Bear Slaughter Monday Rub Down

I had a live camera running at the NYSE and here are some of the most gory scenes I had to witness today:

BTW, it has occurred to me that some of you might not get my constant references to the movie ‘300’. Well, there’s more to it than just the gory and nobody describes it better than Matt Tiabbi in his latest piece.

The counterfeit nature of our economy is troubling enough, given that financial power is concentrated in the hands of a few key players — “300 white guys in Manhattan,” as a former high-placed executive puts it. But over the course of the past year, that group of insiders has also proved itself brilliantly capable of enlisting the power of the state to help along the process of concentrating economic might — making it less and less likely that the financial markets will ever be policed, since the state is increasingly the captive of these interests.

I finally took the time to update my TYX-BAA spread chart again – which as you know I have to do manually. And it pains me to say that the data makes complete sense now as it supports what the daily zero has been screaming at us throughout the past week.

During none of the past drops did the spread bother to budge by a millimeter – on the contrary it keeps pushing towards the 2.0% mark.

My NYSE observer Bruno stationed in Manhattan just confirmed to me that ‘risk ist in und bearish ist aus’. There you have it, rats – Bruno is focused like laser on the Wall Street fashion world.

Today’s session is probably one of the most unnatural looking ones I have ever seen in my trading career – that perfectly geometric channel up should be referenced in a TA chapter on channels – it’s a rare find. It’s also one that cost me a shitload of coin as my bearish stance was tested to the breaking point. Short story is – I have committed myself to letting my puts expire – no matter what. This is however something I do not recommend to any of you rats – if you cannot afford to lose the money you got sitting in puts then just stay in cash until this tape confirms a trend change. I know – I keep harping on that but based on the desperate and frustrated comments I keep coming across a lot of you guys seem to be way too over exposed.

Wave count – well, I really don’t have to put up another chart – bottomline is that blue is in and orange is almost out, UNLESS we see a strong snap back tomorrow. Which probably is what many bears are hoping for, which is I don’t think it’ll happen. Today was extremely bullish with NYSE A/D ratio closing at a solid 4.84.

Program Trading Update:

geronimo/ES: +5

That’s my one consolation – geronimo loves a dropping VIX, which is an observation that will soon be implemented as a new rule. Also, since Thursday morning geronimo has been running via MultiCharts – so guess what – no more empty alerts! Wohooo! Thanks again to Eric who’s been busting his butt to make this happen in record time. He’s now working on instant message alerts as well – which are coming soon 😉

A final thought: Many of you have had a lousy day and I’m going to ask you for a favor. Go out there and hit the gym or take a walk around the block. Don’t go home and let your frustration out on your wife/girlfriend, your dog, your children, or that damn neighbor of yours who keeps using your green trashcan when clearing his lawn. In the end it’s just money – I know this sounds a bit silly but simmer over it. You decided to trade an obvious erratic and manipulated market – and particular the latter is something we know but accept as a fact, thus we don’t blame our losses on it. So, you made your choice, so don’t fret if the big boys just took your lunch money. You own your trades and it’s not someone else’s fault – either you are smart enough or connected enough to survive this tape, or you are not and today had to pay your dues. I am one of the losers today but I knew that we would get a rip 10 days ago and I warned all of you about it. The difference is that I am long term positioned and that I don’t care if my puts expire worthless. But again, I’m completely crackers, and I encourage you to not trade the way I trade because I don’t want to see you get wiped out.

Cheers,

Mole