Thursday cinema & library

We're on the verge of some potentially titanic movements in the next few days. Sit tight and avoid the turbulence, or at least take a barf bag with you. Better yet, get on your bike and enjoy a fine summer evening.

Tyler Durden: Positioning for weekend: BofA's risk cheat sheet (June 15)
TraderFlorida (video): Thursday wrap (June 14)
streetmoney21 (video): Currency markets prepare for total chaos on Monday (June 14)
Le Fly: Come get it (June 14)

Charles Biderman: How to benefit from global financial mess (June 14)

Street Insider: Unusual mid-day movers (NBG) (June 14)
Barron's: Apple potential 'game changer' in mobile payments (June 13)
Reggie Middleton: As predicted last year, French and Greeks in race (June 13)

Titanic or Titillating Thursday

2:24 am (Hawaii) The Spanish 10-year is at 7%. How fricken outlandish is that? No nation can survive long with something like that. It's just ... implausible. No country was built to survive something like that. Yet there it is. Infuckingcredible.

But the world is not coming to an end. If there's one good thing about the internet, it's this: the masses share everything, good and bad ideas, at warp speed. So long as there is power, ideas and solutions spread at a rate we as a species have never seen before. So it's impossible to measure that component and believe with all certainty that we're up shit creek for good.

It just feels like it sometimes.

Here's what amuses and/or infotains this morning.

Business Insider: Initial unemployment claims MISS BIG (June 14)
Joe Weisenthal: I just got a ride to my hotel in Athens and BOY was it depressing (June 14)
Business Insider: Holy Crap: Spanish 10-year yield hit 7.0% (June 14)

No wind behind Spanish sails (updated)

7:41 am (Hawaii) The Spanish bailout had Dow futures +140 at one point last night. My guess was that AAPL would hit 590 today. So I got up a little while ago, turned on the TV to see the Dow down 30 points. Stunning. No +100 or +200 day?

AAPL nearly hit 590, hitting 588.50 intraday, but is now back at 581+, barely positive even though its annual developers conference has begun. (They've released new and improved MacAir.) The bailout lasted for the blink of an eye. FAZ, which gapped down nearly a dollar to 25.00 at the open, is now at 26.56. I'm still all cash and probably will leave this mess alone. But it's telling how any bailout is having almost no effect on the overall market.

Update 10:16 am Took a shot at FAZ at 26.92, ran to 27.04 and fell. Got out at 26.80 for a teeny loss. Got back in at 27.09. (Missed a buy at 26.93 on the way back up.) Sold at 27.34 before the closing bell. Net positive for the day, basically break even. Had I held from 26.92, would've been a small, but decent paper profit. The after-hours puppeteers have FAZ at 27.39.

Almost impossible to hold anything overnight unless you have a major cushion, like say AAPL since 95. But even AAPL took a couple of roundhouse blasts to the face, falling to 571+ before the bell after being up nicely early in the day. Dow -142 (-1.1%), Nas -48 (-1.7%), S&P -16 (-1.3%). Surely another bailout coming this week, likely for Italy, which means another gap higher for the indices. I'd rather wait for the pop and fade that. Or just watch from the top row with my binoculars.

Looking ahead (updated)

2:39 pm (Hawaii) Kinda regretting not holding any FAZ. Realizing that smaller positions, even smaller than what I've sometimes traded, will work best through the choppiness.

Business Insider: Nikkei tanks right away as industrial output comes in weak (May 30)

But @TraderFlorida has been spot on in regard to technical analysis, riding AAPL down until last week, and now he's bullish on it for the short term.

TraderFlorida (video): Nice bounce today (May 30)

I'm all cash for now. Who knew AAPL would jump $10 while the Dow would plunge 160?

From earlier today:


Business Insider: ECB sends out rejection of FT report that it blocked Spanish bank recap (May 30)
Business Insider: Here comes the busiest 48 hours in history of economics (May 30)
Telegraph: Spain faces 'total emergency' (May 30)

Update 8:53 pm 


AZ Daily Sun: Asia stocks fall as Italy, Spain bond costs rise (May 30)
Orange County Register: Robert Samuelson: Why is there no Greek bank run? (May 30)
Bloomberg: Spain's banking rescue should become example for Europe (May 30)

Weekend cinema & library (updated)

10:37 am (Hawaii) Gold (and silver) got a nice gap up this morning thanks to the CME mafia's loosening (death) grip on margin requirements. Most of the market though was flat, meandering, aimless. The skeptic in me wants to be in FAZ since we have Memorial Day weekend ahead and that gives the Euro boneheads three entire days to keep screwing their system up. (Is it reasonable to expect such disparate cultures and nations to be unified? We would never enter a union with Canada, Mexico, Panama and Haiti, would we? Bad comparison, I know, but how can Germany not despise Greece at this point?)

