Friday, March 30, 2007


The Dow and Nasdaq were up modestly. The S&P was off fractionally. Today was an action packed session though the final numbers do not reflect it. Up 70 on the Dow at one stage, than down 100. The bulls fought back with the help of quarter end window dressing to bring the markets to break even.

The US decision to impose trade sanctions on China was the impetus for the 100 point drop.

The stand off between Iran and the UK continues to bear down on the markets.

Rising income and consumer spending dampens any hopes of a rate cut.

Corn futures plummet as farmers plant crop in record numbers in part due to ethanol demand.


Most Asian indices are up moderately. The European markets are bullish.

Consumer spending is up more than forecast due to higher gasoline prices.

The US is considering imposing economic sanctions on China to deal with trade deficit.

The Chinese economy is expected to continue to expand at a mind boggling pace.

The markets are set for a higher open. I expect the momentum from yesterday to continue.

Thursday, March 29, 2007


Today was a strong reversal day in the markets. We has a strong gap up open followed by a sell off that lasted until the final 2 hrs of trading. From there we had a strong rally into the close. The final hour or two are the most important and judging by todays action I think we continue moving higher.

The chart shows, the Dow bouncing off the area from where it previously broke out. ( Around 12,300). The same is true for the Nasdaq and the S&P. The sell off till the final hours offered a very safe long entry point. I believe in the coming week we will test the previous highs ( Dow 12,511 , Nasdaq 2,460, S&P 1,440) .

On another note Bernanke is scheduled to speak tomorrow. Considering he failed to trigger a rally last time round, maybe this time he'll be more successful.

Dell shares drop in after hours on reports of accounting 'misconduct'. Define 'misconduct' ....

Oil prices continues rising amid continued tensions in the Persian Gulf. Are we going to finally get to $100 per barrel ? That could be the dagger in the heart for market bulls.

Economic growth expected to be subpar. Where's Goldilocks ? Hello ! Anybody !


The markets in Asia and Europe are a stream of green arrows.

4th quarter GDP growth was better than expected.

Jobless claims came in lower than expected.

US Steel is buying Lone Star Technologies, an oil field pipe maker, at a 39% premium.

The indices are expected to open higher. Judging by the strength in overseas markets, I expect US equities to put in a decent rally.

Wednesday, March 28, 2007


Helicopter Ben was unable to save the markets today. Red all across the board save the precious metals. Gold has been moving up and two of my miners - GRZ and KRY had absolutely phenomenal days up 50% and 28% respectively. They were my plays on what I like to call 'Hugo ain't crazy' . Both are Venezuela based gold mining companies that were waiting on environmental permits. GRZ got theirs today hence the crazy price movement. I backed up the truck on a few Venezuela plays a few months back due to concerns that Hugo Chavez was going to nationalize companies and screw over shareholders. Nationalize he might, but screw over he won't. The market overreacted and I took advantage by buying VNT, HNR, TX, GRZ and KRY to name a few and hence the portfolio profited handsomely. Bottom Line: There is always money to be made in market overreactions.

Sometimes trading the market feels like this....


The Asian markets are red save China which has been on a tear as of late. Europe is a sea of red as well.

The investigation of Beazer homes for mortgage fraud was the big after hours news yesterday. I wonder how many other home builders will suffer the same fate.

There was a $5 spike in oil after hours after rumors of an Iranian missile strike against a US warship. Oil is still trading up a buck. Whoever planted these rumors made a killing I suppose.

Orders for durable goods increased less than expected. I think its obvious by now that the economy is slowing.

Today, Bernanke is testifying before Congress on the US economic outlook. Bulls will hope he paints a rosy picture of the economy. I expect he will. The indices are opening lower but I expect a Bernanke rally .

Tuesday, March 27, 2007


Consumer confidence dropped , the housing data is soft and the markets ended significantly lower.

Inflation is still an issue. Maybe Bernanke will drop rates to ease inflation.

Goldman is raising a fund to buy out the entire market. Maybe they'll pay a 50% premium.

Over 2 million homes are expected to be lost to foreclosure over the next few years. Maybe I can finally buy that ocean front penthouse on South Beach.

Crude oil continues to move higher. Is a confrontation with Iran priced in ?

The economic picture is getting worse. In the short term however, I believe the markets will continue trending higher. Bernanke is speaking tomorrow and we all know how he rallies the markets. I expect early weakness followed by a Bernanke rally.


