Saturday, May 31, 2008

1st week of a new month biases...

As is the trend, we ran pretty good into the end of the month. So, where do we go from here? The initial trend would be twofold (actually 3);

A)reverse the prior months biases. Meaning that the stuff that was cold, mainly, will play catch up IF the market is destined for higher ground. So, brokers, banks, and maybe even home builders would have an up week this week. This bias is not as profound as end of quarter Window Dressing, one of our stronger trends, but it does come into play.

B)Sell in May, go away. This is a saying everyone knows for a reason, it usually proves to be true. Historically we are coming into a bad time for the markets to try to hold onto gains. BUT, shortly we'll be back into earnings season, and the thing is in this market the momentum names are very attractive for a trade into these earnings. Ya never know when that will end, but some sectors, particularly the Ags and Solars are still early stage enough to trade them. I may do an EARNINGS RUNNER list and class this quarter for earnings, let's see how it plays out.

C)Let's watch the news flow this week. This is a key week for us as traders. The market closed Friday literally right at strong resistence. 1400 on the ES and roughly 750 on the ER. I think if we get a gap monday it's fadeable either way as traders will try to figure out if we are going to bust that resistence and attempt to head for yearly highs, or if we are going to get a steeper pullback.

I was leaning shorter and still kinda/sorta am, but I'm more neutral than anything else here and would prefer to stay nimble. There are many times when we have a clear bias, this isn't one of them. Let's see how it pans out!

TUESDAY 9;15 to 10:30 we are doing a FREE class and we'll discuss the upcoming June LIVE trading seminar, with money back guarentee! So, try to be there, its FREE, no risk, all reward!

See ya on the other side,

Michael "Waxie" Parness

Thursday, May 29, 2008


A few people have emailed me about this trade idea (hey, I'll trade anything if it looks good!). Apparently many of you do indeed trade commodities. CORN is rocking for us and looks good to go down even further. As I stated a couple times here recently, a break below 584 was key and I think if it can hold below that or close to that it should see 550 soon enough.

In the meantime, if I'm not mistaken Corn was around 605 when I called it short. It's now up over .20 which is a very nice move. I suggest taking some profits and going from there. Still think 550 and then if we get real nice move down maybe even a retest of 500,but thats a long way off.

Trade 'em, don't own 'em!


P.S. I do think oil is peaking here near term, but shorting that thing is so dang tough, its a beast. I just think that at some pt it has to retest $100. But, I'm the guy who called it long to $100 and then $150 when it was $32 and then $70s! So, what do I know! Hehe!



Is almost always to the upside as funds square away positions and try to get long the stocks that have done the best during the rest of the month. Its a mini Window Dressing time.

This mini rally we have doesn't look very strong, next week will be very telling as far as where we're headed. I just don't see us going much further to the upside without a decent size pullback, but hey, the market can buck that idea in a hurry. I still say CASH is king here until we get a clear direction. I always try to teach clients that there really is very little advantage to holding a position overnight, unless you can't watch your stocks, or can't trade altogether. Think about it, if you trade out of everything every day and start fresh you can get status as mark to market (check with your acct on this*), you can miss all the big drawdowns to start a day, those panic pains when you watch a stock you own get bad news and crumble, or the whole market tanking. The only thing you may miss is a huge gap up, or news that comes to push it way higher. But, if you average it out, you are probably better off just selling everything at days end and rebuying the next day.

Oh, you do lose the capital gains benefit if your stock appreciates significantly, that is true. But, in my view, I like to be mostly cash end of day, with some position stuff leaning one way or the other depending on what's being set up, or if its a swing trade for a specific trend where I do feel that there is a high probability that the stock will gap up during that phase more often then not. Say you are buying GOOG calls into earnings, GOOG tends to gap up a lot during that time frame, so you may not want to sell those calls every day, you may want to hold them. But, generally speaking I like to sell at days end and restart. It's hard to recover on a day when you are wrong to start the day and down a lot because of stuff you held overnight. Far too often I see (and I've done it myself) people then chase the loss to start the day on their swings and end up doubling the loss and feeling dumb.