So gold's leap higher appeals to the optimist in me. Maybe the puppeteers are ready to jolt this market to new highs like 2011. But craziness in the euro zone is going to happen, just a matter of when. So I remain neutral, all cash.

Bloomberg: Deutsche Bank's Fitschen said failed Greece lacks leaders (May 25)
Zerohedge: About that European stress test (2011) and where pain in Spain is raining next (May 25)
Zerohedge: Greece has proved that ECB bailout scheme based on lies, fraud (May 25)

Update Monday 8:14 pm The pessimists/realists/skeptics could be right 99% of the time. I could agree with them 99% of the time. But that 1% they're wrong could be precisely when the market bounces. Probably when more fiat starts rolling off the digital presses. Then what? What good will it do anyone to be short the market?

Still, it's good to hear both sides of the story.

Economic Collapse: 25 signs that smart money has written off Southern Europe (May 28)
Reggie Middleton (video): Breaking down muppetology (May 28)
Le Fly: One more great trade until September (May 28)

Sandstorms and saliva (updated 9:46 am)

1:25 am (Hawaii) Traded just once on Thursday (small loss in TVIX, a truly wicked bitch of an ETF), just busy running errands, getting things done. No choice. Had to be done. Trading in a thin market that does nothing but eat its own vomit? Yes, I can take a pass on that even if I'm not running around away from from home.

This morning, CME mafia is lower margin requirements. I haven't kept track much of precious metals for months, so if this is a first this year or last, this might be huge news. Remember when CME kept raising margin requirements awhile back? They did it four times in nine sessions and gold spot price cratered.

So, my conspiracy theorists out there, is this an engineered move to get the market rolling higher?

MarketWatch: CME Group cuts margins for gold futures (May 25)
NY Times: In Spain, bank transfers reflect broader fears (May 25)
CBS News: EU summit ends with lots of uncertainty, few plans (May 24)
Bloomberg: Monti says Germany can be persuaded on euro bonds (May 24)

Update 8:43 am Back in FAZ at 26.91. I bought (impulsively) on a spike from 26.72 to 26.93. Soon as I re-entered, it sold off back to 26.75 or so. My stop loss was in place had it gone lower. Now FAZ is back to 26.91. Volume that spiked in the past 30 minutes. Roughly an hour and a half ago, both FAZ and gold rose and held their gain. Banks selling off and gold rising? Unusual.

AAPL also made a run during that time, from 560 to 563, but gave back all of it and more in short time. AAPL fell to 559+ and is now above 561. Thin market, unpredictable, a lot of games being played.

Not planning to hold FAZ over this three-day weekend. There's always the possibility of some form of compromise out of the euro zone. There's also the possibility of ugliness as tension rises in Greece and Spain.

Update 9:46 am Out of FAZ at 26.93 (+0.02/share) for a break-even trade. It ran a bit to 27.13, but I just raised my stop loss instead of selling for a smallish profit. The market is indecisive as ever going into the close.

Rudderless market (updated 12:32 pm)

8:08 am (Hawaii) I still think the robots are in control, just not as firmly as yesterday. AAPL ran to 573 and ran out of steam. The buying ended and it has since pulled back to 563 where it drifts in an abyss. The indices looked about ready to give all its gains back today, but have stayed positive in the past hour.

Somehow someway the financials are getting a "lift". That's where I think G8 hit the switch and got the robots cranked up. Again. 95% of my Debt Spiral list is green, and that includes NBG and STD. JPM is up 5.3% to 34.24 even though it is (in my mind) almost certain that their losses are about to double or triple (or worse).

Sure no stock goes to 0 in a straight line, but this is borderline comedy that insolvent institutions are being propped up on nothing (that we peons can know about). In the end, the printing presses will hum. In the end-end, they will not. But that's not today and I haven't hit a buy order yet. All for the best.

Some reading for your pleasure and education:

Jim Wyckoff: Top 10 mistakes traders make (May 21)

Update 9:25 am Back in FAZ at 26.85. I wanted in at 26.70, missed it by a hair. Was looking for a breakout above 26.80 or a pullback to the range low of 26.55. Indices pummeled in the past 15 minutes. Nasdaq in the red with AAPL back to 557.