This morning the markets across Asia are mixed. Europe is generally positive .

Home prices across the nation have fallen for the first time in 6 years a study shows. I'm shocked that the fall is only 0.2%.

Lennars 1st quarter profit tumbles 73%. Things are only getting worse for the home builders.

Consumer confidence data will be key to the markets movement today.

Monday, March 26, 2007


Buy the dip. That appeared to be the theme of the day. From being down over 110 points to down only 12 on the Dow while a 20 point dip on the Nasdaq ended with a gain of close to 7 points. The S&P too closed in the green from a drop of 13 points. I guess all's well that ends well. Like I stated earlier today, the markets will find a way to make good news out of the housing slump. The indices appear to be firmly in an uptrend once again.

The bottomless Housing market

New home sales fell 'unexpectedly'. The market has reacted by dropping sharply. I hardly believe the fall in new home sales was unexpected. The housing market is in a recession. Anyone who believes that housing has bottomed obviously has their head up their bottom (ass). We will not get a housing bottom till the current 8 month supply of homes gets down to below 4 months. In other words, atleast half the homes for sale on the market need to get sold. The problem we are having in housing is 4 fold. First, there is a huge glut of inventory which in part was caused by the excess speculation in housing. Secondly, less and less buyers can actually qualify for a mortgage due to tighter lending practices. Thirdly, there are less people actually interested in buying homes than ever before. Speculators i.e flippers are out because houses are not appreciating. First time buyers are out because prices are still too high. Other buyers are out because they are scared of a housing market crash and prefer to sit and wait it out. Lastly, builders who are sitting on cheap land which they purchased before the boom are still building because they want to squeeze every last drop of profit. These 'greedy' builders are only adding to the inventory problem.
The markets across Asia are mostly up with the Shanghai Composite at all time highs. The European exchanges are mainly in the red.

Crude Oil prices are rising to 3 month highs on tension between Iran and the UK.

New home sale numbers will be announced at 10am EST.

The US indices are expected to open higher. The Dow is on a 5 day winning streak. If this can continue remains to be seen. I expect the new home sale numbers to have a positive effect on the market. If the numbers are good than all is well with the economy and if the numbers stink, than we should expect a rate cut soon or atleast that is how I perceive the market to react.

Friday, March 23, 2007


The markets are mixed across Asia and Europe this morning . The Dow and Nasdaq are looking to open moderately higher.

Home resales across the US declined for the first time in 3 months. Not a big surprise there.

Yahoo is on a roll with its new Panama Program. Is the new pair trade short Google, Long Yahoo ? It was the other way around for most of last year.

Oil prices continue to head north.

Genentech reports flat sales for the 1st quarter. Shares drop.

Nike reported some soft sales yesterday evening but saw global growth.

Thursday, March 22, 2007


Stocks drifted along today without any clear direction. Looks to me like the markets are still digesting yesterdays gains.The Dow finished in the green which is a good sign for the bulls while the Nasdaq was off a few points. The S&P 500 was also fractionally down. Motorola's dismal outlook was the major factor in keeping the Nasdaq down.The midcaps and the oil sector lead the way while banking and housing were weak.

The 'Godfather' of private equity, the Blackstone Group is going public. Sign of a market top ?

Palm got crushed today after analysts rejected buyout rumors. I happen to think Palm will do well in the coming years. Their new Treo is an impressive device and should help sales tremendously.

More buyout rumors. This time its Rackable the maker of a sleek brand of servers. The stock is trading not too far from its IPO price from 2 years ago. A price below $20 reflects a bargain in my assessment. Its also a heavily shorted stock which can cause it to rocket upwards.

Big wall street firms are battling to save their intellectual property. Their "research is ``in the throes of being Napsterized"


The bulls are back in the drivers seat. The strength across the board in Asia and Europe has been spectacular.

Initial jobless claims have dropped to a 2 month low.

Motorola dropped a bomb. Apparently the KRZR is not selling well.

Bernanke and company are still worried about growth and inflation. The fact they dropped any hint of rate increases i.e. tightening meant the bulls were off to the races.

I expect today will be another bullish day across the indices. We should be able to carry on from yesterdays momentum and the strength in overseas markets.

Wednesday, March 21, 2007


The market surged to the upside after 2:15pm ET following the Fed decision to leave rates unchanged. The tone across the board was very bullish and strong volume accompanied the up swing. The Dollar dropped sharply against major currencies while commodities rallied including big moves in Gold and Oil.