Friday is last trading day of the month. Again, usually a bias to the upside, but one thing to keep an eye on is that the Nasdaq is sitting right at 2500. Thats a key resistence area. A clean break would potentially send us a lot higher, but a clean break DOWN and failure up here could lead to a bigger drawdown in the market.

Today I called V calls, the $80s. I'm not crazy about being long or short here on much, but with MA moving the way it did the thinking was/is that V can see new highs and try for $100s shortly. We'll see, its a very small play, no harm, no foul.

Next TUESDAY at 9:15 to 10:30 we are having a FREE class for ALL so we can show you some nice techniques to help your daily trading, and also to sell you all on the idea of coming to the NJ 7-day Live seminar. If you have any interest in that, email me - and I'll shoot you some info!

See ya all tomorrow!


Michael "WAXIE" Parness

Wednesday, May 28, 2008


Market just traded up and down, down and up most of the day, sloppy and choppy, finally getting a bounce late day.

I think we should get a bigger expansion move into Friday and end of the month. Which way? My guess would be higher for all the reasons listed yesterday. End of the month buying bias, etc. Having said that, I'm hedging here since I just think we are so insanely overpriced. But, overpriced can get more overpriced. Bubbles get bigger until they POP!

I'm still under the weather, I just wanted to check in. I'm hoping the financials get another bounce, I would like to buy some puts on GS. Its tradin like it wants lower.

Have a great day tomorrow, folks! Make sure you email me with interest, if you haven't done so already, in the 7 day LIVE trading seminar in New Jersey, offering the (mostly) money back guarantee!


Michael Waxie Parness

Tuesday, May 27, 2008


Oil dipped, so did commodities, cooling things off and despite LEH getting their earnings estimates cut from profit of .50 cents, to a loss of .50 cents, financials bounced as well. Tuesday if oil follow through to the downside perhaps we'll get a further bounce, we shall see. Market overall usually has an upside bias last week of the month as fund managers look to get long the winners in month to month window dressing. I thought we'd pull in Monday, but that was not the case at all. A lot of people got short LEH and other brokers because of pending news and some of that came. LEH gapped down on the news big and then powered to close at HOD, plus over $1. The oldest trend in the books? Buy the rumor, sell the news. The second oldest? Sell the rumor, buy the news!

Tonight I'll be short, I'm a wee bit under the weather, so is my oldest. The joys of being a parent, getting every possibly bug your kids get! Hehe. Just remember to RULE and don't commit here either way, CASH IS indeed king! Waxie

Monday, May 26, 2008

The coming week...

First off, hope everyone had a safe and mindful Memorial Day mini-vacation. On Tuesday its back to work, though. So, let's get cooking!

Market right now is Futures UP slightly overnight. Probably a pretty easy short for anyone up, though I guess its possible we get a big gap up tomorrow. I just don't see us going up early in the week much. We'll see soon enough. I would think that we can bounce later in the week, but it just doesn't seem, baring news, there is going to be much buying pressure early this week.

Last week you saw evidence of why it's tough to really stay long this market. The market almost always falls a LOT faster than it rises. This market has been teetering on a big drawdown for a while. Up volume has been pathetic recently and frankly we are way overvalued here. The economy continues to worsen. That's not a time you want to throw your money into the stock market, sorry. Warren Buffett over the weekend came out and said that he sees a LONG and BAD Recession (and that we're already in one - duh!).

The market has rallied off the March lows based on the notion that the 2nd half is going to be much better. This is as foolhardy a notion as I've heard in a long long time. Trust me, I hope I'm wrong, I'd rather be told here that "hey, Waxie, you said the economy would suck and its rocking!" then have us all feel the effects of what I believe is going to be a pretty devastating economic downturn.

I think the banks are just a gimme short. I think GS, SOV, C, WB are all clear shorts. I think MER is a short and I think LEH is a short and I think the SKF has a long way to go (inverse financials - so shorting them).

Look for us to retest and bust below the March lows in the not too distant future. While its still possible we'll see a new HOY, I doubt it now. We look like we may bounce at some point this week but then just remember the adage - sell in May and go away! It should work and be very good advice this year. Again, I hope I'm wrong, but for those of you who want to short the market, you're getting your chance.

