Pump You UP, Girlie Market!

In case you didn’t get the memo yet – it’s Monday and that means Hans and Franz are going to pump you up, girlie market!

Sometimes it’s almost humorous reading all the criticism that gets thrown at me – well almost. In the last two weeks I got slammed for not posting an alternative bearish scenario. With an attitude like that, I was told, it was clear why/how this market kept running up higher and higher. Of course that stands in direct contrast to the folks who slammed me for posting several possible scenarios in the not so recent past, which by the way is what I do when I see a justifiable alternative. Many times there is one – and sometimes (and admittedly that’s more rare) there is almost none – at least not one that I would give a respectable probability. Which is when I risk ridicule and derision by only posting one single scenario. Looks like I got lucky – twice.

Of course I don’t see the same people posting here today conceding that I was spot on. But if I have learned anything about blogging in the past year and a half is that it’s tantamount to swimming in a pool of crocodiles. You’ve got a very small margin of error and if you make a call you better be right. Otherwise the beasts will eat you alive or at least break up tent and move on to the next oracle du jour.

Something I also learned a lot about is the world of retail traders in the 21st century. The flood of daily information is everything now and personal thinking and analysis has been replaced with blog hunting. Okay, let’s not kid ourselves – reading Money magazine and perhaps watching CNBC has been replaced with blog hunting. Either way – the average retail trader now seeks out a set of online trading gurus (i.e. bloggers, analysts, wunderkinds, etc.) and then arrives at a set of trades through subjective interpretation of their collective market perspective. So we now have traders create their own collectives/realities and as a bonus you get all the soap opera drama with it. Bears will seek out bearish blogs – bulls will seek out bullish blogs – and then we have the folks somewhere in between. Some of those gen Y retail traders are actually quite creative in facilitating this new flood of information quite well and to their advantage – but there remains that overwhelming majority that continues to seek out the ‘sure thing’ – that one blog which serves those easy trades on a platter and on a daily basis please!

When I started this blog I had a vision. What I wanted to create was a nexus of smart traders that would collaborate with each other to beat the gnomes at the top. After all, they have all the connection, all the money, all the intel, and get all the breaks in the book and then some. In one of my early posts I made a reference to “Slippery Jim” a.k.a. The Stainless Steel Rat” – and somehow the term stuck and we kept calling each other ‘rats’ ever since. Not a bad or disparaging term as we indeed live in the cracks of the financial system and scurry around to grab a few crumbs here and there. The big cats are the ones running the show and if you have any doubts about that then read Matt Taibbi’s latest controversial piece in Rolling Stone “Obama’s Big Sellout.

Although this admittedly bearish leaning den of doom has steadily leaked readers since this summer there are a few hardcore rats remaining. And looking at their daily contributions I must say that I do enjoy coming here and that it’s worth plunking down the fairly hefty hosting fee every month. The subscriber base has pretty much imploded as retail traders as a whole have been either moving on or kaputt-u-lated after a ten month bullish orgy. So, in terms of financial rewards – it’s not why this blog is still here – believe me. Admittedly I have cut down on the blog posts a little – 2009 has been a bit taxing on my soul and fervor. But I think I’ll keep this thing running as long as I can – which means as long as I can muster up the energy to talk about the markets. And I must be honest here – what really propels me forward these days is the notion of seeing this house of cards fall apart, as it must eventually. When exactly – well, that is the million dollar question of course – and all I can do is to continue to offer my charts and try to have fun.

Which is what brings me to something else. Something I realized last week was that I was so pinned down by wave counting and watching the market as a whole that I completely forgot how much fun it was to seek out single trades and to do what I do best: trading. Somehow I had dropped the ball on that earlier this year – maybe I was so enamored by waiting for Godot that I forgot one of J.K.’s basic tenets: It’s not a stock market – it’s a market of stocks. So I threw out a few trades which garnered a bit of criticism but a day or two later mostly went in the direction I had pointed to. Actually many of them were long trades and of course I got heat for that as well – LOL. But in the end it’s not about being long or short or being popular – it’s about banking coin – and that’s what Evil Speculator will be solely focused on going forward.

Anyway, I have a conference call scheduled in 15 minutes. I’m now going to post a few charts I collected over the weekend. After my call I will return with a medley of trade setups – and may of them are… wait for it… short! Yes, crazy Mole just doesn’t know what’s good for him.

First the wave count – nothing much has changed and I believe that we will complete this expanding triangle. There is a chance that it will end truncated, which is the only alternative I feel comfortable showing right now.

In case you wonder what has fueled this ten month monster rally in equities.

Interesting how the Fed’s liquidity swamp has been slowly drained in the past few months.

I’m not sure this is going to actually happen – sometime they change it last minute. But if they drain all that’s left it should make for some interesting times.

At the same time short term treasury notes are paying zilch – so, if so much money is ‘sitting on the sidelines’ and everyone supposedly wants into stocks, how come so many bond traders are willing to endure zero or even negative yield on the short end of the curve? BTW, that is not necessarily a rhetorical question – maybe I’m missing something here?

The Investors ‘Intelligence’ (ahem) Survey remains stuck in super bullish territory. Six weeks of sideways tape has investors fuming the mouth eager to bet on the next leg up.

Alright – that ought to keep you busy for a while – I’ll be back with some symbols before the close when you need them.