I started the day biased to the bearish side via my numerous double inverse ETFs- QID, SDS, DXD, MZZ and TWM. Following the Fed announcement and gauging the bullish market reaction, in the space of 4 minutes I proceeded to sell all those inverse ETFs while adding to the double bull ETFs- QLD, DDM, SSO, MVV and UWM. My best performing longs included SNDK, MU and OXPS. My Euro and Gold positions did well too. The portfolio finished the day considerably higher with a large factor being the post 2:15 switch from the bearish to bullish ETFs. On a day like this, its best NOT to argue with the market. I can be bearish or bullish but ultimately, one needs to follow Mr. Markets direction to make money. How much upside we have is anybodys guess but, todays strong bullish action suggests, we may still have room to move up.


The indices are breaking to the upside after the Fed announcement. I believe the Dow, Nasdaq and S&P have plenty of room to run to the upside. I am selling my double short ETFs and adding into the double bull ETFs.


Markets across Asia and Europe are very bullish.

Shares in Morgan Stanley are surging after the company reports profits exceeding all estimates. Trading gains played a big factor. Could they have been short February 27 ?

FedEx reports first drop in earnings in three years. Winter storms and slowing US economy to blame. Shares are tumbling pre-market.

Could this be a contrarian indicator for a big rally ? Merrill Lynch survey shows investor bearishness at 7 month high.

Based on the price movements in the US and overseas markets, it appears the bulls are making a comeback. Today will be an important one for the markets with the FED decision being announced at 2:15 ET. Rates are expected to stay the same. I believe the reaction of the markets after 2:15 ET will be crucial.

Tuesday, March 20, 2007


Once again the bulls ruled except for a slight hiccup around midday, stirred up by King Hals weak profit forecast.

The S&P 500 had its best 2 day gain since last August.

Solid housing starts announced today were the major factor in the market advance.

Palm was up on takeover speculation. The new Treo smartphone has been getting rave reviews and appears to be a product that can put a dent in the Blackberry.

Oracle and Adobe are two companies that are reporting solid profit growth after the bell. Shares in both companies are up in after hours.

The FED announcement is tomorrow. Rates are expected to be kept unchanged. It appears the bulls have the upper hand for now but, we all know that a 2 day 180 point rally can be wiped out by the likes of 400+ and 242 point drops that we have seen in the last 3+ weeks.


The bulls are running wild today. The home construction news was a boost to the market though I hardly believe that the bottom in housing is in.

In retrospect I feel foolish selling a good chunk of my ultra bull ETFs - QLD etc while adding to the ultra shorts QID etc. Miraculously despite my fund being biased to the bearish side I am actually in the green today with gains in GLD - gold ETF while some of my long positions have been running wild such as SNDK and COGT. I figure if the FED continues to pump liquidity into the system, gold will benefit and thus GLD is a good hedge to my ultra short positions.

On days like these I am Jacks smirking revenge .....


Housing starts have been stronger than expected which is boosting the futures.

ICSC-UBS store sales shows increases in part due to warmer than expected weather but, warns that high gas prices are hurting the consumer.

The Asian markets are relatively strong this morning but Europe is considerably weak .

The Fed starts their 2 day meeting today in which they are expected to keep interest rates the same.

I expect the US equity market to open higher but weaken throughout the trading day.

Monday, March 19, 2007


We had a fairly big up day on all indices. However the volume was unimpressive and we were pretty range bound the last few hours, suggesting that there was plenty of distribution in process. I sold off a big portion of QLD, SSO, UWM, MVV and DDM positions while adding to QID, SDS, DXD, MZZ and TWM. I did not trade any of my individual stock positions.

Apart from some mergers and takeovers, there was not any significant market moving news out today. The M&A activity along with short term oversold conditions were the likely impetus for todays rally. Tomorrow will see some important economic data such as ICSC-UBS same store sales, housing starts and the red book.


The Asian markets put in a very strong performance. Europe is equally strong.

There is no market moving economic data of any significance expected out today. I expect US equities will play of European and Asian strength.

There is more takeover news from Europe. The potential target being ABN Amro. I expect this news to boost stocks of big banks today.

South American companies are getting into the buyout act.

I am playing for strength in the US equity markets today. The direction of the overseas indices suggests we will have a moderate to strong upside day.

Friday, March 16, 2007


All the indices finished in the red. In all it was a rather lackadaisical day in the markets despite or perhaps due to option expiration. The last few days have seen low volume which I expect will change next week.

