Wow! Let me try to explain how I see things and what I did.
This is not normal trading behavior. The death of [[BSC]] is not supposed to start a mind boggling rally in financials. I think [[JPM]] was up 24% for the week.
During the week, we saw a big decline in commodities. For the bulls, this is a very good development. If it holds, it will help improve margins from restaurants to trannies—down to the bagel operators: [[BAGL]].
However, over the last 6 months, the way to play spikes is to fade them. I see no reason to alter this course of action, despite what Dick Bove has to say.
Going into today, I had zero exposure to [[SKF]] and very little in [[SRS]]. However, after today’s monster move, I felt comfortable buying both, betting investors will take profits, early next week.
My guess, the window dressing maniacs will not want to show financial holdings on their sheets.
As for the market:
It is possible we can run up to 12,500 or 12,750. But, calling a bottom is fucking absurd.
Remember, those who think this is the bottom believe the market will be down less than 10% this year. Do you really believe the market, considering all the fucked news, will be down less than 10% for the year?
Come on!
For the day, I lost 1.8%, which is nothing. I spit on minor losses.
Towards the end of the day, I redoubled my shorting efforts in [[LEH]], at 49.
And, I covered some of my [[MOS]] short, in order to raise cash for LEH and other things.
Have a great easter, fuckface.
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Goddammit I love this site.
merry fucking easter to you all.
Bill Fleckenstein Daily Rap-up:
Volatility vs. Random Noise
After I left yesterday, stocks were obviously pounded and the rout continued in precious metals. Overnight there was more weakness in our equity futures, though about an hour before the opening, they were positive to the tune of 0.5%. But it wasn’t too long after the opening that they were once again mildly negative.
Bulls Don’t Take the FedEx Package
Of course, the economic news continues to deteriorate, as unemployment claims spiked up. Also, FedEx announced that next quarter would be a bit worse, due to the economy growing “more slowly” than last year, and rising oil prices.
By midday, which was when I had to leave, the market was up about 1% across the board, as folks were back to celebrating. That, even as CIT Financial was halted, with the stock down 30%-plus. Obviously, folks decided that our problems were behind us. As I have said repeatedly, nothing could be further from the truth, but that was not this morning’s business.
Away from stocks (as of midday), the xera continued its violent rally from yesterday, with commodity currencies especially under pressure, as well as commodities themselves. Oil dropped $3 before bouncing. Gold quickly tanked another 3%, and silver twice as much — as they appear to have been impacted by the deleveraging in many parts of the world. Treasurys are the only speculative instrument that has not been affected, as they continue to remain firm.
Now for some thoughts on the market action. It’s my belief (shared by other people I talk to, whose views I respect) that the volatility — and, more importantly, the noise level in that volatility — are essentially “unmanageable.” What makes this so is not the volatility per se but its apparently random nature.
That may seem like a fine distinction. But for those of us who manage money for a living, a lot of times even when the market action is wild, it “makes sense” — versus the last couple weeks, when it’s been somewhat unanalyzable and the level of treacherousness is off the Richter scale.
Consequently, over the course of the last couple weeks, I have been reducing my positions in nearly everything. I feel a bit sheepish about doing so, but now I find that others I respect have acted similarly. My reason for bringing this up is to note that sometimes doing nothing is okay. It’s not a requirement that one be active at all times, even if one has a strongly held long-term view.
Now having said that, we might be nearing the end of the random-noise segment of this period, and approaching the moment in time when ferreting out the signals may be possible. I suspect it won’t be long before preannouncements begin hitting en masse — wherein the balance sheets, income statements, and guidance are liable to provide sources of bad news.
“Now having said that, we might be nearing the end of the random-noise segment of this period, and approaching the moment in time when ferreting out the signals may be possible. I suspect it won’t be long before preannouncements begin hitting en masse — wherein the balance sheets, income statements, and guidance are liable to provide sources of bad news.”
^sounds right to me.
Who the Fleck is “Fleck”?!?
I’m old and have been kicked down many fucking staircases in my life. That has knocked a few screws loose and turned me into a disabled cripple. But it also makes me overly qualified to declare the credit crisis over.
I urge you to exercise your right to buy bank stocks at “once in a generation” lows. Make yourself rich, goddammit.
If it doesn’t work out, don’t even think about kicking me down more stairs. I’m too old for that shit anymore.
Mr… John… John… Cock..tose..ten…
I wanna know why you’re not adding FXP here.
The market will be resurrected to new highs starting on Monday.
Coincidentally odd, no?
Because it can go to $85.