Greek/Eurozone has a big day tomorrow. Not looking to play either side, just watching FAZ price action, have my stop loss in place. So much for that dead cat bounce. JPM had been up large today, pulling back now to 34.09. It was at 32.99 early today. Might close there, who knows.

When AAPL started to crater, I just didn't have the guts to short it. I've never shorted anything directly, only through something like FAZ. But AAPL has already hit 546 recently, my Fibonacci retrace price (from 396 to the 644 high), and it was at 521 just two sessions ago. Strange times indeed.

Update 9:41 am FAZ reached higher, above 27.40, before pulling back some to 27.29. My stop loss target has been raised three times already. Maybe four.

Greece's former PM feels no obligation to toe the party line, the EU line, the ECB line, any line. His words today are fuel for the fire on financials like JPM, which is now sub 34 (33.93) and eroding.

BBC (video): Papandreou: Greek euro exit would 'destroy' economy (May 22)

Updated 9:52 am Out of FAZ at 27.33 (+0.48/share). Sticking to price discipline even though FAZ could easily open tomorrow above 27.50 or even 28.00 with the way the whole Greek bank run/Eurozone paranoia is shaking out. Just had to secure a decent profit before traders do the same in these final minutes before the bell.

Might try a very small position right before the bell to play tomorrow's scenario. Just don't see the Greeks coming to any kind of compromise with eurozone. It's too early for the new politicians.

Updated 12:32 pm In all, I changed my stop loss on FAZ eight times in that last trade. It was worth it each time.

Weekend library & cinema (updated)

G8 gathers at Camp David this weekend

Boston Globe: An exit by Greece would test the eurozone (May 21)

Business Day: Roubini - Damage from Greek euro exit can be contained (May 21)

Reuters: World leaders back Greece, vow to combat financial turmoil (May 19)

Telegraph: Global banks see market rally on Greek exit (May 18)

"We think the worst is over for the euro," said David Bloom, currency chief at HSBC. "The central banks will have to step in massively and that will be a soothing balm for the markets. The Fed is already leaving the door open for more QE. We could see quite a powerful rally."

Financial Times: Spain hit by rise in bad bank loans (May 18)
ABC News (Australia): Greece tops G8 agenda as markets tumble (May 18)

The World: Moody's downgrades Spanish banks (May 18)

Library of Barcelona

No fizzling out for FAZ (update 11:37 am)

9:02 am (Hawaii) Back from doing some work on the road. Between that and this cold, I've been feeling ragged and had to get sleep this morning. I missed the run for FAZ, which opened in the 27.50s/27.40s area and would've been a great re-entry point. (I sold yesterday at 27.54.) It ran to 28.51, then pulled back to the 28.00 area by the time I woke up. I almost put in a buy order, but the possibility of profit taking at the end of huge week — FAZ was 22.88 a week ago — had me willing to go do my work and be patient.

I re-entered after returning at 27.65. That was just a few minutes ago. It went to 27.76 (and I raised my stop loss), but now it seems profit taking is truly kicking in and my stop-loss price is about to kick in. If that happens, it's a quite small loss and I can live to fight another day. That's the biggest takeaway for this week. Stop-loss is necessary. Mandatory with a fast mover like FAZ (3x ETF). Mandatory with a pushover like GSVC. The big losses are rare but they knock me down and erase all of the small wins. Price discipline is key.

FB is now at 38.65, just over its IPO price, despite a lackluster market. That's being kind. This is a correction we're in. I'll be happy to get some FB at 25 or 30. They always pull back, the IPOs. Doesn't matter how great the stock and company are. Patience is key.

Update 9:20 am Stopped out of FAZ at 28.53 (-0.12/share). Tiny loss. As expected, traders holding from 27.50 this morning or all the way down to 22+ a week ago are cashing in for the weekend. FAZ has bottomed near term at the 28.40 area, now rising again. Should be interesting how the new buyers do against the heavy selling.

Update 9:36 am Back in FAZ at 28.66. Stop loss in place. Seems preposterous to be buying it when I sold yesterday more than a dollar lower, but that was a long time ago in the FAZ universe.

Update 9:39 am FB pulling back to 38.00, but there's a huge wall of buyers there with orders of 16K, 27K, 65K, 51K, 3360K (3.36 million shares?) protecting the price.