Here are a few of my thoughts for the week.

  • The PPI and CPI numbers have confirmed that inflation is still a problem. This limits the ability of the Fed to cut rates anytime soon.
  • The subprime blow up is increasing pressure on Bernanke to cut rates. With inflation still being a problem, Ben is in one hell of a tight spot.
  • The housing market is nowhere close to bottoming with a record 4 million + homes on the market. Add this to tightening credit and decreased demand and you figure it will only get worse.
  • Treasury Secretary Paulsons remarks about subprime being contained don't inspire any confidence .


Gold has been acting well today.

The Euro is poised to break 2 year highs versus the US Dollar.

Crude oil is rallying today after weakening the last few days.

DBA is an ETF that I really like. Its a commodity ETF composed of the softs such as corn, wheat and sugar excluding energy and metals. In a commodity bull cycle the softs tend to outperform in the latter part. Energy and the metals have outperformed in the last few years. I expect the agricultural commodities to outperform here onwards.


The markets are mixed in Asia while the markets in Europe are red all across the board.

US consumer prices are up sharply, making it a lot tougher for the Fed to cut rates.

Industrial production was up 1% which was higher than forecast and a good sign for the economy.

Thursday, March 15, 2007


Optimus Prime vs Megatron . Bulls vs Bears.

Like I expected, we closed in the green on the major indices. There was some concern over higher than expected PPI numbers and a weak Philly Fed Survey . To their credit the bulls held their ground and we were in the green for most of the day.

The mortgage lenders were on fire today . Stocks like LEND and NEWC were up over 60% and 90% respectively.

Old Alan expects subprime fallout to spread to broader economy. No shit. Here's a good article courtesy of Minyanville explaining how subprime affects us all.

Tomorrow is the all important CPI numbers. Based on the PPI, the CPI numbers will come in above consensus, showing us that inflation is still a problem and rate cuts will be harder to come by. Added to it being option expiration tomorrow, we could be in for a roller coaster in contrast to todays laborious action.


Strength across all boards in Asia and Europe with most markets up over 1%.

Big jump in PPI shows inflation is still an issue and limits the ability of the Fed to cut rates.

ICE makes an offer for CBOT. Expect strength in exchange stocks today.

I expect the US equities to play of the strength of the world indices. There will likely be initial weakness due to the higher than expected PPI.

Wednesday, March 14, 2007


A very volatile day in the market. Option expiration is on Friday and volatility is taken to extremes on days like this. Today was a great trading day. Based on yesterday and the overnight indices across Asia and Europe, weakness was to be expected during the early part of the session. The market did pierce its March 5th lows that I had mentioned however, this temporary break of support brought in the buyers and a strong rally unfolded. This rally in all likelyhood is a result of market participants trying to pin the indices to certain levels ahead of expiration. In addition, we were at oversold levels from a short term perspective. I do believe we will head lower in the weeks ahead. But I do think we may see a rally all the way to Fridays expiration. Key economic data such as PPI and CPI are being released in the days ahead which will result in increased volatility.

The homebuilders were the big winners today. Looks like an oversold bounce and short covering to me.

The story being told to support the rally is that the subprime mess is not as bad, as originally feared. I do not think this is the case. I do not believe a bottom is in for housing or the mortgage sector. What we had today, was an oversold bounce along with the volatility of option expiration week and an effort to 'pin' the price of indices and stocks to certain levels.


We got the bounce that I had mentioned about pre market. Looks like we are rallying into the close. A very good day for anyone trading both sides. Short in the morning would have made you a ton. Long after the reversal would have added to the gains. I love days like this .

Here is a very good piece explaining how the mortgage process works and what happens when things go wrong.


Dow could not hold 11,973. 11,700 is the next area of support.


Its been a rough day across Asia . Its not any better in Europe either.

US current account deficit shrinks on lower oil prices and a cheaper dollar.

Lehman net rises and their mortgage risk is hedged through a credit-default swap index. I'd like to know who the seller of the swap is . In other words, who is holding the bag ?

General Motors finally profitable but misses estimates on mortgage losses. No surprise here since, GM is heavily exposed to the mortgage industry, through their GMAC finance unit.

Treasury Secretary Paulson believes economy is healthy and housing has bottomed.

We could be in for a rough day especially if the Dow 11,973 level does not hold. The futures are indicating a lower open. If the above mentioned level holds, we could get a strong bounce and a nice rally into the close.

