This was your Barron’s headline cover on Saturday. Yes I know they will say they have a “long term view” and don’t care about those silly little market fluctuations. In full perma bull style, stocks are always a buy right? Dips are just an annoyance and temporary at best. It is Abbey Joe Cohen’s favorite place to make grandiose predictions that are always downgraded at a later date. But they sounded good at he time I guess.

We have seen all the big boys report earnings now, $GS, $BAC, $C, $WFC and $JPM.  As usual, Morgan Stanley $MS always reports last and is usually the victim of a bad tailwind.

Banks are utilities and should trade that way. There should be no surprise that they are failing and will most likely continue to do so. Here are some thoughts I penned back in early June.

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I just want to talk some reality for a minute. If you’re one of those people that travels to Berkshire Hathaway headquarters in Omaha to hang on every word Warren speaks, you will not find value in the following. Hey, to take it a step further, if you’re a value buyer, you won’t find this useful.

I am far from an expert on Buffet, but I know when some one is bought and paid for. Today the Oracle pulled off another doozy of a deal for himself and Berkshire shareholders. He bought a ton of Bank America preferred shares with lucrative kickers and a nice interest rate. Warrants attached are always nice too. The Oracle said he got the idea while sitting in his bathtub the other night. Frankly, my visual has him with a rubber ducky while he sips his dinner through a crazy straw.

Hmm, is it fiduciarily responsible to decide to blow five billion while playing battleship in your bathtub? Buffet must have done a ton of due dilly,(he said he got the idea just the other day) as his rubber ducky invaded Normandy Beach while he made splashy sounds and bombing noises. Am I being a conspiracy theorist? Am I being a Geithner truther? Did Warren get “called for” like Pacino’s character in Donnie Brasco, by the Don in Washington again? Was it optically better for Warren to come to the rescue of $BAC  “on his own” after his bath tub epiphany, or for Timmy to have to act? Hey baby, we’ll never know now. Who says trading is boring? Grassy knolls were never my thing, but this one smells. But that’s just me.

If you topped ticked Bank of America today, I wish you well. Let’s not forget that when Buffet made the greatest deal in the history of” loan sharkery” in Sept of 2008, ( $GS) and you followed, well, look at the charts. The stock traded from $137 to about $47. Warren made a fortune. Did you?

Back in 1987, when the world at the time was coming to an end, Salomon Brothers had deep issues. Not only was the market in trouble , but Solly was fighting off an unfriendly takeover from Ron Perelman. Buffet invested $700 million, got paid a 9% coupon and was convertible at $38 after three years. The deal went through , but in 1991 Solomon was accused of breaking the Treasury bidding rules and the stock imploded. Long story short it took Buffet ten years to get his money out. His $700 million was worth about $1.7 billion, but it took a while and Solly almost went BK in the process. It ended up getting bought by Travelers which ended up getting bought by Citibank, $C . You would have lost a lot of money piggy backing Warren depending on your time frame. Again, Warren made money.

Whats my point? Everything in trading is about time frame. What is your time frame? A day, a month, a year or ten years? It’s important. Buffet will invariably make boatloads on BAC. The greatest fade of a market move I made all year was today, by shorting that rip in financials, my subscribers made about 7-9 points long FAZ, which is the ETF that shorts the financials. I posted on Twitter just after the open today the what is good for Buffet is not necessarily good for the financials as a sector. I was right and that makes me happy.

Buffet isn’t looking for a flip here, maybe you shouldn’t be either. It’s all about your time frame though.

P.S. Please don’t email about how Buffet is the greatest thing since the topsy turvy tomato grower. He may make you money, but he’s just not my style.

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If you  don’t read the newspaper, you are uninformed; if you do read the newspaper,  you are misinformed.– Mark Twain

This market has been on max overdrive without any real let up until recently.  The bears get a day of victory on seldom occasion only to have the bulls step up and buy their stock cheaper. It’s been a buy the dip market of biblical proportions. The rips get sold, but then accumulated on pullbacks with almost precise execution. Have we topped, are we topping or is this a whole lot of nothing?  Are we entering a “sell the dip”phase?  When dips don’t get bought, it doesn’t just imply a problem, but shouts it from the mountain top.

