iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,396 Blog Posts

An Egregious Day for the Bears

Another 400 point rally. This is getting ridiculous. Over the last 6 months, both long and shorts have been whipsawed, by the ungodly turbulence. However, I must admit, as of late, the bulls seem to have the upper hand.

Naturally, lots of bad stuff can happen, such as egregious job loss or more earnings misses. However, it’s hard to ignore a market that just-won’t-die.

On the other hand, much of today’s rally is attributed to a new breed of short seller, via inverse ETF. Unlike old school bearshitters, the new bear is quick to cover and has little to no conviction. As a result, the market tends to rip off the heads of those who bet against it, whenever there is good news.

Going forward, I expect the market will make a lower high, at around 12,500.

But, maybe, just maybe, seasonality will allow for an extended rally, until May. If so, you’re going to want to get long some food and beverage names or tech.

For the day, I lost a massive 4.1%. However, I’ll have you know, my YTD gains are still more than 30%—so fuck off.

Off to drink myself stupid.

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30 comments

  1. Yeshua

    Well fuck me.

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  2. JakeGint

    Yeah ^ that’s hilarious.

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  3. Kiwin

    Has this commodity bull run been caused by people buying up the commodities because of fears of inflation and not inflation itself?

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  4. Q4

    When the bullets start flying, people get to running…

    Blutiful

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  5. Q4

    Towards the close I reloaded. Doubled up (puts on OIH stocks). The Fed cut won’t lower mortgage rates anytime soon. The core problem of home values and buying demand will not increase overnight. On top of that, lending guidelines will be tighter. Once home values decrease to meet an increasing demand, I will consider the market turn around. See you at the bar.

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  6. Mac

    Anyone else find it amazing that volume fell today on the Dow and S&P 500. I find that ominous for the bulls – if this was legit action today, volume should have exploded as well.

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  7. JakeGint

    It fell from what? Yesterday? Over 5 billion traded today on the NYSE.

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  8. Juice

    Don’t fuck with the good ole USofA. Today they employed the old market tactic, schlock and awe, on overconfident ursines.

    You didn’t think they’d roll over & play dead because of minor details like financial insolvencies or inflation.

    I think what really forced the PPT’s hand was the US being ranked Number Two.

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  9. Juice

    Sheriff Spitzer’s entrapment paved the way for an egregiously timely purchase of BSC puts & today’s subsequent rally.

    We Need a New Sheriff
    By Steven Smith
    Director and Chief Strategist, Options Alerts
    3/18/2008 4:08 PM EDT
    URL: http://www.thestreet.com/p/rmoney/stevensmithblog/10408372.html

    The outrage over the Bear Stearns (BSC) situation just keeps coming. The fact that the Fed crossed the line bailing out the firm, but left shareholders hanging out to dry with huge losses is creating incredible anger and comparisons of Bernanke and the Fed to Skilling and the Enron gang.

    But there is another area of disgust that involves the options activity discussed in this article that preceded Bear’s demise.

    As one reader vented “This is obviously insider trading. I’d personally like to know what is going to be done about it? I’m sure a net profit of $51 million is something that the SEC shouldn’t overlook. Although I’m sure they’d rather get Martha Stewart on insider trading for $2 million.”

    What’s going to be done? Nothing. There still has not been any acknowledgment that anything was amiss ahead of WellPoint (WLP) earnings warnings two weeks ago. At the time, I wrote about the fact that thousands of puts were purchased in the last 15 minutes of trading prior the earnings warning.

    That $5 million gain may seem like small potatoes to the $50 to $70 million made on the BSC puts, but the WellPoint trade was probably just one or two individuals acting on insider information and should be easy to track.

    On the other hand, it won’t be that easy for the SEC to find proof that some rival investment banks or group of hedge funds conspired to short BSC and then pull the rug out from under them by refusing to be counterparties, and pulling their accounts would be trying to grab a handful of fog.

    I think the real shame, and some blame, lies with the exchanges and regulators. In this environment where investors have so little confidence in the financial system, instead of issuing the boilerplate statement that they will “review all unusual option activity,” they need to take a much more aggressive stance and acknowledge some activity, especially in WellPoint, was probably based on insider information, and that they will track, prosecute the parties involved.

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  10. TraderRenn

    Charting The Banking Crisis – A Boomerang Demo

    cool flash graph – a picture tells…
    http://and-still-i-persist.com/2008/03/12/charting-the-banking-crisis-a-boomerang-demo/#more-862

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  11. Breakfast Meat

    Off to drink myself stupid.

    You don’t need drink for that.

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  12. calvino

    Strike your colors boys – they priced Visa above range.

    update.. fuck the beard..the clowns.. the bearded clown..fick fido and the reits peeling loans to pay divies and rising.. i’m going to chill on the other side of the world, where clowns are verbotten.

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  13. Does Cramer have his fingers up the ass of that bull?

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  14. JakeGint

    Calvin – what’s the new symbol?

    Trader Renn — did you note that the link you posted contained the same Boomerang chart, twice?

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  15. calvino

    V is the symbol, not that the greedy grubs deserve any association with the First Lord of the Admiralty.. rubbing salt in the wound to add insult to injury.

    btw.. anyone care to venture as to why the american peso went up today. it rhymes with Gary.

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  16. JakeGint

    Barry?

    Barry Gibb was buying dollars??