If I am right, though, watch the ER (Russell), I think it should see under 700 at some pt this week. If it can't hold that then it'll see 675 pretty fast.

let's see what shakes, its a new week, I mean, maybe they come back buying, anything is possible.

Either way, remember to RULE!

FYI - if you haven't signed up for the 5 day LIVE New Jersey seminar, please email me @ to sign up. There is a very nice money back guarantee being offered. I think now more than ever is a good time to learn how to rule this market, there are ample opps whether we go up or down, but in a down market you better have some skills or you are doomed to get crushed.


Wednesday, May 21, 2008

Turn out the lights, the party is starting to look OVA!

Market tanked hard after the Feds came out and said, duh, economy is definately NOT getting better and in fact is getting WORSE, real estate is going lower and inflation is troubling.

I mean, are these surprise comments? No! But, as always, optimism will drive a bear market rally to the top of the heep, only to leave a lot of people holding the proverbial bag who bought into the notion that the "bottom is is".

Let me be emphatic about one thing, there is no such thing as a "bottom"! Financials are so vastly overpriced still its insane. The brokers in particular look at least 50% overpriced and yeah, that includes Goldman Sachs which has at least 25 - 30 BILLION in bad debt on their books from what I've seen and I still say sees $125 or lower this year. Go against that call at your own risk! I stick to it.

The short list we did is starting to pay off, I would look at some of the recent momo moves for potential shorts if we continue selling off. I like SOLF a lot SHORT now, and we called the puts today and are up on them a wee bit already. Look for a lot of this type of stock to retrace quickly if the market gets an extended downward move.

Remember, the reason why "Sell in May and go away" is in the vernacular is because it's a TREND that has worked many times over the years.

Also remember that nothing goes in a straight line, so while I think we are looking increasingly bearish, I would look to unload longs on the rallies from here and also look to set up some shorts on any bump on short covering. If I'm right, and obviously that's not a given, then we should trend DOWN and then get a nice bump next earnings period. Market has seemed to follow that trend the last few quarters and it seems to want to do that now.

Oil at $130s, jeez louise, it don't stop! I would think now we have a legit shot of seeing my $150 target this year. Sucks, thats one call I wish I was wrong about, trust me. Costs me $100+ to fill up my SUV, this week I am selling it and leasing a hybrid. While I'm not a huge believer that hybrids are the answer, since I want to dump my truck anyway, might as well do a bit better, right?

In the meantime, let's see what shakes out here. We are probably gonna be sloppy and choppy. DOn't expect just a total dumping, but again, I think we look pretty putrid here. BUT, also remember that even though the Fed said things are crappy *again - duh!* they also DID say that the 2nd half of the year should see a pickup.

Do I believe that? Not a shot, but hope does, indeed, spring eternal!



Monday, May 19, 2008

Did anyone see da rally?

After a huge monster type blowoff early Monday, the market sold off pretty strongly, sending recent momentum favs and beat up financails tumbling back down. The brokers and banks were up early but could not sustain any gains and most finished REDDDD.

HOT FLASH - the financials are DEAD MONEY, folks. Stay away, avoid them. First off, even if they were "bottomed" which is ludicrous in my view, why would you bother taking LEH or MER or C long when if the market rallies you'll get a lot more bang for your buck with one of the leaders (POT,FSLR, MA, etc)? Risk vs. Reward is everything folks and the financials provide none of that. The fact that AAPL sold off is very telling potentially. I think the early strength and seeing stupid stocks as I call them (our SOLF, CHNR, etc) running on fumes usually spells a near term top. I said for a while I thought ES might see 1450 area and we got awful close today. While I could still see us going higher off a pullback, I think we are getting VERY toppy here. Even if the economy was turning around (rubbish) the market isn't going to 25,000 anytime soon, so at this pt we are way overbought.

You see my corn? Still going down. We'll see. Right now I would look at dips as buying opps til proven otherwise, but I think we do need a pause. And remember the old adage, GO AWAY and sell in MAY!