Tuesday, March 13, 2007


This will be the bulls best friend the rest of the evening.

The markets opened weak and got progressively weaker throughout the day. We closed near the lows which is a bad sign and a taste of things to come tomorrow. We may very easily test the Dow 11,973 lows of March 5th tomorrow. Support at these lows will be an encouraging sign from a bullish perspective. A break will be very bearish.

The following factors played a key role in todays market slump.

I expect weakness in Asia and Europe overnight and I expect continued weakness in the US equity markets tomorrow unless, we test those March 5th lows early and rally into the close.


The indices are breaking down to plunge through day lows. Energy is holding up but all other sectors are being decimated. We could either bounce of these levels or face further selling in the last 2 hours. The financials have made a big U-turn today from the earlier postive news of Goldmans earnings . The sector is firmly in the red and Goldman is gone from being up 6 points to being slightly in the red.


Retail sales were weaker than expected . Major indices are lower as a result.

The Asian indices are mixed while Europe is in the red .

Goldman Sachs earns record profits on trading gains. Keep in mind this is for 3 months ended February 23. Could they have lost money trading on February 27 ?

I am looking for weakness in the markets today.

Monday, March 12, 2007


Pending bankruptcy and halting of New Century Financials stock gave the market early jitters.

A slew of mergers and acquisitions gave the market hope which the bulls were able to ride through the middle all the way to market close.

Is KKR telling us something by their acquisition of Dollar General ? Telling us that they expect worsening economic conditions that will force all of us to shop at dollar stores.

Asset managers were the biggest winners today while builders were the biggest losers.

All indices were strongly in the green. But volume was exceptionally light. Just take a look at the Qs . Lightest volume in 15 trading sessions.

Light volume is an indication traders are on the sidelines awaiting key economic data such as retail sales and business inventories being released tomorrow.

I expect tomorrow to see heavier trading volume. As to which side the market will lean, I do not have a clue. If retail sales are weak, the market could drop as fears increase over a possible recession or atleast, a bigger than anticipated slowdown. On the other hand we could rally strongly because, traders believe a rate cut will be imminent.
Asia is all green . Europe is a sea of red . I am biased to the short side unless we break last weeks highs on strong volume. There is still a lot of concern about the subprime mess .

Friday, March 09, 2007


We got of to a flyer today with a big gap up open . From there on it was pretty much a fade the gap story. We recovered at the end to finish 15+ on the Dow , less than 1 on the S&P and slightly red on the Nasdaq.

Fed Governor Susan Bies made the headlines today, with her remarks about the subprime melt down only being the beginning. I'm on the same page as her. The mortgage and real estate industry will only get worse from here. In related news, over 500,000 homes could be added to current inventory based on, the rise in defaults and foreclosures. You also have Bernanke taking a hard line on Fannie Mae and Freddie Mac. You can be sure that the Fed and company are very worried about the mortgage/real estate situation. They may not act like its a big deal but, deep down inside they know its a problem and in their subtle and not so subtle ways, ( case in point Bies) they are acknowledging its a serious issue that must be reckoned with.

China is forming a fund to invest its $1 trillion in reserves. Lets hope they don't use the proceeds to short the US equity market.

Wasn't it barely a year ago when AMD was the darling of Wall Street ? My, how times have changed . All that talk about AMD eating Intel for lunch and now this. On a personal note, I think AMD is a buy at current prices .

Smartmoney has my favorite sector tracker tool. Steel was tops for the week. Year to date Tires are up a whooping 33.59 %. Starting Jan. 2nd you could have invested in the tire sector and be done for the year.

Why India's mind boggling growth could come to a screeching halt . Maybe this is a good contrarian play.

Is the volatile market wrecking havoc on Goldman Sachs ?

Option expiration is next week. Could make for good volatility. I am confident the Dow will trade somewhere between 5,000 and 15,000 next week. I hope I am right.


Stocks are expected to open higher after February employment numbers came in line with expectations . The numbers however were the lowest since January 2005.

The trade deficit slid nearly 4% in January. A weaker dollar and a curbing of the US consumers appetite, for relatively more expensive foreign goods, played a part no doubt.

Overseas markets are mixed.No big gainers in Asia but India was down over 1%. Europe is a mixed bag as well, with a lack of clear direction.

My take: The markets will open strong, drift throughout the day and finish weaker on profit taking ahead of the weekend.

