Friday, October 03, 2008

Chicken Little may be right...

THE SKY IS FALLING, THE SKY IS FALLING!

Well, ok, maybe not...yet. But, as I stated and have pounded the table with you AGAIN AND AGAIN AND AGAIN for MONTH AFTER MONTH AFTER MONTH, this market is headed LOWER! You can not invest in this market, it is financial SUICIDE in my opinion!

I want to make one point which as you know has annoyed me to no end lately, we keep hearing people TWIST facts into pretzels and the spit them out as reality! As I've said, the IDIOTIC bill that they passed today had NOTHING to do with the market going up or down! NOTHING, ZILTCH, NADA, NUNCA, ZIPPO! It was insulting to our intelligence to ram that down our throats as a fear mongering way to try to sway people to vote for it! The stock market is going MUCH MUCH lower, it doesn't matter what bill they pass unless they pass one where the government really decides to nationalize the ENTIRE market! That's what they should do, just pay 3 X's the share price of each stock that it'll go up! Otherwise it's NONSENSE! This was the biggest CON EVER! In the history of this country there has never been such an out and out CON JOB! It's appalling. So, ok, since even congress was saying "see, if we vote no the market will go down!" and since they passed this LUDICROUS bill, then when do they come out and say "oh, gee, we passed it and the market is at MULTI YEAR LOWS anyway! So, they passed it and the market went DOWN! Frankly, its absolutely stuptifying to me that we elect people who are this ridiculously ridiculous! This bill does NOTHING for main street - NOTHING. They keep billing it as such, but its a LIE. A complete and utter LIE! Period, end of story. It doesn't create any jobs, it doesn't create a SINGLE job! Not one, unless you count some rich dudes who use this to make themselves even richer. It's sickening, truly sickening. OK, so I've railed enough, right? WRONG! Those of you who know me for years know I speak my mind, I can't help it, but until this bill I've refrained from really tearing into anyone or anything. I'm opinionated but I am here to help you guys with the market and such, not to tear into anyone. But this impacts us ALL and we're ALL in this together. You may or may not agree with my arguements but the facts speak for themselves. The notion that this was going to solve the problems that the very people who proposed this DUMB bill helped create was and is and remains patently absurd. Now, you know my obligatory thought - I HOPE I'M WRONG! I really do. I do not want to be right about this stuff, please please, let the market go up 2500 pts from here! Let this bill work and free up the credit markets! The problem is, I think thats hoping against reality and I don't get paid a lot of money to HOPE. I get paid to deal, or at least try to deal in REALITY! I suggest you all do as well. In my opinion, the only thing that's REALLY happening (the rest is HOPE) is that the people who created these issues, these monster problems are being BAILED OUT! That's it,folks. That's reality. Mark to market, buying WORTHLESS distressed assets, and trust me, they are WORTHLESS, what and whom does it help? You? Me? Our families? Nope, not at all. This notion that these assets have much if ANY value is absurd. Did you see Bill Gross today on CNBC? He spun a pretty different tune today about these assets. Up til now the party line has been that the government doing this was going to create MORE value for them. That's HOGWASH. It's nonsense, and now these people are saying it, now that this IDIOTIC socialistic and downright ATROCIOUS bill has passed you'll see people say "oh, well, I never said it would work! BUT, we had to do something!"
This is a travesty and it makes me sick. I am sure the forefathers of our country are rolling over in their graves, watching the belief systems that we were founded on and that they fought for, are being decimated by rash judgement, and an out and out SCAMMING of the American people. Now, look, the market will bounce, and when it does it'll bounce heavily and then they will all say "we've bottomed" and I will continue to tell you all that it hasn't, that we are headed MUCH MUCH lower and that if you wish to surive this market and this economic disaster, you must be cash rich and pick your spots. This market is a VERY good trading market, look at today, we went up 300 and then we sold the news, which I said we would. A nearly 500 point range is a GREAT trading market. A GREAT trading market and an obscenely POOR investing market. Tiny and I talked tonight about it, this market is trading like its about to fall off a cliff folks. I've never read or seen a market like this and it is, most assuredly, teetering on the edge. If it falls, baby, look out below. This bill is a travesty for democracy and the abuse that was heaped upon us to get it passed is, at least in my lifetime, unprecedented. And, the pom poms that were out leading up to this, what do they say now? Now that the market didn't just rally, now that we are sitting at multi-year lows? Now that we watched the AG sector get completely destroyed. Now what? Watch the solars, they are next to go, and the financials that have been so strong, they sold off on the news. Again, its unlikely we won't get a HUGE rally soon, we're vastly oversold, but as I've been saying, the market remains VASTLY VASTLY VASTLY overvalued and thus any rally should and must be sold into. We will trade it long and swing it short cause baby, thats the market and if you want to make money in the market you gotta go with the flow dudes and dudesses, go with the flow! Have a great weekend, let's smoke 'em next week! I hope you aren't investing, Monday we're either gonna get a bounce or you might have a very VERY big headache. We shall see what we shall see, but this time Chicken Little just might be right...it's funny (one last thing), every pundit walks onto TV and says that the market is a buy unless the sky is falling, right? But they all said the sky was GOING to fall if this bill wasn't passed. Think about it. I hope the sky doesn't fall, but if it does then the best thing you can do is NOT be a sitting duck. Investing in this market makes you a sitting duck in my humble opinion. I hope I don't offend too many, I am here to help you guys and gals, that's my intention. It's sad to me as an American, to watch us get hoodwinked, which is what I believe happened here. Yes, something needed to be done - create REAL jobs and growth organically - but not to bail out the cancerous system that helped create it. AND< irony is, it's not going to work, its going to make it worse in my opinion. Happy New Year to all and to all a good night! Relax, next week is gonna be a doozy and I intend to ROCK IT! RULE! BTW, has anyone seen the Beer Guy? :) WAXIEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

