Wednesday, October 12, 2011

If you're not lying . . .

2:11 pm (Hawaii) . . . you're not trying hard enough. Right? How else to explain how bankster stocks ripped higher today, other than non-news out of Europe and vast amounts of cash entering the market despite an obvious recession on both sides of the pond. (I realize that stock markets have risen higher during some recessions.)

Here's a look at FAS (12.70) and FAZ (50.98), which I traded today with mixed results. Had I left my shares of FAS alone (entry points 12.31 and 12.42), today's profit would've been nice. But I left FAS too early on both occasions, and the overnight trade on FAZ didn't work, of course, as financials soared. NBG +10.6%, AIG +6.2%, DB +5.8%, C +4.9%, BBVA +4.3%, BAC +3.3%, RBS (+3.1%), HBC (+2.9%), MC (+2.9%), JPM (+2.8%), GS (+2.5%), IRE (+1.2%), STD +0.01%. (My Debt Spiral list is not showing SCGLY price.)

FAS up 7.3% and FAZ down 7%. Getting out of FAZ at 53+ with a small loss was wise in hindsight, but I underestimated the strength of the banksters. They not only rallied, but they pushed FAZ below its recent intraday low of 50.10 (Aug 31). The next support level, if there is such a thing, might be at 46.60, followed by 43.20, 41.40, 38.85 and 37.05. Or has FAZ actually held here at 50? Hmmmm...
FAZ daily: Falling off a cliff?

On the other end, FAS has immense space above. I speculated yesterday that without any anti-bankster news in Europe, it could go to 14+ shortly. But above 15-16, the potential is huge. The last time QE flushed through the financials, stock prices exploded. Nobody gave a rat's ass about whether the fiat paper was backed by real money or not. The same is likely to happen here and now with Great Britain and other Eurozone nations ready and wiling to print monopoly money ad infinitum. For the first time in three days, I did not open a small, late-day position in FAZ due to the illogical nature of the market. But I've also longed to have shares at 55 and 50 or even 42 and 44, so the opportunity is here.

Barring overnight catastrophe in Europe, FAZ, which dipped as low as 48.55 today, could easily kiss the lower levels. But the lower FAZ goes, the sharper the snapback on the next round of Euro crisis. It'll happen at some point regardless of what Merkel and Sarkozy can patch together in the short term. Maybe I'll just wait for 37. No doubt the banksters and politicians can lie for much longer, but it's like holding your breath; sooner or later, someone's got to breathe. Everyone's got to breathe, and the ponzi scheme will be dismantled.

FAS 1-minute and daily charts
Did I think 13.00 could happen? Yes. Did I chicken out and bail below 12.50? Yes.
The daily looks happy with today's gap up, strong volume and a clear route to 14 and 15.

FAZ 1-minute and daily charts
Pure fugliness in the 1-minute though the late-day rally intrigues.
The daily had been pure megaphone action, totally bullish.
This is the first extended downtrend in months. Not good.

FAZ daily
End of pennant action? 

FAZ daily
A mean, steep, ugly downtrend with no end in sight.
Buy fugly? Not today. I'm all cash for now. 

Update 3:13 pm JPMorgan reports tomorrow. Is there any doubt they'll announce that, once again, they made money EVERY DAY of the past quarter? Those effers, love 'em or hate 'em, own their shit and they rule most of the world. Betting against them, at least overnight, would be crrrraaaaaaaaaazzy. 

Update 3:26 pm I expect a gap up in FAS, JPM and most bankster stocks in the morning, followed by some profit-taking off this huge three-day run by financials. Why didn't I stay long? Europe headline risk. And it's not easy to gauge this rumor about JPM and MS pulling out of the banking business. My take is that this is bullish for both, but I'm not putting money where my mouth is on this. Once JPM's earnings report is out (7 am ET), I expect selling at some point late in premarket trading or just after the opening bell. 

JPM, the crown prince of banksters, leading off financial earnings reports? That's like Babe Ruth leading off for the '27 Yankees instead of hitting cleanup. These things don't happen by chance. There's a reason why JPM is leading off when it could easily go lower in the lineup to boost finnies' momentum. 

This runup in bankster stocks and FAS is beginning to smell a bit fishy here, but a few squirts of their magical liars cologne should please traders for awhile longer. 

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