Thursday, March 08, 2007


Strong start to the day as expected by the strength across Asia and Europe. Weak close.
The rumors of New Century Financials pending Chapter 11 bankruptcy soured the bullish mood.
I think Tom Brown is a very brave man. But, there is a very thin line between being brave and being downright foolish. Right now the only mortgage company I would bet on to survive the subprime melt down would be Countrywide . All bets are off when it comes to the other lenders. I wouldn't even count on Freddie and Fannie making it through.

Traders appear to be anxiously awaiting tomorrows job numbers . We could see weakness if traders decide to go cash for the weekend.

I cut back some long positions as I sensed weakness later on in the day. I added to my QID , DXD , SDS and MZZ positions. Took in some TWM as a precaution . Judging by the down, up , down , up trend of this week I expect tomorrow to be a red day. As I mentioned before, neither the bulls nor the bears appear to be pressing their advantage.
The US markets are poised to open higher after significant gains overnight in Asia and green indices all across Europe .

Economists are forecasting stronger US economic growth .

Retailers had a lackluster February. 'Unseasonably cold weather' to blame. If the market rallies from here I do think retailers are a very good buy though.

The European Central Bank raised rates from 3.5 to 3.75%. Euro is going to show strength as a result.Long FXE.

Job losses fell but are still showing weakness .

Wednesday, March 07, 2007


We were making decent progress till the markets took a dive in the last hour. Kind of tells you how many people want to be long. Homebuilder D.R. Horton CEOs comments that '2007 is going to suck' probably played a large part. Perhaps the moderate to sluggish economic growth around the country as revealed by the Fed beige book also played a role. Nonetheless, I expect tomorrow to be a red day all around unless, Blackstone buys the S&P 500 at a 30% premium.

The oil sector did really well today. As to how long this strength will last I have no idea. Its notable that the oil sector has the least correlation, to the overall markets.

The Bank of England and the European Central Bank will meet tomorrow to decide interest rate changes. A rate increase by the BOE or the ECB would likely have a bearish effect on the overall markets.

These were the big hedge fund losers in February. The guys ( and gals) who got caught with their pants down so to speak. Question: How can you be a hedge fund without being hedged ? Seems to be the case these days with Amaranth, Red Kite and so on.

The mortgage blowup has spread beyond subprime. Reminds me of a memorable Dennis Gartman quote " When they raid the house of ill repute, the good girls and the piano player also go to jail".


We have no clear direction today. The indices have been bouncing around all day. Red one minute, green the next. The Bears are shell shocked from the drubbing they took yesterday. Meanwhile, the Bulls are still in recovery from the massacre from last Tuesday through Monday. Neither side wants to push their advantage. I will pay attention to the markets 2:30 EST onwards to get a sense of where we are heading. In periods of indecisiveness it pays to be fully hedged or in cash. You do not want to be caught leaning the wrong way as a lot of bulls learned last Tuesday (and many bears learned yesterday).
Paulson is in Asia. Trying to calm things down I suppose.

Look whose back ! Is he going to keep doubling down to regain his losses, like he did last time around ?

Asia is mixed but Japan is down. The US markets tend to correlate strongly with Japan so we could see some downside. Europe is mostly in the green .

Expect the bull prepare for the bear.

Tuesday, March 06, 2007

Remember the Bull

The bulls took over and never took their foot of the pedal . My stock today was NYX. I had almost forgotten I had this in the portfolio till it took of after 2pm. Short squeeze or whatever it jumped nearly 6 points. The indices closed near the highs of the day so I expect more upward momentum tomorrow unless ofcourse, we have a sea of red in Asia and Europe.


The bulls are going great guns. The indices are at a daily high. Can we go higher from here or will the bears crash the party ? On a personal note the portfolio is soaring. NTRI,TZOO, BLUD and GOOG are all up over 2%. QLD, DDM and SSO are adding to the green. Will add some SDS, DXD , MZZ and QID for insurance.


I expect nothing less than a strong rally in the US markets today. Asia is a stream of green arrows. India up over 2 % , China up nearly 2 % , Japan up 1.2%. Europe is very strong too and the momentum, should carry across the Atlantic.

The Yen has seen a big decline which should help us plenty since, it was this 'unwinding' of the carry trade and subsequent appreciation in the Yen, that was a big factor in the stock market plummet.

The economic data released today has been pretty crappy. Lets see if that puts a lid on US equities. Productivity is down and same store sales stink.

