5/21/2010 - Breakin the Chains

A good friend, and Ace Sales trader at Cantor, called me yesterday to Congratulate me on my recent calls. He jokingly said JT you been righter than right, and one of these days somebodies gonna throw a boatload of cash at ya to trade these short ideas" he then said "gotta run going to see Alice n Chains". Never mind that at first I thought who goes to see Alice in Chains! But then after reconciling who I was talking to, I thought about his compliment, and Alice and Chains, and started thinking about the Man in the Box, as I began hummin the intro,http://popup.lala.com/popup/504684646424657155 to myself myself. The thought occurred to me that for the last 18 months I have felt like a man in a box. As every fundamental broke down in the markets and every metric said short this market, the Government Sponsored Rally continued. No matter who I told or what I said no one wanted to hear that there was still more trouble out there for US and Global Banking. In the box talking to myself, about things that were right out in the open. I felt like I was boxed in many times surrounded by pundits on every network laughing at my predictions that the Financials were not sound. I tried everything to make the point, but everyone was on the Joan Rivers Rally and only rosy predictions of green shoots, and new normals were given any credence.
Joan Rivers Rally....?? WTF is that JT? I said on FNC that there were so many artificial parts to the market, that it should be called the Joan Rivers Rally. The rally and the woman have a lot in common, tons of work to prop up, pin up, and shine up, a deteriorating entity. Despite tons of work and money trying to make things look better to the naked eye,
the facts are still there right in front of your face for all to see. Its nothing but a facade, and if you look a little closer the results are actually hideous. Now people are seeing it and I feel more like a jack in the box, finally poppin out of the box. The calls are happening, the facts are comin out and the markets may be finding their way to some healthy levels.
Email your Mother....
I got a ton of reaction to my recent CNBC spots mostly positive, people telling me hearing my regular man point of view is refreshing. Many emails were complimenting the way our analytic give a new point of view. But of course there's always a few J-O's. Some close minded numb skulls have found it necessary to write me to reflect that I'm an a-hole, actually a M-F'ing A-hole. They are crushing me for being anti American, saying I'm enjoying stocks going down, and I should die. Somehow even though I was clear I don't even trade single stocks, I'm profiting from stocks going down. Some of the terms used to describe my presentation are highly stereotypical, and offensive but hey keep em coming. I appreciate all feedback. I would suggest that you dont use those same fingers when tapping out an email to your mom.
Just to set the record straight watch the shows, and read my disclaimers. Oh that's right unlike the other commentators I have no disclosures or disclaimers, WHY?? Because I don't buy or sell single stocks or etf's or futures. I am not happy when markets go down, nor do I relish american financial companies getting slammed. But for the most part short sellers have been the first alert system for investors on almost every market catastrophe. And I'm not hoping to be right, the fact that short sellers are establishing a position in a stock or a sector means there's been significant research and there's a disconnect between value and market price. I'd rather tell people that this is happening from an objective point of view and let them decipher the info, than just pot shot stocks and hope they go down. In my experience the shorts have unlimited exposure when they are wrong so they do the most research, and they are usually right. So take the info from our analytics and understand how its derived. Its raw its real and for the most part its reflective of some real good fundamental research.

EXPIRATION EXPRESS
A down day on an Expiration Friday is a very ominous sign. This market is looking worse by the hour, but the rally is creating opportunites to add to established positions. Any uptrend is bringing in shorts to add to positions in my view. There is no real consolidation point til like 9200. Both my DOW 9000, and S&P 950 calls are within reach, and a red day into the close could spell a bloody Monday. There is some extra buying today because of expiration so with that gone Monday things could get ugly quick next week. We have been way higher than our 60 day average on volume the last couple of weeks, but yesterday the volume of stocks requested was up 40% over Wednesday.
Also End of Day will tell alot, and overnight shorts will give a real good look at short sentiment for the weekend. If they take significant positions home for the weekend that will be a heavy indicator that Monday and next week will remain under pressure.
BIDU -- VALE -- C BAC MBI MS JPM
Are big names today. XLF is a big play betting against macro financials. The shorts are on financials like piranha. Its a frenzy to add to positions. Not to drive it down just to get in on the trade before it gets to a value level.
There is a big play to the downside in this stock IOC, I think I alerted some readers to this a couple weeks back but I'm hearing this stock could be $25.
Going Down
Depending on todays behavior 7500 could be the next level to the downside. That's the type of negative sentiment I think is being reflected by our volume-breadth and trend analytics. Happy trading, enjoy the weekend. Sorry todays note was a bit late, I wrote the whole thing off my BlackBerry intermittently between phone calls and family matters.
Bella Vista 1pm Tee Time.
Mondays note will come pre-open so you can assess and weekend analytics prior to your first trade.

JT