Bankster purgatory

11:45 am (Hawaii) Morgan Stanley (MS) hit 13.90 early in the day as the RobotMarket pushed financials higher and higher for a second day in a row. But it is now at 13.10 and falling after hours on news that Massachusetts has subpoenaed the company over the Facebook mess.

Add to this the coming congressional hearings into JPMorgan that will give every media channel an abundance of Jamie Dimon footage (ie plank walking interrogation) and it's unlikely FAS and the finnies will rally again for awhile. So why am I not long FAZ?

The whole Greek show tomorrow is going to set the table tomorrow. I'd rather wait for that first.

Machines rule earth

7:44 am (Hawaii) I woke up early enough to get out of DGP at 47.74, taking a small loss (-0.46/share) on a weird open. I was totally worn out by this cold and sleep debt though, and crashed out until now. The indices are up and strangely enough, internet/social stocks started poorly and spiked after that roughly 30 minutes in. YELP, for example, sank to 16+ but rose to 20 or so.

FB is down 9% to 34.79, but it was at 33 earlier. AAPL is up 4.4$ to 553. It hit a recent low of 521+ on Friday and closed that day at 530. FAS is up 2.6% though JPM is down 2.7%.

Strange day, indeed. DGP has drifted, still red, now at 48.00. The G8 effect has been minimal, did little to help bulls or bears. gold bugs or bank haters.

Volume is weak. AAPL volume is at 15M+ shares; it was at 26M+ on Friday.

The machines are in control. Again. I suppose this is the one thing that was generally agreed upon at Camp David over the weekend. It feels like melt-up time again.

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.

Like?

8:28 pm (Hawaii) Not that I'll buy a single share of FB in the morning, but this is worth storing away for (possible) listening later. The Facebook conference call, May 16 (yesterday).

Facebook conference call

Update 11:40 pm My guess? First day, FB reaches a high of 69, closes at 51.

Remorse in the rear view (updated)

8:09 am (Hawaii) It was premarket and I was in bed. The alarm went off, I check my sole position, FAZ. It was down in the 24.30s, not long after I'd gotten back in at 24.76 (the day before). I knew it was higher risk than usual since the financials (and JPM) had been beaten to a pulp for such a long time. The bounce had to come at some point, and this was it. I got out at 24.31 and took a small loss.

From there, FAZ eked its way higher, all the way to 24.87 several minutes ago. Now trading at 24.62. I haven't turned the TV on all day, but obviously, the JPMorgan shareholders meeting, the scuttle about possible investigation by Capitol Hill, etc are having an effect. JPM had rallied to 37.27, but is now back at 36.78. Is it a clean bounce or a dead cat bounce?

More annoying than frustrating, it's the trades I didn't make in GRPN and GSVC that I'll remember more. I got in GRPN yesterday at 13.30 and got out at 13.56.

Decided not to re-enter GRPN even though it seemed highly probable that the increase in Facebook IPO share price would have a ripple effect. That on top of the earnings beat and heavy short covering. GRPN opened with a huge gap up at 14.93, and has sold off since to 13.07. Still a 1.3% gain from yesterday's close, but all the after hours trading action has come and gone. This was 9.92 at the close on Friday, so there's going to be plenty of range trading.

GSVC and SVVC are pure beneficiaries of FB's bullish news. GSVC closed yesterday at 17.89, opened at 18.69 and has stayed up here. Now trading at 18.88, up 5.5%. SVVC is up 5.1%. This should've been easy money, but I was overly cautious.

Indices are barely green, but it wouldn't matter for the FB plays. AAPL is trying to stay above 560. No strength there. Today is a chance for bulls to reclaim the market. It's not happening.

9:17 am Back in FAZ at 24.96. Sure, it sucked selling in premarket way back at 24.31, but that's the past.  Moving on. AAPL cratered, as did much of the market, in the past 15 minutes or so, and FAZ began to take off. The Eurozone circus is too much and any big money that thought it would stay long today has pulled out and run for shelter. Can't blame 'em.