I'm not ready to start shorting at will, though GS and such look lower to me here still unless news comes to propel them higher.

Trade day to day here, we are so choppy you gotta stick with whats working. Yes, I am noncommittal here cause I think long term bearish is right, short term choppy to down and chop downs being bought. Stay ready and stay sharp!



Thursday, May 15, 2008


OK, so we got a very nice up move in the markets Thursday, extending the rally without the financials. Once again it was on low volume, but a rally is a rally. Watch for the pin action on the momo players, as usual. SOLF, our Stock play of the week ROCKED and clients are going nuts for the bloody dang Ka-chingos!

ENER also rocked again. Couple to keep your eyes on; DE (looking $85 pin) and GS ($185 or $190). ALso watch the usual suspects like AAPL and RIMM and of course GOOG.

I gotta finish my last two chapters of Rule Your Freakin' Retirement tonight for publisher so I'll keep it brief.

This weekend is HUGE, Yanks/Mets, let's go Mets! I know, most of you could care less, you root for other teams, but it's a huge weekend for Waxerino.

Speaking of baseball, you know what sucks about our society? No, its not war, its not starvation, its not teenage pregnancy, or drug abuse. No, none of that, it's that pitchers don't ever go more than 6 innings anymore! It's sad, really. I pitched as a kid and teenager until I threw my arm out and now I can't even reach the freakin' plate, but before I digress, every baseball fan loves it when a pitcher goes 9, fans 11 and gives up 4 hits. This isn't DH vs. no DH argument, there is no argument, pitchers are supposed to go 8 or 9 innings unless they get bombed. Now? Micah Owings on Arizona, who seems to be a better hitter than pitcher, is 5 and 1 and hasn't pitched more than 6 innings in any start. That's ridiculous. And, the excuse is that because of the big salaries the teams are worried about pitchers getting injured. That's nonsense, how many times was Seaver or Palmer, or Goose or a ton of pitchers on the DL back then? I'm betting you had a very similar ratio, or even better. It's a real shame.

But, what will be more of a shame is if the market chops around tomorrow like it did a lot today. Chop days are toughest days to trade cause if you overtrade them you end up stopping out no matter which way you play it. I think next week is gonna be a big directional move. Maybe we get to the new High of Year we've discussed. S & P looks like it wants that 1450s mark and we'll see if I was right about that area being a top of sorts. I guess we could go to 1500s, or beyond. I don't really see it, but ya never know. Unlike pitchers who you know aren't going more than 6 innings, a rally can go on, and on and on and where it one knows!

See ya manana, let's rock!

Michael WAXIE Parness

Wednesday, May 14, 2008


This rally is getting long in the tooth, I think its nearing its end. Not willing to out and out step out short yet, but I think we're about there. I thought Russell could see 750, and it might but that would be the top more than likely.

Did anyone notice CORN? It's under $600 and headed to $400s not to far from now. We'll see, but I am sticking to my call for that sucker to be POPPED!

There's a bubble trouble in many areas right now. Let's see which one pops. Meanwhile, the 3-Day Options workshop is ROCKING! Day 2 is Thurday, youc an still sign up for the LIVE 3rd day trading Options ALL DAY and NOTHING but options!

Email me - if you have an interest.

In the meantime, let's see what shakes out Thursday and go from there. I'm hoping we gap up as I think that would be an easy fade. The way we closed was putrid and so a gap up is almost an automatic short signal unless there is some kind of news that moves us.

I'm beat, so keeping it sweet and sour here tonight. See ya manana!


Michael "Waxie" Parness

Tuesday, May 13, 2008

It's OE (Options Exp. week), do you know where your profits are?!!!

OK, little folks, its time to remember why it is that you read my blog, why it is that you even bother to pay any attention to me. Do you remember why?

Because I AM MASTER OF THE MARKET and I know what the hey I am speaking about, babies.

Now, here is it, here it is in plain English.

#1 - did ya all catch that little ENER comet? Wheeeee, it never stops going and going and going and goingggggg!

