Weekend Reading

First the ROSE colored glasses obama's budget and econ team is wearing

Per budget estimate

REAL GDP:

2008 1.30
2009 (1.20)
2010 3.20
2011 4.00
2012 4.60
2013 4.20

How can anyone believe these #'s...they cant even get their stats right on 08

per bloomy

Annualized               4Q      4Q      3Q      2Q      1Q      4Q      3Q
 Quarterly Change-  Prelim. Advance  2008    2008    2008    2007    2007
===============================================================================
Real GDP                  -6.2%   -3.8%   -0.5%    2.8%    0.9%   -0.2%    4.8%
YOY percent             -0.8%   -0.2%    0.7%    2.1%    2.5%    2.3

Pretty dreamy i say...BTW CNBC still looking for second half 08 "recovery"...but now they call it second half 09...looks like bam bam is doing the same...I pray he does not watch that channel nor listen to any of those pump monkey liars

Unemp figures

09 8.1
10 7.9
11 7.1
12 6.0
13 5.2
14 5.0
15 5.0
16 5.0

I believe we will be 10%+ perhaps by end of 09...the unemployment rate is already 7.6%

Perhaps the most dangerous assumption of this budget is the rate at which the gov't will have to pay...with record treasury issuance on deck look at the fearless forcast of bambam and crew

10 YEAR Treasury
'08 3.7%
09 2.8
10 4.0
11 4.8
12 5.1
13 5.2
14 5.2
15 5.2
16 5.2

UMM despite record lows in the equity markets the 10 year closed above 3%...AND THEY HAVE YET TO ISSUE A LARGE PORTION OF THE PAPER

for more on the treasury stuff check out across the curve

"Regarding that supply one economist with whom I speak believes that at some point this year the Treasury will sell Long Bonds on a monthly basis (currently eight times per year) and in a back to the future moment will seriously weigh reintroducing 4 year notes and 20 year bonds on a quarterly cycle."

here is full text of budget if you wish to check it out: I love the title and it seems a bit ironic to me...

UPDATES TO EURO ZONE

IRELAND ON BRINK OF COLLAPSE

Breaking point for the eurozone?

Ireland's 'miracle' economy has turned terrifyingly sour - and as it strains against the inflexibility of the euro, its next crisis may shake the entire EU.

in the irony/arrogance/taxpayer gets shafted catagory


AIG Rescue May Include Credit-Default Swap Backstop (Update1)

Email | Print | A A A

By Hugh Son and Zachary R. Mider

Feb. 26 (Bloomberg) -- American International Group Inc. may get a backstop from the U.S. to protect against further losses on credit-default swaps, according to a person familiar with the matter.

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This is truly scary and really pisses me off...we have poured so much money down this shithole and now we have to back their speculative leveraged bets on the financial soundness of companies...At least paulson (who was an a-hole crook) didnt pass off the taxpayer as the ultimate bagholder...And dont even get me started on the stress test fraud...Japan scenerio is now the best we can hope for...I wont even tell you the worst...

And no one seems upset about the C deal...Govt really cornholed us on that deal...conversion of our pref shares paying a 5% coupon to common dogcrap that pays nothing...I am sick of all this crap...

I almost hope for a bond market dislocation to teach these arrogant a-holes who love to spend our money and leave us with empty rhetoric a lesson they will not forget...how this all ends i do not know...but i do know it wont end well...

Another Worthy READ

'There will be blood'

Harvard economic historian Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession' ends

and with this i shall stop for now...got some more articles that are worthy of a read but i got to go now and will post them later...

out of the last of my calls

tough lesson...waiting to see if anything catches my eye...

the violence in treasuries is pretty nutty

tnx and fvx above yesterdays highs...huge spike near the open in 3 5 min bars

no flight to safety which is a bit troubling...

here is an old screen shot from 10.08.08 when i remember similar moves in equity/bonds...it was a pivotal day


and here is today



interesting...wonder how this resolves itself...last time it wasnt good

Bill Miller Outlook

I find it good to read all the peoples I can...Draw your own conclusions

http://www.leggmason.com/individualinvestors/documents/insights/D7407-Bill_Miller_Commentary.pdf

And something funny i sniped from the TF bar...dont ask me why i include this and ole Billy in the same post

Testing Salesforce.com does what?

http://finance.yahoo.com/news/Salesforcecom-shares-slip-on-apf-14487635.html

"Salesforce.com shares slip on lowered forecast despite better-than-expected 4Q results"

Or so they say. I don't follow CRM but others do, and this is just a test posting anyways.

