Wednesday, September 17, 2008

Bottom feeders...

Well, to say we nailed this is potentially the biggest understatement ever. Option Trader is insane at this point and our SHORT LISTS are beyond insane, we covered 1/2 those positions (at least) today. GS hit our 2nd target of $100. FNM is almost at our ZERO target. C was under $13, the list goes on and on and on. So much for the BOTTOM! Every day they come out looking for the bottom! Sorry to tell ya, the bottom is now UNDER 5000 on the DOW and UNDER 1000 on the Nasdaq. In between that we'll get a ton of "bottoms" where people say this is a great place to invest, get in now! All that will do is create bigger and bigger losses. That's what happens in Bear markets, the sheeple that listen to booyahhead and others tell us that shorts are the reason we are going down all rush to get in on any sign of a bounce/short covering and then are left for dead. What happened to Booyahheads call that we had hit a bottom in July? Guess not, huh? Unreal. I wish I was wrong, folks, but I'm not. Here's the deal, you know how T.Boone Pickens has that commercial where he says that this is the greatest transfer of wealth in the history of the universe? Well, the US Banking system, and the worlds global economy will have the greatest transfer of wealth into the great abyss that we have ever, or will ever know. Doesn't make any sense to you? Sure it does. Think about this, BSC and Lehman and most of the brokers (and banks) have MINIMUM 20 to 1 leverage. The average investor is leveraged over the money they have in their accounts with margin and such. The average consumer in this country has virtually no savings and is in debt paying anywhere from 5 to 20% interest to credit card companies and the banks. So, what we are witnessing, and why you have to be a complete knucklehead to be a buyer of ANY security here other than for a bounce is that these things are all unwinding and as they unwind and people/businesses come to collect on these leveraged collaterals the money simply isn't and can't be found. It NEVER existed in the first place! So, the idea that you should buy financials here or anywhere is pure unadultered INSANITY. These stocks can not and should not be bought. Not now, not in a year, probably not in 5 years. The pundits keep pointing to history and saying stupid things that aren't true, like "these are the times when you need to be buying, history has proved that out!" Really? What history are they talking about? The history that has never seen whats going on in the market and economy today, or the history that was 2000 to 2003 when the stock market lost nearly 50% of its value on the NYSE and over 80% on the Nasdaq? Which history are they talking about? I just don't get how they let these clowns peddle their wares. Booyahhead has been touting GS and MS for months saying he's buying them. Great, he's only down 50 to 80%. And, oh, yeah, the 4 horsemen! They are rocking! RIMM, AAPL, GOOG, I mean its a joke. And, sick thing is, I am fairly certain that he knows you shouldn't be buying here for more than a bounce. No one can possibly think RIMM is a good deal at $95, I'm sorry, its a $25 stock long term, not a $100 stock. AAPL? It's a $25 to $50 stock as well. GOOG? You all know I think GOOG is a $150 stock in the next 12 to 18 months. So, don't listen to the insanity, you need to be looking here for bounces that are TRADEABLE, and then look for places to get SHORT, cause that's where the real money will be made over the next few YEARS. Look at some of the retail leasing companies now for shorts, like VNO and it's competitors. Even now, after hours, there are tons of rumors that are popping stocks like WB and C and GOOG. WB is up nearly 10% after hours on a rumor that they may merge with MS! That would be wonderful, all it would mean is that they both go under. WB is WORTHLESS, its on my WAXIE Bank DEATH list! So is C, which had a rumor they might buy Washington Mutual! Yes, that would be great, a company that is busted out buying another busted out company! Yet the mere thought that something might happen and investors scramble to buy, not wanting to miss the inevitable bounce! Thursday will be interesting. Bulls will try to make a stand, if we gap up on no or BS news I would look to fade it heavily. We could push down to test 10,500. That will be real key area, if we can hold that area we should get a decent bounce back to the 11,000 area potentially. If we can't hold that then next stop is 10,250 and then 9000s! The most overvalued index is still the Nasdaq and the Russell. The Russell actually is still 5+% over the March lows which were in the 640s. I think it should retest and break that area shortly, so stay tuned. I don't think we can get anything meaningful for a while. Having said that, news drives us here. As I've stated and stated in our BEAR HUNTING class last week (nice timing!) a market that is driven by news is a very weak market. News eventually stops coming and we are still 4000+ points overvalued. Now, having said all that, I would NOT be pressing to the downside here. Let's see what shakes out, when we do get a bounce, and it should happen tomorrow or Friday, particularly if we get that 10,500 test here, it'll probably be a HUGE one. Shorts will cover quickly and investors will rush in to try not to miss the "bottom"! So, last thing you want to do is get stubborn here. The easy money to the short side NOW is done, lets see what shakes out here and RULE! Oh, one last thing, we are doing another SHORT LIST/CLASS in the next two weeks. If you are interested please email me at - waxie@trendfund.com pricing will be same as the last list(s) and it'll be my new Top 10 Shorts that I believe will drop 50+% in the next 12 to 18 months, and will also have at least 5 Options plays relating to the Top 10, plus maybe 1 to 3 bonus plays with options! See ya there! WAXIE

8 comments:

retracementmaster said...

Waxie, your blog is one of the best out there, I am surprised only a few people is posting in the comments section.

Maybe because you already said everything that had to be said leaving all of us speechless!

Just wanted to say thanks for your insights, you are one of the few that make great sense in the middle of the disinformation and cheating whoofed by the medias.

Scott said...

Always appreciate your comments Waxie. Played TWM and SKF today very well, and then GS when you called it. Great day for TRADERS.

vs said...

Love your blog. Great stuff. Keep it real.

vs said...

BTW, I am writing to CNBC to have them give you your own show on the channel. Or do you want Bloomberg?Maybe Bloomberg suits your style a bit more :)

Waxie said...

Thanks for the kudos, all I can do is give you my honest opinions. I think having an unbiased opinion is something that people need in this market, but most on TV are either looking with Rose colored glasses, or not being forthright. Both are unfortunate.

Keep it coming and sure, write to both CNBC and Bloomberg, I'm game!

Rich said...

Great blog Waxie,

When I was a little kid I remember a day when another kid wanted to play a game with me and some friends. It was fun for a little while, but then the kid that originated the game started losing, and so he began to change the rules in order to "remedy" that. Eventually everyone got fed up and left him by himself.

Today's action by the FSA reminded me of that childhood memory...for some reason.

Rich said...

BTW...

Any sense on a good re-entry point for SKF?

beach2788 said...

Waxie, this is incredible, and what really bothers me was the timing, seems like manipulation around Options Expiration Day.

Timed "leaking" of information by CNBC.
A proposed govt RTC, the ultimate bailout of many CEOs bad decisions.