FAZ at 25.13, not assuming it stays here or goes higher. Ready to jump with my little parachute any time.

9:25 am Out of FAZ at 25.11, +0.15 per share, small gain. Now FAZ is 25.17. Timing...

10:08 am Traded FAZ for a quickie again, tiny loss. Would've been better off holding that buy at 24.96. I re-entered FAZ at 25.28, goes against my intuition, but today's closing momentum was decidedly negative thanks to Euro circus and continuing lack of confidence stateside. Also got back in GSVC at 18.35 after it sold off from 18.97 in the final hour.

Facebook roller coaster (updated)

12:07 pm (Hawaii) After the negativity from mainstream media last week on Facebook, two sources are saying FB will "increase its IPO price range to $35-40." One is CNNMoney's Maureen Farrell. See her tweet here.

That info was posted a few hours ago and I didn't see it. Otherwise I might have jumped back on board GSVC, which is at 18.20 after hours. (bid 17.93, ask 18.20.)

Here's MarketWatch saying basically the same thing about "large orders from retail investors." See the info via MW via IPO Botique. 

SVVC is practically unbuyable AH too: bid 28.87, ask 38.39. The move in GRPN plus the FB news is creating momentum, and the shorts are under fire.

Update 3:18 pm Kara Swisher reports that FB will debut at "$34 to $38."

Official pricing will be done on Thursday, she adds. 

Friday flutter (updated)

2:53 am (Hawaii) AAPL has slid from 567 to 563+ in premarket. FAZ remains above 24, but there's been no move back to 24.50, which is where it was in afterhours trading yesterday. Less than an hour before the opening bell, 67% of my main watch list is red, albeit many of them don't trade at all before the bell.

Various scenarios could play out.

A. The market is long overdue for a bounce, and the JPMorgan debacle simply gives it a chance to capitulate (barf out remaining toxins) for the near term, bottom out and move higher

B. The market absorbs the JPMorgan-induced fears and refuses to crater, but also refuses to rally. A lingering fever with flu symptoms, so to speak

C. The machines are ordered to trade higher immediately, as has been the case in the mornings recently, before selling off in the afternoon.

C appears possible especially since it's a Friday and holding anything long over the weekend is not going to be a popular strategy.

There is, of course, a D. That would be a flush-out with the opening bell that stays down for the count through the entire day, and additional selling near the closing bell as traders run for the hills with Europe in flux and domestic financials unable (or unwilling) to guarantee that there will be no further JPMorgan-like screwups leading to losses in the beeeeeeeeeellions.

I'm not married to any of these or other possibilities. Must lock in and capture profits. Period.

Still long FAZ. For now.

Update 2:51 am Interesting that an NBC host is saying this morning that Dimon is still upset with the White House, yadayadayada ... seriously. After the environment that allowed Wall St to rake in huge profits and still get bailed out, that's ludicrous.

This can't end well for most of the banksters, though I doubt the bosses on top ever do time in lockdown.

Update 4:18 am out of FAZ at 23.48, a loss of 0.18 per. Small, small loss. But that's not relevant. What's relevant is I didn't pull the sell trigger while it sat there hovering around 24.12 after the opening bell. I was not prepared to see it go from 24.30+ just before the opening bell to 24.10+ at the bell. Plenty of sellers, should've anticipated that. 

But I contemplated adding more. I felt 24 was going to be a new floor instead of sticking to price discipline. So instead of a decent profit, it turned into a small (paper) profit. And when it couldn't hold 24, it was a nosedive to 23.60. I held through a couple of dips below 23.50 and finally got out. The indices are turning green, which means the whole JPMorgan mess didn't spur a major selloff, but may have completed (temporarily) the recent downturn. 

It's annoying to say the least. But JPM has held above 37, AAPL is back to 570 and FAS, which was below 90 earlier, is now at 93.20. 