Yes, I still think it has room to run, but, and this leads into the next topic and one that I will cover EXTENSIVELY in the 3-day Options Workshop YOU need to attend starting tomorrow!

Email me; and I will get ya signed up in timeeeee!

ENER has a TON of upside, I think, but this is OE and that means that they will likely PIN ACTION (read former blogs from OE last month for some more info, or better yet TAKE THE WORKSHOP!)

Pin action from here on out will define the rest of the week. It should get interesting because a lot of the momentum stocks are pinned right now around strike prices -


We'll be watching for which way they want to lean us. If we get a clue it could really lead to big ka-chingos thursday and friday. That's what I'm checking out.

One tiny one I like here is ICO. They may pin $10 but on the next up move in the coal sector that thing looks poised to see a lot higher. Of course, if coal gets smacked it'll retrace to $7s more than likely, but if it can get some momentum over $10 it should see $15 pretty easily. Remember that a rally drags the tiny ones up last usually, the ones with the least fundemental base. That's usually the last leg of a rally which culminates with a blowoff top day where everything goes up and crazy at once. We haven't had that yet, but I am seeing some irrational buying on momentum stocks now. Watch SOL which reports tomorrow before the open to see how it responds to earnings. YGE should follow its lead after they report. Not a sure thing, but could be a nice tell. The market usually works that way.

In the meantime, I am brain fizzled from searching for apartments. How nuts is this? I was all set to move downtown, NYC. Found an awesome pad, nicer then my mansion over here. BUT, the NYC school system doesn't have any room for new kindergarden kids, which is why I was moving in the first place! And, call the city and what do they tell you? They ain't got no freakin' clue. Man o man alive, I tell ya, the amount of idiocy is mind boggling and mind bending. How do you have a city like NY, which I love love love and yet no one thought to build more schools cause they were too busy building (and giving tax incentives) condos that NO ONE is buying now. Who would buy a condo in this market? You gotta be nuts. Give me 2 years, I'm picking up the pieces, trust me there will be just that - pieces! But, in the meantime, my 5 year old don't have a dang school to go to! Unreal. rrrrrrggggggggggggggggggggggg!

So much for zen, hehe, ah, how quickly it can go returning to da cityyyyy!

BTW, my film, which some clients have seen at various festivals around the country, is playing in NYC end of May for 4 showings. Looks like May 30th and 31st. If you are interested in attending email me at and I'll give you the details. It's in NYC, so if you live in CA I'd love to have ya, but you can pick up the film at Blockbuster in June!

The film is titled Crazy for Love and it has a great cast. Well worth your viewing time and you can come meet me.

Let's rock this town, folks, let's rock!

*OPTIONS SEMINAR STARTS TOMORROW AT 10 am!!! We have about 50 people so far attending, it's gonna rock!


Michael "Waxie" Parness

Monday, May 12, 2008

Back in da saddle againnnnn!

Did you dudes and dudesses see dat comet? Yeah, that was me, flying around in da Yoga zone whilst you all cracked da market's code, right? Man, I REALLY hope you left me with some Ka-chingos! I can sure use some after spending a few days at da Inn at Woodloch, in PA. (Highly recommended) Was very nice to get away from trading, away from da city by the river that runs foul. Away from all the traffic, and the noise and the city that never sleeps, and me who sleeps even less when I'm in the city. Basically, it was good to get away, but now I am BACKKKKKK and ready to RUMBLEEEEEEE. The market is mine, beeeactch, she is my concubine and I will ravage her as though she is a screaming demon begging for mercy! And, if you can figure out what the hey that means, I will donate $50 to your favorite charity.

OK, so, now I am back and I gotta make you guys and gals some ka-chingos, right? I mean, that's what you pay me for, right? You are ALL coming to my toga trading party, I mean my 3-day OPTIONS WORKSHOP this Wed/Thur/Fri, right? I thought so. If you haven't signed up, email me at and get in the game now.

Shameless plug over and out for the evening.

So, I don't know, I didn't do much today other than drive 4 hours back all zenned out. Kinda sucks driving 4 hours zen, hitting traffic and then sitting in a business meeting where no one really wants to hear about your zenness, ya know?

