowhere good and that's why I am a perma bear long term. Yes we will get the bear market rallies but come on we heading lower much lower.
In the next few months most stocks will have made 52 weeks lows and many will make multi year lows. The FED is powerless against this spiral and SHOULD not try and help the markets as bear markets and recessions are a natural process of cleansing, just like we have natural disasters such as hurricane which are nature cleansing phenomenons.
Well for today we will see how far the gap us down. I would love ot see a huge gap down in certain stocks so I can play the bounce for the day but today if we dont bounce hard enough the bears might take it to the bulls and drive us way down.
I will be watching the financials closely today for reaction. Expect a big spike in SKF, wish I had step back into that play, oh well! that's how it goes.

Good luck

Rumors on BSC

Got some rumor news just now of Bear Sterns being on companies don't answer list. I dont know if it is true but this might have explained the CEO coming and CNBC today and the subsequent sell off throught the day. Financials are dead here and I dont expect them to be at a bottom till be here of some really bad news of one of the big financials being in a cash crunch or one of them being taken over.
Lets face it if the investment banks are in dire shape imagine the hedge funds who took the same leverage trades and didn't hedge. We might be in a world of trouble here. Today's action plus this rumor tonight makes the investment banks and FNM playable short on any gap ups.
They are officially on play as day trade as shorts only when they gap up.

Plan for Wednesday

Without going into too much details I only have one question? Where are the bulls. Although i expected a dull day I expected us to at least end marginally positive to show some face for the bulls. Yet again I think smart money is setting up to sell their holdings on an move higher. Bear Sterns, Fannie Mae, Google all were up initially off the open then bam they continued to sell.

For tomorrow I am giving a heads up. I am shorting AMZN and GOOGLE. AMZN I will do as a long term play with about $5 profit target. For Google I will be looking to short it below a 10 AM low as a day trade. I bought some USO puts right before the close which expired next week and if we get some bearish numbers tomorrow off the inventory numbers I will take some profits on it or ride them out till next week. I bought 4 contracts and willing to risk all on the play.

One other short to look at tomorrow is SLB, been trading terribly but I would wait for a 10 AM low here to make a trigger.

Talk to you tomorrow.