FAZ is at 23.32 now, still up 2% for the day. But until more banks confess their derivative sins, buyers will keep pouring in. Maybe. 

So, it seems A and C are still in play. The sellers are out of product and buyers are waiting eagerly (A). Or the machines are buying up the market and will sell it off in the afternoon (C).

Nowhere does it seem possible the market heads lower, not if it can gulp down JPMorgan's mess and move up.

Update 11:15 am Indices were green for a majority of the day, then sold off toward the close. Nasdaq finished barely positive (+0.01%) while Dow was -34 (-0.27%) and S&P was -4.6 (-0.34%). Essentially, they were flat.

Business Insider reported that Fitch downgraded JPMorgan, which is interesting. Why Fitch and nobody else? How much fear is there of Dimon and his minions? People may despise the banksters, but he is what he is and he's usually fantastically good at it in a way that requires doses of finesse, outright thuggery and charisma. In other words, he would've been a hell of a mafia boss.

Mike Khow of Options Action suggested that ZNGA is one way to play the Facebook IPO. Said that Zynga is trying to steer its users to the company's website, to capture more ad revenue, etc. Still not touching that. Just like GSVC, which had a huge gap down to 16 today (from 18+) and rallied to 17+. It sold off on ... what? JPMorgan news? Are you kidding me?

Maybe I get a few shares of GSVC the next time it touches 16. But with FB so focused on its own game (yeah, Zuckerberg and his hoodie were a basic F-You to Wall St), it clearly didn't help FB plays like GSVC and SVVC much this week. They both were up big already this year, so buying GSVC at 18+ (I've done it) is an act of greed, to a degree.

But, the day is about done and the lesson is clearer than ever: Take profits quickly. As soon as I held FAZ more than overnight, for more than a few hours (or minutes), it loses footing and falls through the ice. During the latest run (in the past 24 hours), I've owned it twice and had two very small losses. Both times, I had decent paper profits.

Back in FAZ before the closing bell. We're only 1/3 of the way through May and there's no clear catalyst in sight for the rest of the month. If Europe's financial disaster gets a little fixed up over the weekend, I'm ready with some gunpowder to load up long. But Greece doesn't fix anything soon with that cast of characters.

Update 11:31 am AAPL ran from 561+ to 574+ this morning during the post-JPM rally. Then it sold off back to 566+. I still anticipate a pullback to 546 (Fibonacci retrace). Apple had a little iCloud leak/peak today, and there was talk on CNBC about the Apple TV, a supposedly leak from Foxconn in China.

'People with knowledge of the matter'

I find it amusing and interesting that mainstream media would refer to supposedly credible sources — "people with knowledge of the matter" — rather than quote them when it comes to something like Facebook.

Bloomberg's piece about supposed soft demand for IPO shares doesn't bring anything new to the table. So what's the point of the piece? Doesn't really seem to be one, other than the reporter was assigned to come up with something about FB before deadline and this is the best she could do.

Seriously ... she refers to "two people" without offering anything but general blahblahblaah.

Here's the story: Facebook IPO said to get weaker-than-forecast demand (May 10)

What Facebook/Zuckerberg have said recently about the priority — product over profit — says more than anything written in vague references.

I'm not long GSVC or SVVC or anything FB related, so I don't care if the IPO sinks or swims. But readers deserve a little more than what this piece offered. I suppose Bloomberg won't push harder for something with more substance. So I pass on most Bloomberg links.

Turrbl Tuesday (updated)

7:00 am (Hawaii) Turns out Monday was no big deal compared to Tuesday's open. I slept through the first 3-4 hours, woke up to find that the indices are down 1.3 to 1.5%, and that my lone position, GSVC had dropped all the way to 17.50. But seeing it at 18.30 now was a relief ... until I refreshed my browser and realized that I'd forgotten that stop-loss order at 17.76.