I did happen to notice that ENER was up over $4 today off my most awesome call as Stock Play of THIS week. That's a very berry nice way to start the week off. Waxie like.

Speaking of like's I want to give my first blog (I think its the 1st, but I don't have time to look back) shout out to Zena and Sharon. They kept me company at Woodloch, kept my publisher unhappy because they gave me the excuse to procrastinate and gave me my first adult pajama party! Coolio. See, and you all thought you had to grow up? Nah, its all just an illusion!

OK, so enough about dat, ya'all, I got a market to rule, babies and it's all for youuuuuu. This is option expiration week, folks and you know this is my favorite week of each month to kick some market butt. Nice day for those poor putrid investors Monday, its always easy when the market goes up. I wasn't around to see it, but I read. I think Tuesday probably is somewhat of a congestion day, and honestly I have to find an apartment this week so I'll be out most of the day. I'll be back Wed. and teaching the workshop (which you will ALL attend, I command you!) and trading Options all day long, my little newbies. So, join me and rejoice.

And, of course, send a prayer out to Bejing, it could and has happened here. We are, after all, part of the same thread. Mother nature does not mess around unfortunately. I had dinner with a Chinese friend ( is going GLOBAL baby! We are selling in CHINA shortly!) and we discussed a lot about culture and just, well, just humans and da truth is, we really are all the same. So, keep it real and be safe. Zen out.


Michael "Waxie" Parness

Tuesday, May 06, 2008

Nice bouncey pooo!

As suspected 1400 became nice support off the gap down and we then zoomed once we broke back above it! Nice trading day for da clients, very nice indeed!

Our OPTIONS are just completely smoking! We caught NYX late day today for nice jing, I think it sees $75 then maybe $80 near term, we'll see. DRYS awesome. MELI awesome. We are just completely rocking the houseeee! If you haven't signed up for the OPTIONS 3-day online seminar with the LIVE online trading all-day options, you need to do so now! Email me @ and I'll send you the right wayyyyy!

In the meantime, CSCO reported so-so numbers, DIS reported good #s. They are all saying now that DIS #s mean that consumers are still spending. OKEY DOKEY girl from moskokieeeeee! Hehe, thats funny. April was one of the worst months in the HISTORY of our economy for bankruptcies, but people are spending money left and right! Ah, huh, sure they are.

I'm not, I've cut back tremendously. I want to have something for a rainy day cause that rainy day is is here right now. This is the disconnect in the marketplace and its always interesting because logically we should not be rallying, yet we are. At some point, though, water does indeed find its right level. This market, as I said it would, is rallying, but the best thing about the rally is its gonna set up a really nice shorting opp. VERY soon. All the pundits are now jumping on the bull ship and so I suspect that at some pt near term we're gonna hit a real brick wall and fall off this glass horse. I hope I'm wrong, I love being wrong when I'm bearish. The higher we go, the better the trading, but I doubt I am gonna be. Years of experience tells me that this type of rally is the type that usually ends ugly. Low volume rallies in a bear market. FNM #s were horrid, they are diluting the stock and yet the stock rallied hard and went way green. That tells me that we are once again in that wonderful place they call - irrational exuberance! Love that Greenie guy (the original GREENIE!).

The stuff I like now are the laggards. What happens in this type of market is that the leaders get extended (did you see AAPL early day, thats an extended stock same with GOOG and BIDU). So, they pick up the laggards that don't have any real fundementals to support them longer term, and they drive them up as momentum squeezes. We saw that today with CSIQ, SOl, and a lot of the Ags. Thats a sign that we are watching for a top. Now, I don't think that happens til at least 1450 - 1460 on the S & P, but we're at around 1420 here, so thats a couple or three good days (or less) so we're not that far off. It is possible we get to 1500 on the S & P. So, we'll have to see, but in the meantime let's just go with the flow. This is the thing about trading, you really have to forget logic and your opinions and just go with it. Don't fight a market like this, figure out whats lagging and go WITH it.

