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.

With the dollar strengthening, gold dropping and stocks exploding to the upside, I will not throw anymore retarded shorts on the barbie.

For the moment, everything is in the bulls’ favor, with the marked exception of Cramer disseminating more egregious rumors—this time regarding [[FNM]].

Nonetheless, it makes sense to go eat a ham sandwich or go bowling, instead of fixating on today’s tape.

By the way, with the GSE market normalizing, [[CMO]], [[NLY]], [[ANH]] and [[MFA]] are rallying.

Finally, it’s worth noting, overzealous investors get the proverbial knife to the chest treatment often. It’s going to be a long year, with loads of developments. Be patient and make your next move moderately.

NOTE: Oil is bucking the trend here, up on the day, while other commodities trade lower. Frankly, I don’t know what to think of it. If you want to short crude itself, sell [[USO]] or buy [[DCR]].

I bought 2,000 [[SRS]] @ $107.89 and 3,000 [[SMN]] @ $39.27.

Disclaimer: If you buy the above stock because of this post, Bernanke will cut rates by 200 bps. And, you may lose money.

Usually, prior to a Fed decision meeting, the markets flatline. However, as you can see, optimism, coupled with good earnings at [[LEH]] and [[GS]], is catapulting stocks higher.

The conundrum: “is the rate cut already priced in”?

For the day at least, I believe there is 200 points of foamed mouth upside, with 400 points of downside. Incredible volatility makes everyone nervous.

So, with those odds (at least in my head), I will take a shot and short stock, up at these levels.

No matter what the Fed does, DO NOT execute any trades, until 3:15, unless you’re into gambling. It’s okay to do something prior to the meeting. However, immediately following, often times there is a lot of misdirection at play.

With my money, I am buying [[SMN]], [[SRS]] and [[DGP]].

Pardon me, I’ve been in meetings all morning. I come back, much to my chagrin, the market is up like a thousand points. What the fuck?

Taking a quick look, I can see [[GS]] and [[LEH]] posted good numbers. However, it’s worth noting, LEH lost 5 billion dollars under management for the quarter. Nonetheless, both stocks are off to the races. I will not touch them.

What really perplexes me is the fantastic run in [[BSC]]. I mean, isn’t that bitch going out at 2 bucks? Something isn’t right. Right off the bat, my default reaction says people are gambling fools.

In general, the market is gapping higher, thanks to a short squeeze. My guess, once the Fed announced their decision, we will sell off.

However, should that fucker really lose his mind and cut by 1%, there is a remote chance the market will close up 500 points plus. So, whatever you have in mind, be careful.

My approach is to wait out the rally, then pounce on a few of my favorite losers, like short [[FED]] or long [[SMN]] and [[SRS]].

In short, playing the market requires patience and conviction. It’s very easy to get scared one way or another. Luckily for “The Fly,” he drives a plutonium powered time machine.

[[GS]] will get what they deserve.

[youtube:http://www.youtube.com/watch?v=JePJNCrxpcY 450 300]

Go ahead, keep on buying. As far as I’m concerned, today was a very bad day for the bulls. We need a flush-out. This was not that.

Erroneously, the asshats in charge were propping stocks higher, as if it will stop the melt down. It will not.

The crisis is in full motion and it’s too late to stop it. I compare it to a runaway train, with no brakes, heading for a dynamite factory. An egregious train track blueprint, indeed.

Tomorrow, I suspect the buyers will claim, ad nauseam, that today was the bottom—thanks to a high vix reading.

Look, I’m not saying we are heading for total collapse. All I’m suggesting is the financial crisis is far from over.

Despite today’s Dow run, “The Fly” was up 2.66% on the day.

Top pick: Short [[MOS]]

Stolen from: Barry

Wow, talk about spinning his [[BSC]] comments to his favor.

He’s been recommending purchase of BSC since $95, immediately following the Fed’s 75 bps cut. He was so far out there, vehemently recommending BSC: he even suggested that foreign bankers would be burning the mid-night oil—trying to outbid one another for Bear’s assets.

Now, in a shameless denial, Cramer is saying he suggested to “keep your money” at Bear, not the stock—but the firm itself.

Come on Jim. You have to be kidding me.

The main concern was not the guarantee of assets at Bear, but the stock price itself. I mean, I’m sure some people were concerned and started pulling money out. But, generally, people ask Jim for stock advice—not solvency issues.

It appears, someone is scared of that Drudge headline.

Believe me, Wall Streeters are hurting today. May of my colleagues keep a large part of their life savings in the company’s stock they are loyally employed to. Look around, from [[MS]] down to [[TWPG]], it’s carnage.

This, as you know, serves a severe psychological blow to the managers of assets, those who balance risk for pension funds and retirement accounts.

So, what sector will get hit next?

I can tell you, with a high degree of certainty, the ag plays will get their comeuppance. With portfolio’s getting annihilated, across the globe, managers will sell their up stocks, in order to raise cash and take a breather.

As you already know, my largest position is [[SMN]], which gets you short [[MON]] and other basic resource plays. However, I also have short positions in a variety of single stocks, like [[MOS]] and [[POT]].

Personally, I’d like to see the whole house of cards fall. The ag story is over saturated and full of excess. Every loser with a series 7 has been piling into the sector, a key tell of a top.

Fuck all the demand from China and India. At the end of the day, the stock market is about survival. When shits gets blown up, like [[FCSX]], [[IBKR]], [[NCC]], [[MF]], [[GFIG]], [[MGT]], [[PNSN]], [[KCE]], [[CIT]] and [[LEH]], everything is for sale.