Several examples of this possible new trend are discussed below.

The financials happen to be my affliction, I have hated the group since the toxic days (still toxic) of 2007-8 and I still dislike the sector. Without going off on a rant as to the why of my opinion, suffice to say the group looks stinky at best here on the weekly chart. We have seen the market rally without the financials, but what happens to Mr. Market when and if the group just rolls over? See BAC, JPM & WFC. I have traded $FAZ often over the last few months, picking off a point or two here and there, and stopped on occasion, but gun to my head I see lower prices. No dips getting bought. I am long FAZ.

XLB

The material sector has always been one of my favorite sectors and I usually play the long side via $UYM and short via $SMN.  As the dollar has found some near term strength, this sector has been diving, no buy the dippers yet either.

XLE

Energy is also one of my favorite sectors and we have traded ERX from the long side over the last few months, but with the greenback up, energy is down for now. No takers, no real dip buyers, but many traders are whipping the group around. It has been a good “trading” group.

XME

Metals & mining are also rolling over. No dip buyers yet.

RTH

No real validation of a breakdown at all yet on retail. Friday was bad, but as I said, one day does not a trend change make. It bears watching though.

The charts on steel (SLX) and coal (KOL) look very vulnerable too. Technology (XLK) is struggling, with names like AAPL and GOOG weak and AMZN showing signs of quitting. AAPL and GOOG both got rejected and sold at moving average resistance on Friday, another sign of waning conviction.

We live in a world now where keg beer gets poured from bottom to top and tomatoes grow from top to bottom, so it’s easy to get caught on the wrong side. So much also depends on the direction of the greenback, so all of these moving parts will certainly make the balance of this year very challenging. If the dollar does decide to roll over again, this pullback will have been nothing more than a great buying opportunity, Stay tuned. Good trading and watch your levels.

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WFC

BAC

The financials look very heavy here and as I mentioned in last night’s post they may give us an idea where it is they are heading soon. We have been long FAZ for a few days, but WFC and BAC jumped out as short setups if things get ugly.

$WFC is hanging on moving average support on the weekly and may get a bounce, but if it doesn’t I will get short. $BAC just looks horrible and could roll lower if it breaks that $12.15 level.

These are just some levels and ideas that I am watching. Good trading.

It’s hard to believe, but March 6 marks the one year anniversary of the now famous 666 low. Armageddon was at the doorstep, but it actually marked the beginning of one of the greatest rallies in the market’s history. The quickest one too.

In Roman times the expression “Ides of March” didn’t necessarily invoke a dark mood, it simply was a way of saying March15, “Kalends” meant the first day and “Nones” meant the 7th day. So it’s just one of a dozen Ides that occur throughout the year. March just wasn’t a good one for Caesar.

Enjoy the links

The next Greece search is on-Japan?

The New Poor

Wells Fargo wants to be JP Morgan

Paulson’s buying up Arizona, Colorado and Nevada

The Secret Service is on an 80′s mainframe.

The man who hunted Madoff

SAC Capital’s Steve Cohen breaks the code of silence.

Gore films getting banned in the UK

A Jihad on Switzerland?

The Greek Tragedy is just the first act.

A parable on financial ruin by Charly Munger.

Lingerie model ran a coke mule operation and it was big.

Short selling restrictions and market crashes.

My favorite lolly pop kid, Timmy Geithner appears on the Hill next week to discuss the “don’t tell anyone about AIG” matter and his good pal Hammerin Hank Paulson was also given an invite to appear. If you believe Timmy’s rebuttal to all this, than you also believe that he didn’t understand Turbo Tax and that pigs can fly.

Futures are down slightly in front of the Citigroup number and earnings reports go full steam this week. Citi is expected to report its tenth consecutive quarterly loss this morning. Such a well run bank. We see IBM after the close today and WFC, GS,GE, BAC and GOOG all report this week.