Update 9:47 am Stopped out of FAZ at 28.72 for a teeny gain. Thought about selling when it hit 28.92, but that was so quick. It went from that high to 28.80 in an instant. Let the trade ride instead of trying to change, adjust on the fly. That can be dangerous if a stop loss order is changed to a limit order while the price is sprinting either way.

Update 9:52 am It's hard to listen to gold. Spot gold is up big the past three days, an indication that the Fed/puppeteers are ready to unload trillions in new fiat currency. Damn austerity, they cry. So gold is tempering my desire to trade FAZ one more time before the closing bell.

Update 9:57 am Entered DGP at 48.10 before the closing bell. There will be some consensus out of Europe this weekend about stimulus, new bonds, whatever the hell the can imagine and create to soothe the overheated markets. I'm staying out of FAZ here. The only way I'd stay in is if I'd stayed long since 22.88 (a week ago).

Update 10:28 am DGP moving higher after hours, now 48.31 on thin volume. My position is small and it would take a serious move higher for me to consider selling. Weekend in Eurozone at the G8 meeting will be interesting. If there's some progress, FAS will run. If not, the weight of these "bank jogs" will take a toll.

Update 10:38 am I've probably underappreciated the effect of JPM on FAZ today. JPM hit an intraday low of 33.01 or so today, and the news from them continues to be horrible. Loss on that botched "hedge" trade is likely $5B, not $2B or $3B. I won't be surprised when it turns out to be $10B. They can't unwind it so they just keep betting against it on the other end.

So, even if/when Europe starts taking steps toward really dealing with the issues in Greece and Spain (and Portugal, France, etc), FAZ could still jump on problems at JPM. How much, don't know. But the kryptonite will be a new round of stimulus, and there's nothing that will help FAZ by then.

When that round of QE/whatever you want to call it is over, though ... gold and FAZ will spike like nobody's business.

Update 11:37 am FAZ coming down, like yesterday, in after hours trading. Now at 28.65. If it can pull back lower, say to 28.30, I might pull the trigger. Why hold DGP and FAZ? The onset of fiat currency printing alone fuels gold. The bank runs and political schemes to control ban runs, even with G8 strategies, are just a thumb in the dike. Banks are in deep, deep kim chi.

All things bankster (updated 12:30 am)

CNN Money: Moody's downgrades Spanish regions (May 17)
National: Spanish deny report of 1B euro bank run (May 17)
Industry Week: Spain falls into recession amid fears of eurozone bank run (May 17)
Telegraph: Fitch warns of mass eurozone downgrades (May 17)
MarketWatch: Willard on Greece, Apple suppliers (May 17)

AFR: Greece fears hit funding costs (May 17)

Herald: IMF chief outlines 'dire consequences' if Greece drops out (May 17)

USA Today: Greeks pull cash out of banks as confidence wanes (May 17)

KOLO TV: Spanish bank hit by report of withdrawls (May 17)
Globe & Mail: Goldman plans big Facebook selloff (May 17)

4:58 am (Hawaii) Even without making another trade, I find it fascinating, a bit scary and definitely entertaining that the common man in Greece — and now Spain — is taking his and her hard-earned money out of the banks there. The banks can lie to us forever, but how long can we keep believing them?

Update 6:11 am Back in FAZ 25.75. Wish I'd gotten back in at 25.25, but played it safe. Price consolidated for awhile (ie about an hour?) before it jumped at noon Eastern time. Now at 27.24. Put in a stop loss right away and have raised it twice. TZA (3x Small Cap Bear) is interesting too but I'm late on that).

Update 6:21 am Stopped out of FAZ at 27.05 (+0.30/share). Pros and cons of stop loss on a play that has done nothing but go up for the past week. (I had it at 22.88 just a few days ago, sold it too soon.) But FAZ will swing and swing and swing. That is a guarantee. Now at 26.98. Will re-enter at a lower price. Or not.

Update 7:23 am Back in FAZ at 26.82. Stop loss in place. A drop from here to the bell would be the end of a daily streak that takes the price higher from morning/mid-day to close. A lot of "tweezer" candles (as StockGuy22 would say) on the 3-min chart. Not promising.

Update 7:43 am FAZ at 27.00, raised my stop loss. CNBC reports that Fitch has downgraded Greece again.

Update 8:41 am FAZ hit 27.32, high for today. Raised my stop loss again. Debating whether to hold overnight, but price action will dictate before I get to decide, probably.