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  17. JakeGint

    You mean the BOJ trying to crush the yen down again, don’t you?

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  18. calvino

    Look which currencies went up and which went down vs the dollar today. Meet the new carry. welcome to a twenty year recession, according to precedent.

    up on the bonsai and down to the kiwi.. see it?

    .. alrighty, I am saying it.. the bearded clam-clown is actually following the BOJ and displacing them in pursuing the worst monetary policy that a central bank can invent.

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  19. Tim H

    I see these comments about market gains attributed to covering rather than buying. What short term (hours, days) indicators can tell me when bearshitters are covering?

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  20. Q4

    So when is the Fed going to start buying mortgage-backed bonds instead of financing the purchases of these bonds?

    Bizarro world. You fuck up, we’ll give you more money and don’t worry we’ll bail you out if it hits the fan again. I’m not sure, but what does the United States Gov. balance sheet look like? $500 billion or so? Can they afford to bail out everybody if the estimates of a couple trillion dollars does hang over us?

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  21. Woodshedder

    Tim H, when the shittiest of the shitty stocks go up the most, it is short covering. When the stocks that are oversold the most, for the longest (use RSI for this) go up more than others, it is short covering.

    Don’t make the mistake of thinking that all of a sudden a turd isn’t a turd. It still is. However, there are a lot of turds that will get polished up over the next few weeks.

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  22. cuervoslaugh

    Q4:

    The problem is not a case of “you f-up and we’ll give you more money” it’s a case of “if we let you f-up, you’ll cause the whole stinkin’ house of cards to unwind”

    It’s a bizarro world alright. Been that way since the 80’s when folks started using derivatives and SIVs etc.

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  23. ottnott

    My new trading strategy:
    1) load up on puts, double-inverse ETFs, etc.
    2) poke a major banker’s ass with a pin, causing banker to utter a loud “ouch”
    3) the market hears the sound and drops 300 points over 4 days
    4) I jab a pin in a major banker’s ass and leave it there, causing the banker to squeal in pain
    5) the market drops another 300 points in 1-2 days and I switch over to calls and double-longs
    6) The banker’s pals, now confused by the squealing and worried about making the payments on their second boats, begin a chorus of squeals
    7) Bernanke hears the squealing, whips out his academic treatise on responses to financial panics, checks the items on the next level of response outlined in the treatise, and loads his helicopter up with goodies for the banks and brokerages.

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  24. Q4

    Cuervo:

    This is a bizarro blog. I think they encourage vulgarities and profanity. Fuck, shit, cunt, motherfucker. I think it “is” the case of the Fed providing more capital to the “we fucked up” markets. TAF, facilitating the bail-out of BSC through JPM (the law that allows this has only been used once before), creating and financing a market for these devalued “AAA” securitized bonds (SIVs,CDOs, CDO squareds, etc.) etc. Agreed on your statement, but isn’t that one in the same? In order to prevent the “house of cards” from unwinding they are propping the house up by just adding more cards. Providing liquidity to illiquid markets.

    Fuck it, bank to banking coin.

    Juice:

    Know thy rules of the game. It’s bullshit alright, but as the saying goes “if you’re not inside, you’re outside”.

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  25. calvino

    Juice – interesting coincidence. I’m still trying to learn the new Guv’s name but I’m sure he’s going to see the investigation through to its conclusion.

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  26. JakeGint

    OTT’s – your stuff is not falling on deaf ears.

    Consistently hilarious.

    You should do a PG on your holdings…

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  27. Positively Geared
    Positively Geared

    C’mon fellas, you had to have seen this coming. I’m only an ameteur , but this was the way I read it. The S&P, Dow and Nasdaq all tested support the previous day, held and closed at said important support levels.
    BSC had been pinched by JPM and the Fed (which could have/should have) sent the markets into a tail spin had it not been for the impending FOMC meeting were Uncle Ben has sent a clear message over the last few months, that he’s the “go to man” when everythig is fucked. By that I mean, he’ll cut rates and hand out money like a drunken leprichaun on St Pats day.
    I did have the courage of my convictions too. I bought a load of index call warrants at lunch yesterday when we were at our support levels.

    Having said the above though, I’ll certainly be cashing out of those contracts during the day as we’re lible to see red again tomorrow. I don’t see a strong follow through day coming, just some sideways or downward action.

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  28. calvino

    I’m buying Barry Gibb’s dollars nonetheless. calvino buy four Barry Gibb dollars.

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  29. Positively Geared
    Positively Geared

    Rules broken… am haning on to my calls for one more day. I expect *hope* that the VISA IPO will facilitate another decent day for you guys (however erroneous any rise in stock prices is at the moment).
    We opened strong and have spent the day slowly fading back, despite strong earnings reports from local heavyweights such as China Mobile (0941.hk) and some property companies.
    I tested retail investor sentiment using my own patented system and they’re still staying away from this market, so one mroe green day is about as good as I can hope for.

    *My patented system for determining retail inv sentiment, is to check my local computer share outlet. Whenever a hot tip is flying around the local chinese investors, or they’ve turned bullish/bearish, they’re lined up out the door. Walking past at lunch time today, told a grim story. But I consoled myself with my rich mans Starbucks and studied the horse form guide for the Happey Valley races tonight 🙂

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  30. isabella mori

    Oh hell yes…. this is what I needed today. I fucking love your page, it makes me laugh every time I come here.

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