In the “you can’t make this stuff up department”,

The International Builders’ Show will go on this week in Vegas without its signature exhibit, The New American Home, which for years has served as a showcase for some of the latest trends in building, design and home products.

The private lender financing the project ran into credit problems and had to withdraw funding, according to the show’s Web site.

Tuesday, January 19, 2010

It was a sloppy week for the market and an ongoing nightmare for the people in Haiti, aid pours in, but bodies pile up. The government is taxing the banks, even if they weren’t TARP babies and if you work for a union you don’t have to pay taxes on your insurance. Brown is ahead in Massachusetts and Google flipped China the bird.

1120-30 are the support levels to watch for the S&P, and the financials, which have played a leadership role since the month began, are acting a little soft. JP Morgan, which beat earnings nicely, showed softness on the top line by about one $billion, which set off selling in the sector yesterday. Citigroup reports Tuesday before the open and we see WFC and BAC next week. It will definitely be an active ride as earnings start to hit their stride. Good luck and have a great extended weekend.

Hedge funds are licking their chops and are waiting for the money to pour in.

Rosenberg’s “Not So Great Depression”

15 books every entrepreneur should read.

The Tweeting car.

Why mortgage modifications are a farce and why Wells Fargo should be ashamed.

When government picks.

30% of Florida’s crops may have been lost in the freeze.

It ain’t just Cali, more states on the brink.

Gotta blame something.

Haiti-Will the gangs take over?

The Shanghai bubble.

AT&T rolls out cheaper plans for your mobile devices.

Han Han, the daring Chinese blogger.

The Nexus One and Android are beating iPhone in the geek polls.

The top 100 liberals and conservatives.

Is AIG worthless or not?

Taking your 401k.

Coakley is dying on the vine.

More Americans went uninsured. Crossing their fingers.

Hedge funds returned 25% in 2009.

China-it comes down to trust.

Google and Islam.

A Massachusetts democrat’s view on Obamacare and Brown.

Soda Pop

Finding Hendrix.

I never saw a bad Denzel movie.

Jack is back!!

The return of Gordon Gekko.

Tiger’s in sex rehab.

Weight Watchers floor collapses.

“Avatar” depression.

“Book him Dano”

Eye test that spots Alzheimer’s 20 years before symptoms.

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A party line approval clears the way for a Senate vote on the landmark healthcare bill by Christmas Eve as the last of our spineless Senators has fallen in line.

Copper and gold are advancing this morning, both are  oversold short term, so look for the bounce there to possibly grab some legs. Alcoa (AA) and Massey(MEE) have nice chart patterns in the commodity space.

Another Holiday trading week is upon us and although volume will be light, I have a feeling Santa will sprinkle some bullish love dust on the market this week.

Barrons was bullish on WFC, BAC and JPM and said their shares could rise 80% in two years, I guess a double would have been a stretch. Watch the insurance stocks this week off the healtcare news, they may still play here.

And don’t forget to try and do something nice for someone this week, you’ll feel like a million and it Tis the Season. Let’s have a great week.

Monday, December 21, 2009

Climatehagen was another fail for the Administration, Iran played capture the flag with an Iraqi oil well and the greenback is actually becoming short term overbought.

Have a Merry Christmas and a Blessed Holiday Season. I just bought my first snow blower.

The Nebraska Purchase

Iran must be grumpy this week.

If it’s a million it’s a short.

Stevie Cohen’s wife is pissed and she’s talking.

GAO will investigate ACORN.

Cher moves out on Citadel’s Griffin.

Obama’s big sellout.

Gore’s fuzzy math.

Citi’s $38 billion envelope.

Gore does his best Shelley to a fawning Smith. Laughable and sad. (video) Love the acid sea.

Fund of funds lose assets as industry grows.

9 months after Porkulus, 49 of 50 states lose jobs.

“Crazyheart” update

Joan Jett is back.

What is “fracking” ? it could kill the Exxon/XTO deal.

Elvis at 21.

The race to the bottom in 09.

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