We Chinee ah sick oh yo jokes. Stop buying FXP, fluckkah Jake. No moah oh dis. Dats it. FXI tlu da loof!
LOL @ Jake w/ the Fletch reference
This market is nuts, people just gamble that something abd won’t happen… The only sense it might make having the banks rally, is less competition, but that’s really not even the case… I bought SKF today as well, but at like 109.5… Might pick some up Monday if it opens down or trades down…
It’s like LEhman somehow deserves 80% gains for having a “not horrendous” quarter. I just don’t get it. I maybe understand if they think the fed’s done, and everything will be fine now… But balance sheets are horrible, banks got subprime slop, and the fed wouldn’t have taken so much action if it wasn’t an absolute wreck, more so than anyone realizes…
All the april options in MER tell me that MER is probably next, and what then? Where was the panic when BSC went for $2! Instead it starts rallying….
Then Visa pumps some money into SOME banks, but that does not just heal the sickness overnight…. Banks are going down before this is over
lol by the way, I’m getting dow futures up 902%… your things glitched out saying it’s up 10,000 points
Stop using profanity when talking about Easter, you walrus fuckers.
Or I summon locusts and whatnot.
INRI to my peeps!
Have a Good Friday dog breath.
That’s Mr. Dog Breath to you, Breakfast Sausage.
There’s a reason the market is closed on Good Friday, you heathenish hatfuckers.
Take heed.
So are you out of FXP then?
I’m telling you selling the ridiculously expensive calls is more fruitful.
Fly, if you see possible 85 on FXP what do you see for SKF,SRS and SMN?
Have a nice long weekend and thanks for all of your hard work (input).
Granpa,
I see dead people… (bears)
May I also say there are some crazy people out there buying large into a long weekend in a bear market. Absolutely certifiable low-IQ types.
LEH up 150% since Monday noon. Logical right? I am sure the people that caught that move are saying hey it can go 150 % higher right?
Short LEH long GS.
Do you know what the fuck you are doing?
Yesterday, you posted “Lights Out for the Bulls”.
Then 24 hours and 3 minutes later you post “Lights Out for the Bears”.
WTF????
I will have my peon bankers call in your sub-prime loan if you persist with this asshattery.
Have you noticed that Stanford is doing well with a bunch of white guys?
Even the black guys look white.
I took Cornell in one of my pools. you go to the tourny once in 20 years and you’re going to fuck it up in the first round? Let’s Go Big Red!
haha
Mr. Alphadawgg- The reference to the color of the Stanford players leads me to send my friend Rev. Wright over to your abode in order to have a discussion about race relations in the USAKKK. My grandmother will be carrying his Bible. The chickens will come home to roost for Stanford.
Big Red getting mudstomped.
I was dissing Alphadawg for picking KY to go all the way, and all along it was Ragin.
Check this shit out… and this guy has his own TAB??
Cramer talking about uptick rule… since uptick rules been so effective, and he’s scaring people with talks about how odds are against you, and how you must contact your broker…
That and cramer telling people to stay away from banks means maybe it’s time to lighten up on the shorts, and add in a few longs.
/rant on
Am I the only noobian that believes this whole ag sell off was due to the Barron’s effect? The email read “Fertilizer Stocks Could Turn Poisonous” on Tuesday night. Wednesday the ag’s sold off. This is no balloon popping, only a correction imo. Then the whole needing to raise cash bs. The selloff came the day after a 450 point move up. Hedge funds had just made good money on fed day.
./rant off
Happy Easter everyone 😀
The Fly:
One Day you say lights out for bulls, the next you say lights out for bears. You only say it at the end of day, AFTER the facts. That doesn’t seem to be very smart. If you said lights out for bears at the end of yesterday, and said lights out for bulls at the end of day today, then you might be up to something. But you seem to be a historian only.
In my view the commodity sell of as well as financial rally is nothing but inherit market volatility. Such volatility is ineritable when too much money chases too little assets.
Any thought on PAL/SWC, and the PGM sell off?
BTW did you give it all back today the 8% you gained yesterday?
JJ,
Read the post, he was down 1.8 percent today.
…
JJ,
I made money on SWC short today. Loved the 50% market on close sell imbalance. Thanks. And PAL? Been short since the high 8s. Beautiful.
Meanwhile, JJ, you should seriously consider pulling all your money ($34.56) out of the losers SWC and PAL and instead dump it in HCBK.
-DT
A friend of mine works at HWAY. He told me that they are trying to cut costs like crazy. They just did a company wide blackberry surrender, where all blackberries for non mission critical positions were turned in and shut off.
I’m wondering if this is an indicator that RIMM might be facing challenges should other companies follow suit.
