'Hasta la vista, baby'

SAN FRANCISCO (Reuters) – California prepared on Tuesday to resort to issuing IOUs as the giant but cash-strapped U.S. state struggled to approve a new budget in time for the new fiscal year that begins on Wednesday.

The old "Terminator" ain't looking so good these days is he yikes! You know they say trends start in California and spread out to the rest of the United States from there. Man I hope not!

The market fell out of bed this morning and flopped around on the floor all day with a very minor pop near the end of the day. I don't see any good setups for tomorrow but I think the fund managers are done screwing around with their portfolios to make themselves look good so maybe trading will smooth out a bit. Good Luck.

Ina Gada Davida Baby!

For those of you old enough like me to remember this movie, this is the one where they dump acid in the water supply and everyone starts acting nuts. Well life imitates art again with the House of Representative passing HR2454 popularly called Cap and Trade. This bill will;

* Not stop Global Warming (its baloney anyway)
* Drive manufacturing out of the USA
* Cost each family $1800 in additional taxes

Please contact your Senator and tell them to drop the acid on their own time at home and NOT TO VOTE YES for this bill. Here is the link to contact them http://www.senate.gov/general/contact_information/senators_cfm.cfm

Enough of my soapbox, tomorrow go long GG @ 36.57

Enter the Dragon

Listen to what Dr Doom( Nouriel Roubini) has to say grasshopper;

I discussed a few weeks ago in a New York Times op-ed the Chinese are flexing their muscles on the question of the global reserve currency system dominated by the dollar. The process that will lead - in the medium-long term - to a challenge of the US dollar as the major global reserve currency has started. The US creditors - the BRICs, the Gulf states and others - are becoming increasingly alarmed that the US will deal with its unsustainable fiscal path via inflation and debasement of the value of the dollar via depreciation. So they will not sit idly waiting for this to happen.

This brings new meaning to the phrase "Paybacks are a bitch!".

No picks today as we hover at strong resistance @ 923 on the S&P. Should be a very interesting short week. If you need me I will be practicing using my chop sticks.

The Power of 3

Its creepy isnt it and it never fails. We will miss you guys!




Todays pick is long FAZ @ 5.26 Good Luck!

The Sins of the Fathers

One of my favorite Night Gallery episodes documenting the ancient ritual of the peasants forced to eat the sins of the rich so they could rest in peace after death. Once again life imitates art.

WASHINGTON (Reuters) - The U.S. government will "very soon" launch its program to use federal funds and private capital to buy banks' toxic assets, the new overseer of the government's $700-billion bank bailout fund said on Tuesday.



Meanwhile back at the ranch today's picks are DUG long @ 19.72 REW long @ 42.15 and TZA long @ 25.27 Good Luck!

Smells like an Italian Beef Sandwich

You know the world out there really makes this to easy! Read this headline;

TORONTO (Reuters) – Canadian scientists are breeding a special type of cow designed to burp less, a breakthrough that could reduce a big source of greenhouse gases responsible for global warming.

No offense to the tree-huggers but I believe global warming is a bunch horse sh*t, not caused by cow sh*t, but that's a whole other story.

Meanwhile back at the ranch we had a consolidation day just like I expected. Maybe tomorrow when helicopter Ben speaks we may get some action. Tomorrows picks are DUG long @ 20.18 and FAZ long @ 5.51 Good Luck!

Its Official!

On June 11th I announced my new technical analysis technique of correlating market tops with fallen beauty queens (its just as random as any of the other "scientific" techniques). Low and behold I pegged the top exactly! The close of the S&P below the 200SMA yesterday confirmed the call. Since I invented it I get to name it so from here on out I will refer to this market study as Cleveology. Just call me Dr Boob! Now I must be off to work on my new theory for calling market bottoms, need a name though Tushology, Bootyology, I dunno I will come up with something by then.

No picks today I just expect some consolidation before more Fed baloney. Good Luck!

Ka Ching

REW filled this morning @41.70 and now its time to get out @ 42.40. Need I say more? Good luck.

Indian Summer

Don't let the talking heads lull you into a slumber. Everywhere I look everyone I hear on the boob tube is saying the worst is over for the economy. But I ain't buying what they are selling and I think the worst is yet to come.

Today the market is breaking to the downside and is hovering at the 200SMA as I type. This could be the start of a very brutal winter.

Today's pick is long REW @ 41.70 Good Luck!

Life is good for the "Bailed Out"

(Reuters) – Chief executives of some banks that received federal money, including Bank of America Corp, Morgan Stanley and Regions Financial Corp, used company jets for their personal use, the Wall Street Journal reported on its website.

Flight records showed many occasions when banks receiving federal money flew their planes to destinations near resorts or executives' vacation homes in Europe, Mexico, the Caribbean, south Florida and Aspen, according to the paper.

I don't know about you but I'm lighting my torch, sharpening my pitchfork, and buying some rope!

No good setups today and trading should be weird after options expiration so I will be watching the market from my beachfront cabana.

Yo ho ho and a bottle of Rum

WASHINGTON -- After a fairly smooth opening, President Barack Obama faces new concerns among the American public about the budget deficit and government intervention in the economy as he works to enact ambitious health and energy legislation, a new Wall Street Journal/NBC News poll finds.