Greenspan is at it again . Now there is a 1/3 chance of a recession. Hmmmm. How does Mr. smarty pants figure that out. 1/3. Why not 2/5 or 1/6 or 30% or............

Will bad debt from the sub prime mortgage fall out be limited ? Paulson certainly thinks so. I do not.

The plan today is to expect a rally. Nothing less than 100 points on the Dow, 25 on the Nasdaq and 15 on the S&P 500. And we have Bernanke speaking . Will he spark of a huge rally ?

Monday, March 05, 2007


I am going to find some issues to go long today. There is too much doom and gloom out there. Picking some high beta names. Some NTRI, a bit of BLUD, a little AKAM, a pinch of CELG and a topping of HANS. I think I'll toss in some TZOO and a helping of GOOG for good measure.And I'll close out that blasted AAPL short position for good measure. Maybe we'll rally, maybe we won't. But if we rally I think I may outperform. If not I will just dump 'em all.In a bear market its best to position for a rally before the actual rally because, once you spot the rally its usually too late.
Slowdown in the service sector. What do you expect ? Tightning of credit leads to reduction in demand, which equates to an economic slowdown. Add in the real estate slump and the inability of consumers, to use their homes like ATMs and you have a recession dead ahead.

More on the subprime blowup . And people couldn't see this coming ? Seriously, if you could breathe, you were entitled to a home loan. With all those marginal consumers getting home loans and equity lines of credit, an accident was waiting to happen. And this is far from over. The worst is yet to come.

Oil prices extend decline. Makes sense since global growth is slowing, based on the economic data we have seen and oil prices are likely to pull back, with a reduction in demand. However I do not see oil prices falling below $40 over the next 12 months.

Is he going to be the poster buy for the leverage buyout excess of the 2000s ? With a cover on Fortune the chances are pretty high.

This could go a long way in displacing the US as the world's technology leader. If the brains no longer want to come here, the chances are the next great technology companies, will be conceived in Bangalore, rather than Silicon Valley.

The restatements continue.Lucky for me I am short RIMM. Could all these restatements be a result of option related expenses or could fradulent accounting be playing a part ? I wonder.

Friday, March 02, 2007

California Dreamin

Wow. That was one wild week. Lots of opportunity to make money. Even more opportunity to lose money. With that close today you could smell the fear. Nobody wants to be holding going into this weekend. I can't blame them. As for me I'm going back to Cali for some R & R. And work on some market 'strategery' as Dubya would put it.

Our boy Bernanke is scheduled to speak today at 11pm EST. I would look for a slight rally.

Now Poole says there could be a recession. Then in Greenspan like fashion, he hedges his bet and says the central bank does not forecast one. Hmmmm.

Goldman , Merrill and Morgan Stanley 'almost' junk ? Not surprising considering the majority of their profit comes from trading , derivatives and other 'higher' risk activities.

The plan today is to play for a rally but stay alert for more downside. I am leaning towards a green finish on all indices but, there is the possibility of a selloff in the last hour of trading as traders fear holding over the weekend, in these volatile conditions. Than again Bernanke could spark of a major rally.

Thursday, March 01, 2007

Paulson Says U.S. Economy Is `Healthy' and Job Market Is `Firm' . Hmmmmm. What else what he going to say ? The economy is 'unhealthy' and the job market is 'wobbly' ?

Some insider trading news. What else is new ? I would suspect anyone with an IQ of over 100, has a less than a 1 in 10 chance of being busted for insider trading. With those kind of odds can you blame them ?

Countrywide sees a rise in delinquent sub-prime loans. Wow. Big surprise there (Not).

Greenspan does a 180 on a US recession. Way to hedge your bet Alan ! Now either way he is right.


The bears did a Tony Montana on the markets this morning but now the bulls are trying to answer back. A pretty wild swinging day. I would think a short term bottom is in and we rally for a week or two till resistance which is Dow 12450-12500 or so.
I have lightened up the portfolio on QID, MZZ, SDS and DXD the double inverse indices. I have added QLD, DDM and SSO - the double bull indices into the mix. Have not lightened up much on the stock holdings yet because I still expect a rally. Still holding gold and the Euro via FXE. Looking to add more Yen as a hedge.

If we end in the green today, the excitement will likely spill over onto tomorrow. The first shots have been fired but the war is not over yet. I believe a change in market direction from bull to bear is on the horizon.