Update 9:08 am Almost got stopped out of FAZ again, but since it has exploded from the 27.18 area to 27.34 (again). It was tempting to get more shares but I'm comfortable with this position size. Can't make it all back in one swing.

Update 10:08 am Holding FAZ for now. It hovered around 27.70 near the close, then jumped to 27.80 at the bell and is above 27.90 after hours. No question the banksters are shorting themselves and will ride all financial bear ETFs until the money printing machines start humming again. Decided against adding more FAZ (or starting a position in TZA). Stop loss still in place after raising it several times. Giving it more room than usual. Still leery about holding this overnight.

Dow Jones -156 (-1.2%), Nasdaq -60 (-2.1%), S&P 500 -19.94 (-1.5%).

Is this bloodbath the market has "needed"? Or is there more to come? Facebook IPO has priced at 38.

SPY is still positive year to date. JPM closed at 34.05; it opened the new year at 34.06. How close is the market to getting stimulus? All the puppeteers are former bankers or ex-banking lobbyists, Obama needs bankster funding for his campaign, and it's an election year. It's a matter of when, not if, stimulus kicks in.

Update 12:30 pm Chickened out, sold FAZ after hours at 27.54 (+0.72/share). That's well off the high of the day (27.92) and I had plenty of opportunity to sell after the bell when it jumped above 27.80. But by then I started thinking seriously about holding overnight. But I can't do it. It's psychology. If I was making a big profit this year, this would feel like house money I'd be risking. But with the earlier loss today on GSVC, I feel obliged to make up for it. This sale of FAZ covers more than half of that loss. (Though if I'd sold at 27.90, that would've almost made up for the entire loss.)

After hours, the first plan was to hold the FAZ position and a stop loss order at 27.60 (good until cancelled). But as they moved the price into the 27.80s and 27.70s, I thought about selling right there instead. When it dropped to 27.60, that rang bells. Europe will probably be fugly in the morning with bad news and nothing good will come from JPMorgan. But after 11 down days out of 12 in the indices, plus Facebook's IPO, I prefer to stand aside and wait for the next opportunity than risk losing the profit.

Damn I'm a chickenshit!

FAS vs FAZ

3:16 p.m. I love to yammer on about how the banksters have us all set up. You don't think they've shorted this market? You don't think they even short themselves? Hell yeah they do! They're freaking banksters, remember? All they want is to make profits, nothing else matters. So yeah, you bet your ass they're banking through this downswing, kneecapping every hedge fund and retail trader that went long a week or two ago. They know shit is hitting the fan. So do you and so do I. But do we dive in headfirst?

I liked FAZ at 45. Liked it more at 40. It hit 35 and I was surprised. From there, I really thought the banksters would seize control and send the market into a year-end eruption to new highs. But they actually can't control things in Europe as quickly or smoothly as they can control the Fed and the White House.

So we have FAZ rising to 50 (closing above 49) while FAS fizzles. Where do they go from here? I totally believe in the psychology of round numbers. People are like that. They wince and pucker at certain round numbers and 50 is one of them. I'll watch from the sideline with my binoculars now and then, but it's too busy for me anyway to pay too much attention to the market. Just be cautious out there. Traps are everywhere.

FAZ daily

Today's round of lame news had FAZ roaring higher

FAZ daily

Pushing the higher trendline or gravity kicking in?

Hanging man candle means little with headline risk dominating

FAS daily

Returning to those basement levels again

FAS daily

Generally it's a bad idea to buy anything that has a reverse split.

BAC and FAS come to mind

More bounce to the ounce

7:36 am (Hawaii) There goes the FAZbreak, pushing back up to 63.65. I just got up 15 minutes ago, re-entered at 63.30 even though FAZ is/was up more than 8% for the day. I really don't like chasing anything like I did in the past. And I liked FAZ at 60 or 55, but didn't buy at 60. This morning, it came down to 56.33 in premarket trading. But I was snoozing.

Looks like 56+ will turn out to be the recent low, which makes sense. My megaphone pattern on the chart had FAZ at 55 if it touched the bottom of its range. Then Fitch downgrades Italy and Spain, and FAZ bounces. The Dow has dropped 20 points since I turned on the computer, now -56. I've followed FAZ off  and on for awhile, doing daily charts the past week or two and it's been interesting. Just when you think alien hybrid algo devil machines run everything, human psychology returns to the arena. In other words, when FAZ sells off or goes on a tear higher, it moves like nothing else. It's panic or party time. So I don't expect a drastic pullback yet, not like I would in other stocks or ETFs.