Well its about damn time people! And guess who gets the bill when the hangover kicks in.

A couple of picks for this morning long FAZ @ 5.38 REW @ 42.12 and TZA @ 24.51

Good Luck!

Who Cares!

Legendary Chicago Cub Sammy Sosa is now accused of testing positive for a performance-enhancing drug in 2003, according to the New York Times.

Really! Duh I'm crushed.

Is the world really that stupid that you don't think professional athletes do steroids, politicians take bribes, foreign elections are manipulated by the CIA, American Idol is fixed! Oh I guess they are.

For the small minority of us that woke up from the fluoride induced haze today's trade is to go long UUP @ 24.15 Good Luck.

The Cask of Amontillado

Life imitates art and as in the Edgar Allen Poe classic Montresor seals the drunken Fortunato in the winery so do the BRIC (Brazil, Russia, India, China) participants with the foolish USA as they discuss moving away from the dollar as the reserve currency.

Russian President Dmitry Medvedev will raise the issue of a global reserve currency at the meeting, top economic aide Arkady Dvorkovich, said.

Dvorkovich said BRIC leaders -- who control nearly $3 trillion in foreign currency reserves would also discuss the idea of investing their reserves in each other's currencies.

Oh what interesting times I live in!

Yesterday we did some serious damage to the endless bull run from last March but we are still above key support levels. It will be interesting to see what unfolds this week. Our FXF trade is still alive and kicking. Good Luck!

Dead Beat

Don't know if you saw this one yet but Bugs here is running away from his debts. "This isn't a liquidation," said CEO Mark Shapiro. "This is about the past. This is about debt that's been around for just too long." Thats awesome can I use that line too. You know Mr Mortgage company all that money I owe for my house is getting a little old and smelly so I don't want to pay it any more. Oh and this isn't a liquidation I still get to keep my house. You cant make this stuff up.

Meanwhile back at the ranch our GLD position was stopped out bwhaa, but our Swiss Francs are still rockin. Good Luck!

Cooking the books

Not to get all political on you but HR 1207 the Federal Reserve Transparency Act is slated to go up for debate before the House of Representatives very soon. You know those are the guys that create money out of their butt and then charge us interest on it. I always admire a good scam! You wont see this anywhere on TV because "they" don't want you to.

It asks silly questions like;

How much money have you dudes printed?
Who did you give all this loot to?
How about you let me take a gander at that ledger over there?

From early reports if I ran my business like they do I would be run out of town on a rail.

Maybe this is what the market needs to kick it in the butt and do something one way or the other. Good luck!

Explaining the economy to Mom

Ma asked me to explain to her how we got into the mess we were in. Well think of it like the banks gave a bunch credit cards out to people who they really shouldn't have. They made lots of fees and commission's. "Like your unemployed friend Joey that lives in his mothers basement and plays Xbox all day?". " Yeah like Joey". Well think of it like everyone charged their houses on these cards because they knew that in a few years they could sell their house for more money, pay off the card, and charge a bigger one on it. Well then the housing market started to drop and pretty soon no one could pay off their cards. The banks started freaking out and ran to the government for help. The government told the people that these banks were to big to fail. The government then created their own credit card called TARP and gave it to the banks to keep their businesses running and help the people. Did they help the people? No they just kept the money to make their businesses look better. Ok so who is going to pay off the card the government gave out. The US taxpayer mom. "That sucks!"

Looks like more sideways action today as well and we haven't hit any of our stops yet so I'm gonna take a nap.

Statistical Analysis

Ok work with me here. I am trying to correlate market tops with the dethroning of beauty pageant queens. Since Carrie just got thrown under the bus this morning I'm guessing this signifies the top of the current bear market rally. And just to throw a shred of credibility in here Chris Puplava of Financial Sense has the following to say; "While a top was not seen in May, the markets still show a similar path to the 1929-1930 analogy, which witnessed a second peak that was slightly below its 200d MA, and would call for a sell off here that would lead the market to roughly 20% below its 200d MA, which would correspond to a move to roughly 732 on the S&P 500". If I'm right maybe I can get a bunch of cool gigs on TV like Dr Nouriel Roubini and instead of call me "Dr Doom" I can be called "Dr Boob"! Meanwhile both our trades are recovering nicely. Good luck!

Weebles wobble but they don't fall over

Right back to 940 like nothin happened. You could draw a line flatter than Jimmy Hoffa's pulse through the center of the price movements of the S&P for the last few days. You think they are waiting for Kimmy to shoot a rocket at Palin before they let the bottom drop out of this thing? You know she can see rice patties from her house. Who knows. Our trades pretty much did nothing today. See ya tomorrow.

Daddy teaches son to shoot

A rite of passage but in this case they are using nuclear weapons. What a kookola that Kimmy is! Keep you eyes glued to the east for the glow of fried rice. Meanwhile our trades are consolidating hopefully for a move higher. Huge 20 point sell off of the S&P at the open maybe everyone is finally coming to their senses. Good Luck!

Propped Up!

