I expect a reversal from here to the close

You can play technicals for only so long-and they have played them about as far on the long side as any good trader would play. I would expect some to close out and take some profits. There is still a lot of uncertainty out there. lets see if they back off. They found the stops and the way down, lets see if they found the stops on the way up. Going to be interesting. lets watch.

At top of resistence: let's see if they can break it.

S&P500 1172 is the top ceiling. lets see if their little game can break it or the theives will scatter and turn on another.

They don't make it easy

We will probably be looking to get out of our short position. They are not making it easy on the long or short side. This thing may go either way. Gold is hitting new highs, proposed stike in Greece, Morgan Stanley may be investigated, blah blah blah- and the market is still holding strong (for now). We don't like 50-50 bets-not to mention going up against a market that has 4 top banks that just reported a quarter where not one of them had a losing day! I guess they were all on the same side of the trades. It makes it easier for them when the bad boys (Lehman and Bear Stearns) are out of their way. I can understand Goldman accomplishing such a feat; however, Bank of America and Citigroup? Hard to believe. They are normally on the losing side of trades. We are going to have to think this out. Either join them or get out of the way.

A Strange New Market Era: "Barter Town"

I have been talking about this all year with some of my friends at other institutions. We just couldn't put our finger on it- the market has been acting very strange since the beginning of the year (view the archives). It seems that everything is correlated and sometime artificial. I have been trading markets for 16 year-plus now and I have never quite seen anything like this year. Most stocks have not been moving independently and many actions have been suspicious. It has not seem like "normal" price action all year. I am not alone. Many traders on the floor with many more years experience than me have been scratching their heads. It is interesting to note that it is also doing this period that Goldman did lose 1-cent on any day in Q1. I know some very smart and much more nimble traders who at least was down 1 day! I'm not going to digress.......We now find out some exchanges and trading platforms decide to pull the plug whenever they want resulting in "Ghost Trades" and new "Circuit Breakers". Kind of reminds me of 'MAD MAX: Beyond Thunderdome". You remember when MastBlaster shut down "Barter Town" and asked Tina Turner's character..."Who control's barter town?". Well....Who controls the financial markets? We know it is not the majority anymore, we know it is not Congress, not The Senate, certainly not the general public. We know it was quoted that 73% of trade volume is now run by High Frequency trading and some top brokerage firms. What ever is happening, it is true that "MasterBlaster" what ever that is- Is running the show.

We are taking a chance here!

Check emails for updates. Bought more "TTT". We feel the exuberance over the trillion dollar bail-out is over done and the market is due for a pull-back. You never know in this environment though; given a small few control the direction of the markets these days. We think they will change their mind given the fundamentals. We are now 80% short. It is a dangerous game given the amount of short-term manipulation in the markets these days. Our computer systems are somewhat convinced and the volatility will give us a chance to bail if we have to. We are betting the "Big Boys" are going to fade this market in here. it just makes sense. it is the smart thing to do in here. let's hope we are right.

A Very Interesting Article on Last Week's Crash

Decide for yourself. It talks about manipulation. An interesting take on the events.

http://www.alternet.org/news/146793/was_last_week's_market_crash_a_direct_attack_by_financial_terrorists?page=1

New Trade: "TTT"

We couldn't help ourselves! We put on a new trade today. Check emails for update. This one seems like a no-brainer. We will see.

Monday Update

We don't do anything today-It is still Murky out there. Stay tuned.

The "JJJ" trade explained: 19% gain.

When we put on the "JJJ" trade, we noticed that THE SPREAD between the S&P500 (large cap stocks) and The Russell 2000 Index (small cap stocks) was considerably wide. The small cap stocks were trading at huge premiums compared to their large cap brethren. We were betting that gap would close given the uncertainty in the markets. Our computers were indicating a 75% probability of success. We were betting the Russell 2000 would go down to a more equal parity. We decided to play a stock that gave us 3X's down leverage on the Russell 2000. The stock was TZA. For every 1% the Russell 2000 went DOWN, we would be UP 3%. We decided on a 25% capital commitment. We bought at 6.45 yesterday and sold at 7.65 this morning. It was a nice 19% gain in 24 hours.

"JJJ" Trade just closed.

Will update later. I have to step out for a bit. A nice gain. We are now back in 100% cash.