NYX has lagged it, they blew out earnings, the stock SHOULD go higher. How high? I don't rightly know, so you take it and you set a stop and you trail it as it goes and you lock in profits at resistences like $75 and then $80 and you see if you can ride it higher. Worst case you have a good risk/reward situation because you are setting an initial STOP, meaning your absolute worst case loss is limited, while NYX could concievably go to $100s!

That, my friends, is what trading is all about! Good risk vs. reward!

BIG Ka-chingos, and small ka-changos!



Monday, May 05, 2008

A new week, the beat goes on, and on...

OK< we'll see, but as I stated last week here the week after FOMC week is almost always a reversal, at least early in the week, of the action the week before. Since we rallied post-FOMC it made/makes sense we take a pause. It'll be interesting to see how this week plays out, there's not much news, only some earnings that mean something. CSCO reports Tuesday after the close. I have no insight into CSCO earnings, so I won't even dain to make a prediction.

MSFT walking away from YHOO deal caught a lot of people by surprise, including me, but thats why we don't try to play seer. Market was annoyed by the news and it contributed to the days action, though today was the LOWEST volume of the year, which is bullish near term as we pulled back on lower volume then we went up last week. That's usually bullish.

I have some insights I'm going to share with clients tomorrow about the way this earnings season has played out and how I think it should help us make some money moving forward. Suffice to say, the hot get hotter. It's been that way for a while now, but its becoming increasing apparent that this is a very narrow market. Financials led the way down today while momentum stocks like GOOG, BIDU and all the AGS, the hottest group on the planet were on fire once again.

Off topic, but I LOVE Corn short here. Symbol is /zcn8 for anyone who trades futures. The issue with playing futures like this is that if you're going to ride it its hard to do unless you don't use margin, or use very little. Otherwise you end up getting whipsawed again and again. Trust me, I know, I've had it happen a few times. Sucks when it happens and then you are right, but that's the same with anything in life, I guess.

Meanwhile, I think in this market it pays to be mostly cash, still. So, that's the way we're playing it. Some interesting earnings this week CSCO, PCLN. PCLN has beaten and guided higher last two quarters and stock has zoomed, but its been downgraded lately so we'll see if it beats again. The concern is that with the airlines consolidating the online bookers will lose some/a lot of business. Guess we'll find out.

OK, so back to corn.

About a year ago I said CORN would rock, which it clearly has. It's gone at least 175%ish in that time. I thought Corn would go nuts because of ETHANOL. Farmers were given huge subsidaries to grow corn, so much so that corn "land" meaning they are using land previously earmarked for other crops just to get the kickbacks.

OK, so fast forward to the current state of affairs. A REPUBLICAN Congresswoman is submitting a proposal to freeze the plan on Ethanol. Now Bush and O'Bama REALLY stupidly support Ethanol. Ethanol is a very very very poor idea, it was a political stop-gap and it has no real benefits to our country. What it does is line the pockets of some politicians (the farmers have a VERY powerful lobby), and the farmers who are taking advantage of these ludicrous benefits.

Further still, there is a supposed food crisis in many parts of the world, and as the price of food rises it makes it more difficult for the poor to eat.

Frankly, its rather disgusting. Now today several countries want to have a RICE CARTEL!
It's insane, truly insane. This isn't oil, you can't eat oil. This is FOOD. You don't have cartel's on FOOD! Insanity. Look, I like making money as much as the next dude or dudess, but not if I'm driving people to their graves out of starvation.

Lest I digress, I believe that there is going to be a backlash on Ethanol. Anyone with 1/2 a brain knows Ethanol is not any answer to our reliance on oil. Like anything else (look at Real Estate) there's now a glut of corn out there. Drive the midwest and you tell me if there is a corn shortage, its fantasy. At least it is today, Ethanol, if the current bills were to stay put, would need almost all the corn grown to support it each year. So, THEN there would be a true food shortage. And, as you take away land that was used for other food, and for cotton and other commodities, then you create a situation where you have a shortage of EVERYTHING. And, that, my friends, is just another example of how lobbies in this country are dangerous. When one group has the power to buy legislation, it creates these kinds of situations that put the vast majority at risk.