This was at 81 what ... two or three days ago? The move to 81 happened, but the other move — to 100 — is still coming. I still don't know if FAZ goes back to 50 or 42 first. For now, it's either keep tight stops and stay out of any possible avalanche selloff later in the day, or mobilize for a home run move. The difference today is that it's Friday, and that will play into the psyche.

FAZ 1-minute: up 9% so far today

Update 8:03 am Added more FAZ at 64.05, giving in to the urge to chase, and got spanked. Sold at 62.90. The run is probably done after three surges higher today. That's a lot for any stock, especially when it's up about 10% at the peak. Small loss. AGAIN. Giving the price action space to move used to be a good thing. Now, it's a failing tactic. Probably going back to selling at my entry point. FAZ went to 64.15 before sliding. 

Dow is -8 and making a strong rally off its low. My timing couldn't have been worse. Only decent thing I did was get out. I was too overconfident in the momentum in this late stage of the move. Sometimes 10% up is the ceiling, sometimes it's not. This time, it was. Adding the shares above 64 didn't help. Here in the 62.90-63.00 range, I'd be down just a tiny bit from the 63.30 entry point. There's a part of my thinking that wants to stick to strict price targets like 60 and 55. Then there's the undisciplined part that chases intraday. It's time to get much much more technical. 

FAZ is a spaz

FAZ: A bullish gap up? Or signs of quantitative puppeteering?

1:55 pm (Hawaii) Watching from afar, thought about scaling into FAZ on Friday. Decided to pass at 53-54. Today, with the usual gyrations from Europe, some panic is setting in, stocks sold off (though they rallied into the close) and FAZ is above 58 as after-hours trading is about to end for the day.

At 58.70, FAZ is in the midst of its lower megaphone channel/trendlines/zone. It bounced off its lower trendline of roughly 52 after falling from its pennant/flag formation. So now what? The FOMC's two-day meeting begins soon, and if the indications are correct, Helicopter Ben will push hard for more inflation via fiat currency printing. By the trillions.

How to prepare for this? I have my little sack of physical metals. I am all cash and have no equity positions. Yet. If I were long FAZ, I probably would've taken today's 6-7% overnight profit. I did it a couple of weeks ago when FAZ went from 54 to 60. Over the weekend, FAZ went from 53 to 58. The top line of this range is 66, which could be touched again (as it was two weeks ago). Beyond that? Who knows?

If Bernanke gets his way and the machines churn out paper currency and digital dollars by the trillions, FAZ will tank in the short term. 50 would not be out of the question. If that's the bottom, I'll start scaling in then. Probably. There's no happy ending for Euro toxic bankster crisis. Same here in the States. They're just going to eat the dust first. Before us.

No paper gold or silver trades for me. Not yet.

FAZapalooza hotline

FAZ post-pennant, still in megaphone

8:25 am (Hawaii) Maybe I'm wrong. Totally way off. Maybe dollars start falling from the sky this weekend, everybody grabs everything, magically sovereign and individual debt gets wiped off the board and we all start clean. Zero debt. Zero worries. Life is perfect.

Guess what? It would take just a few years, maybe just months, for this system to get fucked up again. It's all built on lies and premises. It is dependent on you and me getting in debt. The puppeteers don't care if it ends you up having to hock everything of value. Buybuybuy, simple mantra of the strip mall economy. So we send our young men and women to places unseen and beyond to protect "our" interests. Nothing stops the petro dollar military industrial complex, right?

It's not just FAZ that tells the story. When Greece, Spain, France, et al run out of fiat currency/credit, then what? If the world really believed that gold was at the end of every rainbow and that an army of unicorns would mysteriously gore the banksters and rid earth of all evil, why is FAZ rallying? Why is gold back above $1,800 an ounce? Why would most of us, I'm guessing, be happy to discover a giant treasure chest of old Spanish Armada gold coins?

Part of me wants to stop trying to time things. Just get more physical, park some dollars in FAZ and forget everything for a few months or weeks. Or days. Germany isn't going to help Greece until 2012, it turns out. Yesterday was a little white lie. Of course. But I'll probably remain all cash into this weekend. The banksters have plenty of tricks up their sleeves. Their wizardry is going the way of Oz.

