A$$ Kickin' Iphone and Fool's Gold

Today, when you look at your Iphone to check on the latest BP oil spill news, or to see some highlights of the Lakers/Celtics game, you will be looking at a product you probably recently bought which is now officially obsolete. Steve Jobs, and
his Apple-opoly, have introduced the next generation Iphone, while most Iphone users, are still walking around on a last-gen model...


The one issue we didn’t hear much about was battery life. One of the main issues with the first generation Iphone was the fact that the battery was self contained, and its battery life sucked. I retired my Iphone due to it always being on low to no battery. Supposedly the new phone has 40% more talk time, but that remains to be seen. I know a bunch of people who think that fixing the battery issue and the broken screen issue is a tougher task for Apple, than the Lakers stopping the Celitcs Ray Allen and Rondo, or these idiots at BP fixing the oil spill. In one year we are on the 3rd generation of the Iphone, welcome to the new normal. The Bulls ran out of battery life yesterday at the end of the session and the Bears took firm control of the market dialogue.

Shorting Stocks 101…Win Money
Thanks to a late day power outage, the Bulls couldn’t hold up their end of the bargain, and the Bears took firm control of the major markets easily. As I have delineated in my blog recently, there are no dynamics existing in the markets right now that inspire fear in the bears, and the bulls seem like they are basically in utter fear of a cataclysmic event.
The short play is simple sell stocks today, let them go down and buy them later at a lower price. Think about how many times you bought a stock and it immediately went down, imagine if you’d have done the opposite, how much would you have made???

Hot Shorts
With temps heating up in NYC there were numerous sightings of hot shorts in the streets but none as attractive as yesterdays picks. yesterdays note, I outlined 6 stocks which seemed primed to go lower. On a day where the major markets were down about 1% the stocks I highlighted in yesterdays note were down 10%, 10X more than the major indices. Pretty good, huh? If you played them all short, you are rolling in the dough today.
Here’s the proof: FTR (-3.3%) DNDN (-10%) DCTH(-26%) PMI(-5.75) BZH(-11%) HOV(-6.5%) Total return for the group -62.5% . Or, an average of 10.4%. All of these stocks are still poised to head lower, so you can play them again today. And read on to find some new names for today.

The Drunks Gold Nasdaq Theory
I often try to find a rational reason to include some tidbit about food or drink in the daily missive. So today, it’s the drink. You see, some years back my brother Derek and I were proprietors of a saloon uniquely named Tabacco Road. It was a fine night spot. The day crowd though was rather sporadic. As I was just starting my independent Stock Loan business, I figured being we had a phone, a tv with CNBC, and very few day customers, the bar was a cost effective place to double as my first office. So there I sat daily, at the bar, where I took deliveries and supervised the cleaning crew, and other assorted daytime duties, all the while making my calls to try to start my stock loan business. The few regulars we did have were your standard, red faced neighborhood drunks: harmless beer and whiskey drinkers who just wanted someone to talk to. One particularly red faced drunk was a former analyst at a major firm. He was rich, retired, and resolute to drink away his final years. His kidney no doubt became the subject of some scientific experiment. He would start the day at 12:05, and early on, he’d make some rather insightful observations. By 3:00 however, he was typically wasted and cursing about how he should have been President of Paine Webber. There was one repeated observation which he made, both sober and drunk that I have carefully watched over the years. In the late 90’s and early 2000’s, as our market was creating more bubbles than a Jacuzzi, the old drunk would go wild saying that this whole market was overblown and the real cleanout, he would say, would come when the Nasdaq and Gold intersected. HUH ??? Back then the NASDAQ was at 2500, and Gold was at a lowly $300 an ounce. The theory seemed as wobbly as the poor slob pounding it in my head every friggin day. Johnny watch out, he’d screech down the bar, “the real problem is gonna be when Gold meets the NASDAQ…. watch out.” “JT” he’d annoyingly howl, “youre laughin at the old drunk, keep laughing kid, but watch, I may be dead but its coming, and its gonna be bad.” His hypothesis was, when the value of an ounce of gold is equal to the NASDAQ, people are gonna run from that marke,t and Gold will shoot up higher and stocks will get crushed. Soon, business grew, and having the Mexican guy Juan who was mopping the floors answering the phone when I had to run to the bathroom, was no longer, err, ummm lets just say, professional, so the iconic Tabacco Road was closed, and we focused solely on the Wall St. game. The Drunkster, though, has never left my head. As I look up today, I think he may have been right. The gap has closed considerably and the two are in striking distance of meeting. Today, instead of the 2200 points that separated the 2, ten years ago, only 900 points separates them. Another downturn in stocks and a continued uptick in Gold could make the Drunkster Intersection Theory actually happen, and it could get ugly. Beware Drunken Analysts in Bars, but keep your eye on this metric.

TODAYS HOT SHORTS…
Today there are no major news pieces so it may look like a mild day but beware low volume dips. With no true buyers any geo-political surprises can tank this market and quick think Flash Crash squared. With the economy in a shambles, our President is focused on fixing Senate and Congress races, rather than oil spills or economic messes.
As the Great Changer goes public with his threat to kick some ass,

the bears may be kicking some bull ass today as well. Here are some names that the shorts seem to be aggregating some interest around. There doesn’t seem to be any significant upside threat, and any up market is an opportunity to put on the trades at higher prices, expanding your profit universe.
GSLA—BIDU—HCS—NFLX—IOC—NILE—AIG--C

One Last thing…
My good friend and trusted compadre, one Dr. Patrick Curry, has begun experimenting with a new nutritional and exercise program that could make Dr. Atkins yesterdays news.
He is apparently using this new shake and cleanse system, called Isagenix, but he is radically altering the standard model with some magnificent early stage results. We cannot live on shakes and cleanses forever, so the good Dr. is experimenting with other clever ways to enhance the weight loss, and train the mind and body to live and eat normally while maintaining the initial loss. My nickname for Dr. Patty for some time now has been “Large”, but these days he is moving quickly towards a new name, more like “Medium”. I will keep you posted on this earth shattering new diet craze. If you have any input on the blog or the creation of the new dietary program please feel free to leave those comments below.
Happy Trading.