We Don't Believe The Story

We saw on hundreds of stocks that "The Bid" disappeared. If it was not a system failure on the exchanges, I don't know what is. It was not just a few stocks. I see the "Spin" coming from the exchange bosses and don't buy it. it was a very scary time. You can pull up the 1 min. chart on almost any stock and see that the system shut down for a few minutes. We saw it and our friends at other locations saw it. I have never seen or heard anything like this before. This was the day "The Matrix" sputtered. We are not sure what this means. We will do a full due-diligence on what happened today. Stay tuned.

"Ghost Trades" NYSE steps away!

The NYSE said it stepped away from bids for 90 seconds and the trades went to other exchanges to get filled, thus printing "Ghost Trades" with little or no volume or bids at other exchanges. Are you kidding me?! They are supposed to be specialists and working the book- you can't just "step away"! This is ridiculous! What is wrong with our system today? The confidence in our exchanges just took another big hit today. A big score for the "trading gamers" and "black box flash traders" Who is in control? The NYSE and NASDAQ were a joke today. A real shame!

P.S. The Down 1000 points is a misprint. Thanks NYSE and NASDAQ! The "Ghosts" got you again.

Market Update: Wow! Something is Fishy!

If you were watching the market today, it had to be the one of the most violent swings I have ever seen. it shows how much computer trading has evolved and involved into/in the market. It does not instill a lot of trust in the systems. It was down 700 points in 15 minutes and up 600 points in the next 20 minutes. Seems very fishy. It would have been nice to sell out "JJJ" trade at the top; however, I don't think it would have been filled. The point is "a Fat finger" trading mistake or not-people are selling. The market looks very unstable here. We are up 9% on our spread trade; however , I am not willing to pull it off just yet. The Market Systems are screwed up. Given the current environment, I am not sure that we even want to bottom fish until the "Mystery Hour" we experienced today can be explained. It shows investors are very nervous about the current levels. We remain in CASH except for our "Spread Trade". We are not in a big hurry to play in this "Murky Sludge". If we see something crazy, we might play. Check emails for updates.

"JJJ" up 17% today-so far!

Holy Cow! What to do now. Check emails and be ready!

WOW! WOW!

WE ARE SCORING!!!!!!!!!!

Wow! The spread is narrowing very fast!

We are up 7% on our "JJJ" spread already! Looking Good!

The "JJJ" Relative Value Spread Trade

Our computers are showing the spread between the two asset categories should narrow to the point where our trade may make 30% in the short term (75% probability) as it closes more towards parity. We will keep that as our target for now. We may add more. Check emails.

New Trade: "JJJ" Spread Trade

We put on a new trade today- "JJJ". It is a "Relative Value" SPREAD trade. We believe one asset is overvalued compared to another. The spread is very wide and we are betting that it will narrow substantually over the next few weeks. Check emails for details.

We continue to be 100% CASH

We still are not willing to commit any capital in this environment until our targets are hit. Check emails. We may change quickly as we continue to sell off. Enjoy Cinco de Mayo!

CNO Update

Looks like our computer systems were correct; however, we could not risk it. Oh well, we folded our hand early with a minimal hit. At least we know they are working.

Market Update and Targets

Check your emails for supports and targets.

Why we put a "SELL" on the market 4/28/2010

When the Federal Reserve failed to raise interest rates at their meeting, it seemed strange. If the economy was doing so great-Why no raise? As it turned out. They may have known about problems with Greece and how deep they really turned out to be. Wall Street was way too extended.

Too Choppy: Sold CNO @ 5.93

Doesn't look good out there. We will take our 1.5% loss and wait. The market is in strange days. Check emails. Update later.

PLSN: Is Paulson, which is CNO

We are playing CNO. ( We decided to share our trades for awhile to add drama and improve the website). We bought today at 6.02. The Earnings come out Tuesday (after close) with a .13 estimate. We chose not to play SIRI; although, it may hit 1.40 as they report earnings Tuesday. Too many "retail" in the trade. Our computers give CNO a better "play rating" than SIRI. Our computers are looking for an "above 7" if the earnings play out. CNO did disappoint last time-and disappointments are like cockroaches-never just one. We will go with our computer program here and see if it works. Paulson owns 5% plus of company (at last filing). This will be another test of our systems. I don't want to play-the computers do.

New Trade: We are going to play earnings

Check emails for details. We have played this one before. Let's call it: " PLSN ". The computers give it a green light and their earnings will be out within 48 hours. We will play quick moves on earnings even though our "sell" rating on the market has not changed as of now.