Waddling Wednesday

Dow Jones 9,774.02 -96.28 -0.98%
NASDAQ 2,109.24 -25.94 -1.21%
S&P 500 1,030.71 -10.53 -1.01%

It's becoming a habit, this getting up with an hour left in the market. I was up by 9:15 am Hawaii time, early enough to see AAPL trade at 253.33, down a few bucks from yesterday's lower close. I rubbed the makapiapia out of my eyes and AAPL was at 252. A few minutes later, shares dropped below 251 and set to plunge below 250.

That's where it held ground, at 250.01, and closed at 251.46, down 1.84%. Never mind the repeated rumor about Apple and Verizon coming to terms on a deal for iPhone 4; the stock has tanked since hitting 279 little more than a week ago. From a short-term low of 242 to 279 in one week was drastic, and now AAPL fades despite good news. It had to sell off on the release of the new iPhone, but market forces are always too strong, even for Apple.

There just aren't enough buyers out there. There just aren't enough reasons to go long here. The recovery has slowed, China is continuing to hit the brakes and people are on vacation. That makes it a playground for the high-frequency traders and their robots.

TECH KINGS
GOOG dropped 2.05% to 444.95 and is looking more attractive than ever. But I continue to wait. The Apple-Verizon partnership could hamper Google's Droid X campaign. Two winners are definitely possible in the future world of mobile communications and advertising.

Apparently, Google hasn't given up on China yet. Until there's something firm between the Googsters and the People's Republic, though, it's superficial.

ALL THINGS CHINA
Baidu finished up 0.75% to 68.08, a nice surprise despite falling off an intraday high of 70.35.

FXI lost 0.46% to 39.13 while Freeport-McMoran (FCX) dropped 3.18% to 59.13. US Steel (X) fell 1.43% to 38.55 and Posco (PKX) lowered to 94.32 (-0.55%).

PetroChina (109.73 -0.71%) dipped again, but CNOOC was up (170.17 +0.81%).

Solars Yingli Green Energy (10.18 +3.04%) and Trina Solar (17.28 +0.12%) also bucked the general trend.

ENERGY
US Oil Fund ETF (USO) slid 0.61% to 33.96 and natural gas plays petered out in response. My list of 40 natty gassers dropped 0.83%. Interestingly, Westport Innovations (WPRT), my favorite, gained 1.88% to 15.69. UNG picked up 1.04% to 7.75 and REXX climbed 2.75% to 10.10.

In accordance with crude oil, FSLR dipped 0.52% to 113.83.

In a related clean energy play, Tesla ran wild on its second day of trading only to falter at the finish. TSLA closed at 23.89 on Tuesday, opened at 25.96 today and reached 30.42 before selling off. Shares closed at 23.83 (-0.25%) on volume of 17.1 million shares.

EURO ZONE
FXE gained moderately (0.26%) to 121.87 despite unrest in Greece and more troubles for Spain. Merkel's candidate's victory was good, apparently, for the Euro.

Banco Santander handled the negative news from Moody's well, gaining 2.04% to 10.50. IRE lost 2.37% to 3.29 as austerity measures in Ireland continue to wreak havoc. NBG dropped 2.69% to 2.17, nearing a one-year low.

SAFE PLAYS
GLD (121.68 +0.34%) and SLV (18.21 +0.44%) were nice trades today, as was TLT (101.75 +0.67%).

PROTECTION
ETNs continued to provide shelter to beleaguered longs. FAZ gained big again, adding 3.57% to 17.42. TYP rose 5.48% as tech stocks dipped. BGZ (18.25 +3.22%) and TZA (8.18 +3.41%) were also big winners.

VXX gained 1.33% to 31.20, but didn't exactly trade up while AAPL declined — an unusual lack of coupling that I've seen only twice in the spring and summer. It probably says more about the level of familiarity the general market has with this level of volatility. It's enough to shake out weak longs and conservative traders, but not enough to be truly defined as a panic. Plus, volume is so light. For AAPL to make a higher percentage move than VXX says it all. VXX may have topped near term.

QID (UltraShort QQQ ProShares) did much better, gaining 3.13% to 20.04.

STRANGE BUT TRUE
Shares of CBOE gained 2.49% to 32.55.

DNDN continued its crash, falling 3.75% to 32.33, then losing another 15.47% to 27.33 in afterhours trading. It may be another bear raid on Dendreon shares.

The Centers for Medicare and Medicaid Services posted this online and is seeking public input on the effects of Dendreon's prostate cancer treatment. It seems to be a routine CMS procedure, but shares are tanking nonetheless.