In other words, I got GSVC at 17.72 a week ago, saw it run to 19.71 by late Friday, held it ... and sold it today for a 4-cent gain. Yeah. That sucks. The defensive measure, the "insurance" I had in case the market cratered, turned into a paper loss. In hindsight, I should've sold above 19, but frankly I imagined GSVC bolting above 20 this week with Facebook on its IPO tour.

It's something else to see a net account value rise nicely on just one fairly small position, then see it evaporate into a non event. Now the question is, do I re-enter GSVC at 1830? (Now 18.38.) Or is a play on the financials better? Or too late. FAZ is near its intraday high, up 4% to 23.02 as the finnies are in a bloodbath.

I'm going on the road in a few minutes, so managing anything will be almost impossible. Best to be neutral/flat in this market. But the GSVC trade today will take awhile to get over. It's just very difficult to manage things when the market opens at 3:30 am (Hawaii time) and I can't sleep early enough or stay up long enough.

Could be worse, of course. GSVC could be at 17 or 16. Then I'd be wishing I had a stop loss. Or I might be getting more shares.

Update 9:59 am Back in GSVC (moderate/half position) at 18.35. It held up on a selloff day, though vulnerable like nay other stock (as this morning showed). Still on the road, so I haven't had a chance to catch up on the market news. Looking at FAZ as a possibility (again).

Biggest question is not whether the EU and US get stimulus (stimuli?), but when the big money will flow back into the markets.

Felt real good to have GSVC the past week at 17.72. From this point on, though, for the next few days (or weeks), strict price discipline is required. Or I can have one position as a long-term hold and another for swing trades. I tried that with AAPL a few years back and did decent. Just couldn't hold on long term from 96 and 215. A woulda coulda.

Update 10:31 am AAPL bottomed today (for now) at 558.73, closed at 568.17. Lowest point since April 24, when it hit 555+ — the day before the earnings report. Is 558+ going to do it? Has it really filled the gap? I still look at 546 as the real test (Fibonacci retrace from 396 to 640).

Can't blame anyone for picking up some AAPL down here though. Nothing is wrong, nothing has changed (really) since the earnings blowout. But the worst in Euroland is yet to come, probably, and I would love to get some apples below 550. Is that greedy?

Which comes first for AAPL: a catalyst or big money simply having nothing left to sell any more?

Update 11:23 am Added a handful of FAZ. I realize the Greece/EU pile of shit news may be done (for now), but it's a little protection against my long position in GSVC. What I really want is to nibble into AAPL ... but without a real catalyst in the near future, there may be enough time to be patient.

As Germany, Greece and the EU, Germany is finally telling Greece that it is S.O.L.

National Post: Germany to Greece: No austerity, no aid

Facebook Tree

A look at Facebook-related plays. Are they good for a long hold or near-term trade? Both? No answers here. Just information. My take: neither GSVC or SVVC are for the long term. Remember CMGI during the Internet bubble? But as a quick trading vehicle, could be in play.

GSV Capital (GSVC)
I'm instantly skittish when it comes to stocks that have no numbers to work with (re: Yahoo statistics), but these guys have a cut of Facebook and another cut of Twitter.
News: Seeking Alpha updates
Yahoo News: Ascendiant Capital Markets initiates coverage (May 2 2012)
Helix Investment Management: Invest in Facebook, Twitter (Dec 8 2011)

Firsthand Technology Value Fund (SVVC)
SVVC owns more shares of Facebook than GSVC, but has already done a secondary offering that deflated the stock. Does this mean they're done with more offerings? Or is there another on the way? Don't know.
News: Seeking Alpha updates
Yahoo News: SVVC completes initial investment in Twitter (May 2 2012)
Evans Capital: Time to cover short position (Apr 19 2012)
Stockerblog: Funds that own Facebook stock (Mar 30 2012)

Zynga (ZNGA)
News: Seeking Alpha updates

Facebook (FB)
Story by MarketWatch about Facebook's IPO, privacy issues.