Blackberry jam? Ha!
2/27/08: thoughts
http://www.foxnews.com/story/0,2933,333350,00.html
We’ve had a lot of school shootings, mall shootings, apartment type shootings lately. People at the bottom of the pyramid are losing their jobs and their houses, and the youth of America is outraged and depressed. Small business owners and professionals I know are having slow 2008’s. The savings rate in this country is the worst it’s been, ever, and it is (roughly) inversely correlated to the rate at which credit grew after the dollar was unpegged from gold.
George Soros believes we are at the end of a “super cycle” of inappropriate growth which began 60 years ago, and which has contained smaller bubbles/busts.
Oh, and the cost of food is about to go up. FUCK. More civil unrest to come.
Oh, and Dubai/China sure seem happy to invest. The white man has been the asshole of the world for centuries. Revenge is a dish best served when you have them bent over. We’re bending.
We have a bunch of people becoming old. Old people require expensive life extending medical care. What the fuck is going to pay for this?
Oh, and a shitload of religions around the world believe that we are either in the end of days, or about to fight some big ass biblical Christians/Zionists vs. Islam” war. (Bushy’s fundamentalist christian homies vs. islamic fundamentalist homies). Bush even said that God told him to invade Iraq. http://www.independent.co.uk/news/world/americas/bush-god-told-me-to-invade-iraq-509925.html
These old money fuckers are going to get us all killed.
3/20/08: Update
http://www.cnbc.com/id/23728565
and
http://biz.yahoo.com/ap/080320/us_foreign_investment.html?.v=4
So our gov’t has reached an agreement with the arabs, that could be good or bad depending on the deal they cut. So does the fed bail the big banks out? and the market decides it’s a bottom for the next little while because the system isnt allowed to fail? Ok but then we still have the what ifs and the other variables. what if something else in the system fails? The ARC/APS issue is still out there, and issuers are restructuring the notes in their closed end funds. Retail ARC/APS holders are still in limbo and that has to be dealt with one way or another before potential lawsuits. Or what about global growth slowdown (chiner, indier contracting and huge unemployment looming) – completely aside from our banking problems? What about weak dollar? What about inflation creeping up and no ability to raise interest rates b/c of continuing credit probs? Isnt that stagflation? Ok so what is the catalyst up again? I think this is a point in our history when the FED/GOV takes ownership of a lot of wall street and consumer debt (including global debt), slapping guarantees on everything in exchange for the ability to collect massive amounts of interest on that debt – and via the various agencies – have the ability to collect on that debt better than any other creditor. It’s that or lose your 401(k) that you worked your whole life for via market failure. Just like JPM did to BSC, total jack move.
What do you think of THAT?
Once again FLY…you are THE contrary indicator. The tides have turned. Bad news, and I am sure there is more to come, will be laughed at and bought. If you increase your short bet you will be eating at MCD for a while.
Sold shorts….long for long time.
I’m up 40% YTD. Fuck off.
The United States hit the end of the 224 year political cycle in 1999 from its revolutionary beggining in 1775.29863. Martin Armstrong predicted in Oct.1999 that Sept/Oct 2001 would see an attack on the USA! He in effect predicted the 9/11 disaster and also predicted the reaction to it further on, which would be a new war. “The turning points following 1999 now appear to be Sept/Oct 2001 on the quarter cycle and late 2003. These targets often work in an attack followed by a response.”
Mr. Armstrong went on to say that Americans could expect to see their liberties being stripped away from them after 1999 as the government would attempt to shore up its waning power and war would increase. He said the the power of the USA peaked in 1999, just as it did for the Roman Empire after the death of one of Rome’s most brilliant Emperors Marcus Aurelius in 180 AD.
Armstrong was imprisoned on 1/14/00 (‘accidentally’ the day of the inflation-adjusted high of the Dow Jones…) after he refused to cooperate with the CIA, and was kept in prison for many years without charges being pressed (which is against the laws).
via
http://princetoneconomics.blogspot.com
Fly,
I remember last year you were up big and gave a lot back… what are your plans this year to avoid that? I’m not being a dick, I’m just wondering if you have some strategy to avoid a massive giveback.
Cash? The PGM supercycle? What?
-DT
There are only two pieces of palladium left on the planet, and jj owns all five of them.
S&P Downgrades Goldman Sachs (GS) And Lehman (LEH)
Damn Fly, Can I please have one ride in your time machine?
Last year I got lazy.
This year I am focused like a nuclear powered bicycle in the middle of a laser farm.
Thanks to the time machine, Fly has years of experience beginning with his days riding the nuclear powered tricycle.