If it's another bear raid without substantial facts and news, this could be another buying opportunity. But I'm staying out and I remain 100% cash in this circus of a market. The elephants are on the loose and I'm staying way up in the bleacher seats.

Spain vs. Germany

Wow, Spain is calling Germany's bluff. They dare yank the curtain on unified Germany with this move, calling for Euro banks to face stress tests.

This is great for Spanish banks like Santander (STD) ... right? Or will the Euro tank if Germany's banks are found to be uneven? In that case, the Euro falls and STD, uh, gains? If the Euro falls, how can that benefit STD?

After those nice recent gains for STD, this can't be a win-win situation unless Spanish banks prove to be solid, or just as solid as German banks. But any negativity would cause financials in general to recoil, just my guess.

So really, Spain calling Germany's bluff can't be good for anyone unless you're long FAZ. Might be good to hedge with FAZ if you're long any finnie.

What strange times we live in, indeed.

In Spain, they have the sense to use 

beautiful models as tennis ball girls

Chicken or the egg?

Doesn't matter which came first to the bulls. They're doing the funky chicken dance this morning with the Dow up 212 points (+2.2%, down from its highs, but still...), NAS +40 (+1.9%) and S&P +21 (2.1%).

Futures were juicy going into the opening bell thanks to good news from Spain and China. Lack of bad news in a market that was still oversold after that bear trap/head fake into yesterday's close, and woila: instant hammering of bears and waffling traders. (I'd classify myself as the latter.)

Some of the leaders from yesterday are kicking tail today. FCX (+4.4%, 63.39), X (+3.9%, 42.96), FXI (+2.3%, 40.00). If copper is leading this leg of the rally and China is devouring this orangey metal, along with its positive news this morning, this truly might be the bounce back to bull territory. Even SLV is up slightly.

Financials are doing solid, too, with C (+0.78%, 3.90), IRE (+6.1%, 3.83), STD (+8.3%, 9.74). FAS is up 4.9%. Ka-Powww!

Money has clearly shifted out of safe havens like GLD (-1.1%), TLT (-0.8%), UUP (-0.97%). Tech giants AAPL (+1.5%, 246.96) and (GOOG +2.1%, 483.75) are keeping pace somewhat with the market. BIDU (+3.7%, 69.90) and NFLX (+1.93%, 117.66) are doing nicely, too, but most of the top gainers on my list are two- and three-letter issues — non-NASDAQ plays.

The leader, of course, is BP, now up 12.2% to 32.74 following yesterday's 15% plunge. I don't plan on trading BP ever, but it finally hit rock bottom, no pun intended, and was due for a major bounce.

Downgrade was inevitable for Spain

Axel Merk says the measures mean nothing without followthrough by the EU. "This trillion-dollar bailout package buys time," Merk said.

¿Dónde está el fondo, amigo?

From earlier today, news of six banks in Spain merging* to pool resources. Not an outright merger; they will remain unique entities. However, by pooling, they can retain some balance and flexibility against the rigors of the free market — maybe a measure to nip short sellers in the bud.

This came on the heels of Fitch's downgrade of Spain's rating, which sent the market downward at mid-day.

Spain is no Greece and there should not be the ridiculous level of negativity we saw in the latter. But Spain's debt is immense and unemployment is huge. This will take time, and in the end, the focus will move on to the next Euro nation in dire straits.

España se unirán en breve

Stretch run

Good night's rest here with no regrets about taking a pass on today's flat (fractionally negative now) market. I never plan to miss the market, but when the body talks, the brain needs to listen. Going into the close, same approach: unless something shifts dramatically, the thin volume is not able to hold up any stock properly. It's almost a mirage.

AAPL opened above 259, riding momentum from yesterday's close and afterhours trading. AAPL gradually fell to 253 after lunch (Eastern time), then rose to 258 here 30 minutes before the bell. That's interesting range. Volume spiked at 12:30 pm Eastern (downside) and again just after 2 pm to the upside.

With the developers conference (WWDC) on June 7, all indications point to the unveiling of iPhone G4. That's being priced into the stock right now and has been since the precipitous drop to 231 last week. I'm staying out unless there's another drop to 253 or 254 today. It's not just about stock selection. Price can injure a trader easily in this indecisive market. I punt.

[Update: I missed this earlier. Downgrade of Spain. No shock, but it led to the mid-day selloff and temporary decline of the broad market.]