Unfortunately...

I was right. I trust most of you guys and gals heeded what I've been preaching for a long time here. The stock market is NOT going up in any meaningful manner, other than short covering rallies, for a LONG LONG LONG LONG time. Figure 2012 as a good target. The stock market is going to be at least 4000 points lower, potentially more. The entire financial system as we know it is going to be caput, it already is but no one wants to admit it.

GS reports in the am, I say GS sees $50 or less by years end now. I think you can kiss the ENTIRE sector goodbye. BSC, LEH, MER (what crack was BOA smoking?) - all DONE. MS, GS, LM and others to follow. Like I've also said, I WISH (trust me) I was wrong about this. That would have been wonderful. I would much rather have everyone say I SUCK! Then have the market just totally destroyed.

I won't gloat, it's not a happy day. We get paid good money to make market predictions and suggestions. I would much rather have us move higher and give you longs that work, then have us completely tanked and do it right that way. Unfortunately, this is going to get so much more worse than anyone can imagine. This is the REAL Y2k, folks. This is the financial equivalent of that, but its not a fantasy or fear, its real and it can't be stopped. The Fed can cut rates to zero and pump 10 TRILLION into the markets, it won't matter. Think about this, when most of the financial district in NYC is a ghost town, what happens to real estate in NYC? What happens to the rest of the country?

The senate is trying to pass another $50 BIL "stimulus" package to send people $500 checks! Wonderful. As I've said, the only thing that is going to happen is that WE, the tax payers will be on the hook for up to TRILLIONS, so giving back $50 BIL is similar to like taxpayers paying themselves! And, what's scary is that both candidates are basically for the stimulus package because they want to look like "heros". Since all these bailouts and failures get kicked back to the taxpayer, then how could it matter to give you your own money!

It's sickening. And, what's really sickening is that it could have been prevented, or at least dealt with to stem is sooner and have shorter lasting effects. I'm a nobody, I have no training in economics and I am SO sure I had this nailed on what to do. And, if thats the case then clearly the powers that be just aren't listening to people who do have some real ideas outside of throwing more bad money after bad money!

When the dust settles the financial landscape is going to be so vastly different. There is simply no way that we can come out of this ok, without huge scars.

The Fed will cut at least .25 and maybe .50 Tuesday, it won't mean anything unfortunately, and any rally is going to be just a tease. Russell still has 50% to go to be priced correctly. And, we're probably headed toward some runs on some banks shortly. It's going to get ugly and its going to get much more ugly than people want to see.

I got asked today by many friends where to put money. I put some money into treasuries. http://www.treasurydirect.gov/ is where you can, I think, purchase treasuries directly. If treasuries go under then we'll be using sea shells to pay for things again.

C and WB looks next. MS and GS will join them. Our puts across the board are making clients a TON of money. Look, folks, if you haven't signed up for OPTIONS TRADER, you need to do so, if you are reading this then you have an interest in making money. While there are no guarantees all you have to do is look at the 3 SHORT lists I've given, the Bear class we did only last week, and all the while we are catching much of the move.

Watch AFL and other insurers, that sector could get a huge haircut next as well. I like AFL short.

OK, so now that I've beat you all over the head with gloom and doom, let's look at some stuff here. It's Tuesday and as you know we often get Turnaround Tuesday! We've also "only" 900 points away from REALLY big support at 10,000, which I think we break down to SOON. Actually, futures are down 150ish as I write this, so we're only 800 points away from 10,000 and lower!

ANYONE who is buying financials here is an idiot. I'll state that as a fact. It's amazing that anyone would be foolish enough to buy them for anything other than a short covering rally.

Watch us tomorrow, it is so key what we do Tuesday post GS earnings. I suspect GS will see sub $125 tomorrow or this week, but I guess its possible they will blow out and go higher. Today on CNBC Merridith Whitney, who's been dead on through all this said that she feels C and WB are in a world of trouble. IF C and WB "fail" and have to be bailed out, SKF should be $250 minimum. I am shocked we weren't down 1000 Monday, I really am. Nikkei is down 600 points as I write this. The markets are getting CRACKED throughout the world.

OK, there ya have it, I've been clear, I remain BEARISH even when we bounce. BUT, if we get a nice gap down, I'll still be looking for entries to the long side for a bounce more than likely! THat's cause I'm a TRADER and you should be one as well!

WAXIE