In the meantime, I do think a backlash is coming shortly and I think if ANYTHING happens with ethanol, in terms of a pause, then corn will crumble pretty fast. I think corn would fall back to the 400 to 450 area at best, and potentially a lot further. Corn was the low 400s to start this year, so going back there, or more, is pretty easy if there is even a hint that ethanol production is going to slow.

Of course, if the current plan ploughs through then that's another story, but I really can't see "us" being that stupid. Never mind, I guess its possible, ok, you're right!

OK, so if you have a mind to short corn, I would use $650 as a very loose stop, which is why you can't leverage it too much, and manage it as/if it goes your way. I assume most people here aren't taking this trade, but I am throwing it out there. I think near term corn should see $550 area minimum to the downside, but keep in mind that like oil and other commodities these things are all over the place and they get squeezed all the time. Corn could open limit up one day, or two or three if the news goes against you and you could get CRUSHED. So, keep that in mind.

Anyhow, that's it for tonight, I'm on a roll as far as the ridiculousness of some things in our society. This is one of them thats a real thorn in the side because it has to do with feeding people who don't have the means to support themselves, and greed in taking advantage of them. It's easy for most of us to not "connect" with our fellows when we don't see them around us. It's kinda like a video game, it dehumanizes the people we see on TV starving, it makes it hard to relate. It's quite sad. I like to take a moment or two a day and throw some pleasant thoughts and well wishes out there for those that struggle. We are very lucky in this country, most of us, and certainly most anyone who is reading this now. We don't have to worry, knock on wood, about these types of things. I don't want to get all hokey, but I do think things like Karma make sense. What goes around usually does, in my experience, come around. We often make decisions without really looking at the impact on the world around us. Think about it, and have a good night!

Happy Trading on Tuesday!


Michael "Waxie" Parness

Thursday, May 01, 2008

Chugga Chugga Chugga Chugga - Choo Choo!

And the beat goes on! Bad economic news, market keeps chugging higher!

As I stated yesterday I thought we would go up today, probably tomorrow. Next week will be the litmus test. I think we get a pullback more than likely next week. So, enjoy this while it lasts. We sure are!

Today we had POT for about $10 from mid-day! Rocking! We tried to short GOOG late and got hammered a bit, but thats why you use stops! A $10 winner outweighs a $3 loser!

Friday if we are up throughout the day watch for a late day profit taking selloff into the close. Friday's been pretty consistent in terms of reversing the day or week late day. Traders like to square up. Right now the bias is clearly up. The market isn't rationale, in fact its downright insane sometimes, this being one of those times. But hey, why fight it? They seem intent on pushing GOOG to $600s, AAPL to $200s, RIMM (we own it!) to $140s maybe.

I'll tell ya when I'll be truly impressed with this move, if we go up and hold next week. I said we should see High of the Year and it looks like we want to try that mark. That's about 200ish points above. S & P is fast approaching the 1450 - 1460 level where I think it'll be very safe to start shorting again. The market ALWAYS overshoots to the upside, and always underestimates the downside action. That's the nature of the beast and I don't expect that to stop now. What inevitably happens with this kind of move is that people at some point realize that things aren't all rosey and then they look around and realize they are standing on a ledge and they have no support below, and its like "WHOOPS, bye byeeeeeee!"

Dollar is rallying, as called. Yes, we are going to have FOREX shortly, so stay tuned, the website is almost ready! When it is we'll send an alert and we'll be ready to rule the forex market, just like we rule the stock and options markets!

Next week's Option Seminar and then June's LIVE week seminar are filling up quickly, please email me - if you are interested. The NJ seminar only has a limited amount of attendees and its MONEY BACK GUARANTEED!* so book it now!

Watch the commodities for a late day bounce if we do tank a bit. Oil looks ready to finally restest $100ish area. As long as the dollar rallies its headed straight there. Will it get there? Probably, but we'll see! In the end, I think investors are getting way ahead of themselves. This is a bubble forming and it's gonna pop again! And, folks, thats what makes a good trading market!

And, this market is indeed VERY good trading, very good indeed!


See ya on the other side,

Michael "Waxie" Parness