Sometimes Bold is Bad

I must submit that I made a bad mistake today...as soon as we were approaching that 78.3 level I should have stuck a trailer about .10 to .15 below every single long position I owned and let myself get taken out if we fail (which we did)...instead I only took some profits and now regret it...Not much good i can say about today's action...and with the put call so low if GDP comes in bad we really could dump...I chose to ignore put call thinking I could squeeze a few more dollars out of what had been a really nice series of trades with really good entries...oh well live and learn...still have a small long position but not very thrilled about it...The only good thing i can say about this market action today is that we held the 75.6 ish line which is also yesterdays low...

Pretty Uninspired so Far Today

trying to decide what to do...

selling half of my remaining calls.

75's @4 2.46 EST

Sold some 75's

some at 5 and a few more at 4.9 10.51 est

i am worried by the very low put/call reading and fail again at 78.3

still have about 20 75's and 76's left

http://stockcharts.com/h-sc/ui?s=$CPC&p=D&yr=1&mn=0&dy=0&id=p37992190408

Another Crazy Day

First a Video for your Enjoyment from Tim Knight

I don't know if I am viewing things through rose colored glasses (something few have rarely accused me of recently) or what...i just sort of felt that today was a constructive day for a short term bullish case...we put in a set of higher highs and higher lows...we managed to get the put call to tick up a bit (although still below 1) and in the end all we got was a baby doji...notice we failed right at the 78.2 level i had previously mentioned but more importantly we held the 75.7 ish area and managed significant bounces off it...sure i would have loved to see us break that 78.2 level but hey...i continue to believe in the short term the odds favor a continued upside



here is another fun chart to look at that also helps to mark significant market events...



Anyway these are just my feelings and interpretations of the odds...I will not get married to this bullish short-term thesis rather if the market tells me I am wrong then i will cut and run...

Remember we got jobs # tomorrow...per bloomy consensus is 625k with range of 595-671

Friday we have GDP...I do think though that BamBam and Turbo Tax need to use this time quickly to come out with a viable plan...I find it disgusting that the stress test results will not be made public, yet they will be taking the public's funds to recap these insolvent pigs AGAIN...but yeah its change right...anyway i also heard that worst case scenario for the test is using unemp at 10%...i do believe it gets worse than that...they are also assuming a home price fall of 20%...from where i do not know...we have huge problems not only in the us but also ROW so i will try not to overstay my boolish welcome...

if you wish to read up on the ROW (well in this case EUR GBP RUS problems here is a quick thing i put together for the LIONscammer (errr spammer) forum a week or so ago

http://www.thelion.com/bin/forum.cgi?tf=team_teflon4x&msg=331&cmd=r&t=

and a video of spanish ghost town

Taking a lil profit

out of 1/2 the spy 75's at 4.4 13.49 EST

dumped a few spy 76's too at 3.85 13.49 EST

still holding a decent size long call position just want to lock in a lil daily profit

Added some march 75 calls on the spy

will give these a lil while...update when i close em out

edit: CLOSED OUT 1/3 AT 4.3 11.45 EST

edit2: bot 75's back at 3.8 12.53 EST

Some of the things I watch

I am going to try to do daily (or more) updates/re-caps...so today will be the first one

I will not lay claims to trades i did not publish here but here are some things to chew on

these are the main things i watch for macro swing trades...basically i like to wait for extremes and take the other side of the trade


First the McClellan which i view as one of the best indicators out there...it really helps to catch tops and bottoms...you can see how well it worked in nov. and also topped out in early Jan...

Now the daily stochs on the spy




i expect some follow through on this move...it will not come all at once and nothing goes in a straight line but we do have a rather large gap to fill that might act as a magnet



Here Is a more detailed 15min 5 day that i use as a primary chart everyday so it has more detailed s/r levels that i have added over the months as the become important


Now the one thing that gives me pause about this bounce is the put call never spiked to areas of previous significant bottoms



Likely this means less shorts are in the market and as you can see today put/call is back below one which again gives me pause...shhh dont tell Chris Cox or Jim Cramer but having a ton of put buyers/shorts in the market simply will add fuel to a rally as they are preloaded bids...usually it is only after shorts get shaken out that the real tankage begins...so I would say for this rally to continue we will need true believers & organic buyers...perhaps the double bottom perception will aid in sucking in new bulls

I believe odds favor continuation in the mid term (say like a week or so) and i still have some spy calls left...looking at the spoos overnight we are down about 10 handles below the cash close...but from most of what i look at we are still near/mid term oversold...we will not go straight up but i will be watching near term trendlines closely and prolly have a bias to add to long positions on weakness although I am not super aggresive as a long...beware tho we do have econ data coming thursday and friday which also worries me a bit


I am going to try to update this blog everyday and use it as a way to clarify my positions/thoughts on the market