So far the TARP program (Fat Guy/Government) is keeping the economy (Skinny guy/you and me) propped up. They may even be successful at launching us up higher if we break overhead resistance. Its too early to tell right now so settle in and enjoy the seesaw ride up and down this channel we are in. If you are bored you can short 950 and go long 923 over and over again. Our two trades have held up pretty well so far. I hope the fireworks star by July 4th! Good Luck.

Barbara Rev 2.0

Papy appears to be learning some tricks from Buba. Nice 84th birthday present! Anyway need something to jolt me from going cross-eyed in this endless sideways action hovering above the 200SMA. Both our trades are less worser today. I will keep you posted.

Max Headroom

Its tall guy in the small car time again. My head is smashed up against the ceiling (945 on the S&P which is major overhead resistance). If we manage to break out over that point tomorrow with good volume a ton of shorts will be forced to unwind their positions (Like putting out the fire with gasoline! David Bowie Cat People 1998) PS Both our trades recovered a bit today woo hoo! Good Luck.

Timmy does standup!

Sorry folks I couldn't resist. Don't you just know Timmy was the guy everyone used to give wedgies to in grade school. You cant make this sh%$t up LOL!

BEIJING, June 1 (Reuters) - U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency.

A major goal of Geithner's maiden visit to China as Treasury chief is to allay concerns that Washington's bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds.

China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China's total U.S. dollar-denominated investments could be twice as high.

"Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

Chicken or the Egg

Every once in a while I read something in the financial world that just makes sense. This morning the article I read said that;



1) over 70% of our economy is based on consumer spending
2) we have unemployed 9% to 15% of the consumers
3) those dudes and dudetts have definitely stopped spending
4) the left over folks are scared sh$$tless and have stopped spending
5) the government is giving all the cash to the banks who are using it to pump up their balance sheets and they are not lending to the regular folks.

Is it just me or what is wrong with this picture? How does this plan fix anything? Anyway if you want to read it here you go; http://www.financialsense.com/Market/wrapup.htm

Meanwhile back at the ranch lets set our stops on GLD @ 92 and FXF @ 90.5 Good Luck

Fetch the pebble from my hand.

Its a sad day today. Kwai Chang Cane (David Carradine) was found hung in his Thai hotel room. You younger bucks probably know him as Bill from the Kill Bill films but he ultimately kicked the best ass in slow motion on his Kung Fu TV show. I guess the skyrocketing deficit finally was to much to take even for grasshopper! We will miss you. In the meantime the market just got a giant woody over the employment numbers but appears to be quickly going limp at the open. We have hit significant upper resistance on the S&P and maybe this balloon needs to let out some hot air right now. Our picks are doing awful due to the dollars sudden jump up but that may be short lived. I will keep you posted. Good Luck.

Circle of Life

Listen to this brilliant quote from the Federal Reserve President of Kansas City, "Capitalism is a process of success, failure and renewal, and for it to work properly, institutions must be allowed to fail, no matter their size or political influence." When you start to mess with this simple formula you start to get something out of a Mary Shelly novel or Frankenconomy! Kinda like what were in right now huh? Not much new to tell you today our two trades are consolidating like the rest of the market and preparing for a move. Lets hope its up! Good luck

Ghost Towns

Here is a fun game to play to get you back to reality and away from all the nonsense oozing from the boob tube. Next time you go out and run an errand count how many stores and shops have closed their doors. You get 1 point for a shop in a strip mall, 2 points for a restaurant and 5 points for a "Big Box" store. I'm up to 60 points and I live in a very rural area. Builders in my community are suicidal, and a very large Chrysler dealer is shutting their doors. My kids school wont take lunch charges anymore they will only accept cash or your kid goes hungry. They have to many deadbeats! It looks like some profit taking is going on today after the rocket launch of the last few days. It will be interesting to see if we fill the gap from last Friday. Our picks seem to be weathering this pullback ok and I will keep my eye on them. Good Luck.

Sugar High

That's how the World Bank President Robert Zoellick described our economy right now and based on where the indexes traded today I would say he is dead nuts on! We all know what happens when the sugar runs out right. Keep your eyes and ears open people. Oh well while you were running laps round the kitchen island both our picks got filled today so I will be reporting back in the morning on what to do with them. Good Luck.

Launched into orbit

Yesterday this is what I felt like as we rocketed past the 200SMA. There is something really weird going on in the market. Volume just appears out of nowhere, is off the charts for a short period and then disappears. Tread carefully the barracuda are definitely among us. Today's picks are long GLD@96.77 and FXF @93.71 Good Luck.

All Gap and No Crap

You know I'm to old and tired to fight the tape so I'm just going to sit on my hands until something solid emerges from this run. We had a huge run up in the first half hour, almost non-existent volume for the whole day, and heavy volume down at the close. I still think this rally is all vapor and the end is very near but sometimes being right gets you whacked. My spider sense is tingling don't be a Lemming, sit and watch for a while.

Gap and Crap?

Well folks we have finally arrived at the 200SMA! Every wise guy I respect says to short this rally, every retard on CNBC says its the new boom rally so don't be left behind. I sit here twitching trying to figure out what to do. I think I will go make some coffee instead.