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Wednesday, April 28, 2010

LOOK IN THE MIRROR

The main topic today will be the hearings from yesterday, but first to the charts.


Here is the waterfall from yesterday which we "knew" would lead to a bounce today at the beginning as we are seeing here. The question is will the bounce be sold or bought. I thought sell initially which is why I have it labeled as such. This has already happened now that I am posting this. The comment on the chart was for day trading not holding. We went down and are now rising so I think we probably have our answer that this was a one day wonder. We had light rain here in San Diego and my Satellite internet always goes out due to rain fade anytime there is any moisture in the air. As a result, there was a lag in me getting this up today.

Whether or not they sell this hard or not at all will give us a good guage of whether yesterday was a one day wonder or not. Most of the things I watch say to look to short rallies up towards the highs now, so that will be my approach. This house of cards may not yet tumble, but is it one of the biggest if not the single biggest air pockets I have ever seen in stocks. Even if you are of the thought that the economy is improving some, stock prices are very extended upward right now.

You can see how well that VXX trade I did worked yesterday that I mentioned here below. We certainly had a timely return to volatility. I hate taking profits that fast, but when you are trading against really strong trends and get a move than returns way more than double the risk, you need to take the money. This is true even if it happens in a few hours. Had this been a trade that was in sync with the larger trend, I would have held it longer. It was about 5k in profits, so not bad for being an idiot trading against the trend for a few hours trouble.



I do think there is more downside to come for the overall market but I have no idea if it will come today or we will bounce first. It was ironic that yesterday the very executors of the PPT transactions were grilled by those lazy fat assess in congress. I would love it if just one wise guy would break rank and ask why they are not equally critical of their futures buy program trades that were ordered by them during the fall that lost money and required tax payer money to cover?

Here is what I would have said to Carl Fatvin ( Levin ). So you say this was a shitty product and we misrepresented it to the public, how is that different from what you did with the healthcare bill? When you ran an investment bank and sold products to the public, how did you structure them and market them? Oh, you did not run an investment bank? What would qualify you to evaluate one's practices a textbook you read Cliff Notes on? What about the Dunkin donuts or Twinkies you obviously eat every day, who pays for those, taxpayers?

It would be nice if just one of these guys would have some guts to tell these jerkoffs to kiss their ass. However, the reality of all of this is Barry's folks had a talk with all of these guys and told them to just bite their tongues, take the tongue lashing, then it would be back to business as usual once the pubic has been deceived again. They have to appear to be doing something to attack these god awful people that have the nerve to make profits. The bonuses will still be there as long as you keep quiet about our little arrangement etc..

At some point people have to be responsible for what they do. If you lost money betting on mortgages you were greedy and stupid, PERIOD. There has never been a more obvious bubble in history than the housing bubble. You are responsible for being stupid not someone else. I have a friend who runs a mortgage fund that has been successful for years. He had encouraged me to invest in it and that he had taken into account what was coming. I told him I just could not in good conscience put money into an area that I knew was going to get wiped out. Ironically, his fund did survive and only had it's returns drop down a couple of % points.

The point is that it was so clear to me not to touch real estate, and I know Jack s.... about real estate. It was just obviously an overdone price extension and that is something I know a thing or two about. Net net, investors who bought these products from Goldman regardless of what else went on were greedy or stupid or both. It is not Goldman's fault or yours or mine that they lost. There is risk in almost anything, deal with it. So what if someone said behind someones back the product was shitty, or course it was. Fast food employees spit into food also. There are people in the world that do and say the wrong things. You need to be careful with your money, dont let people decieve you. If something seems to good to be true it most likely is. Greed will clean you out 100% of the time, no exceptions. It is not easy to make alot of money, yet we all look for the shortcut to doing so.

Don't be greedy, I was not yesterday in the VXX trade. Yes I could have made more money if I held on but I followed my plan to exit at certain levels and surprisingly those levels came up in one day instead of 3, so much the better. That does not mean since it happened so fast I would go for more. it means I have a well executed trade in the bank, done, on to the next one. It is hard to trade after a day like that so there is not alot new to look at for today. I do have a couple of shorts in stocks left over and am short the British Pound, that is all I have going right now.


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