*For those of you who missed yesterday's TOP TEN SHORTS class and LIST, you can still get in, there's still time! You can sign up for it and get the archived WHOLE CLASS! Email me @ - waxie@trendfund.com and I'll forward you to Sally who will get you signed up. The class archived is the same price as regular, but seriously its time for ALL of you to get it! Don't get caught in this mess, learn from our success! RULE!

13 comments:

Jeanne Mancuso said...

Waxie,

Don't hold back. Why don't you tell us how you really feel. :)
I do hope you're wrong on this one.

Jeanne

comcity said...

Just love your Blog and you are correct on just about everything. I am a trend fund trader and using your calls I have made money in this crazy market. I do have a point I would like to make. In the Sept 18th blog you said we are headed for Deflation. I believe deflation is defined as a decrease in prices and a decrease in the available quantity of money. I don't see either one of these being true in our economy at this time. All I see happening is the Fed printing money and lowering interest rates therefore increasing the money supply which is to fight Deflation. I believe we are headed towards inflation or even super inflation where the fiat currency we have will be worthless and cash is not king. Right now I am mostly in cash as I believe thats the right place to be in this cycle, but will be moving some to gold and silver as a hedge. I would like your thoughts on deflation and inflation and if you think inflation is on the way.

Thanks again for views they are very valuable to me.

mdwills said...

Waxie,


The market made a 500 point swing yesterday and there was only 1 gap suggestion (spy lost money) and there were no other suggestions.
What gives? Do you not give advice when there is extreme movement and chances of large profits?

--Martin--

TheBeerGuy! said...

Hey Waxman...I see you mentioned me tonight. Anyhow, I admit you were VERY right on the overall market direction. Good Job. In fact, I made some nice money on AAPL Puts from $140 and again following the RIMM blow up.

The solars also suck, as you say. Had a short in CSIQ at $30 and have since covered. These are all very oversold now, along with a ton of other things so I probably wouldn't get short here...I'd wait for a move higher. Maybe if FSLR gets back near $200 sell it from there. Looking at the daily chart, there's some support for FSLR at current levels from early 2008 so it quite possible it holds for a while and spikes back near $200 during our next bear rally. On the next leg down though, when it breaches the $165 area, next logical support zone is $100.

I also think a huge oversold rally will occur...could be Monday and Tuesday of this week since EVERY headline is predicting doom and everyone is expecting a crash. These telegraphed crashes and rallies NEVER occur. Such as the expected rally following the bill passing.

DOW 5,000? I think that's stretching it though. You still sticking with that number?

Good Luck!

Jeanne Mancuso said...

Waxie,

One more thing and then I'll shut up...feel free to not publish either post. I was thinking about what you said and it seemed very closed and one sided. It's difficult for me to fathom how two really smart guys like you and Cramer can have such opposing view points.

How can you think that all those mortgages are worthless? Don't you think this recovery plan is at least buying us some time for the real estate market to recover? It may just be the best investment the government has made in a while. (That may be pressing it a bit but people need a place to live and the population isn't decreasing.)

You've been saying the financials were in crisis for some time now, and now that the government says it they're perpetuating a 'con'. Banks are failing left and right...you were right!

Ok, I'll shut up...

Good night.

bob in jersey said...

Waxie,
Love your blog and I respect your opion. So far you have been spot on. I am a new reader and maybe I missed it, but could you explain to me why the bailout plan is so bad. I watch alot of CNBC and they explain it as freeing up the banks to lend to each other by taking all the bad loans off the books. This makes it easier for banks trust each other again and begin to lend to each other. Now on the surface that makes sense to me, since part of the problem is that there is no available capital to fund loans which can bring business to a halt. What am I missing here. I'm trying to understand the big picture and after reading your blog I feel I am missing it. Also how did you come up with Dow 5000. What levels do you expect with the Nas and S&P. Thanks for your insight.
Bob in Jersey

Waxie said...

OK, first off, I don't think DOW 5000, so let's get that straight, I think DOW 4500. I think Nasdaq 500 to 700. Look, the market is trading as though a cataclysmic event is going to happen. Maybe the market is wrong, but I've learned not to buck that. For the time being I would ONLY swing shorts/puts and I would TRADE calls/longs intraday and for VERY short periods. It would take an act of G-d for me to actually swing a stock long other than a small cap. I'm sorry, and yeah, of course we'll bounce, nothing goes in a straight line, but as I write this the futures are down almost 200 pts. If you invest you are a sucker in this market, point blank. As far as inflation, I don't see it, I see DEflation. Negative growth and declining prices due to declining demand. DEflation is WORSE than hyper inflation, its the worst possible scenario. As far as the "plan". Why do I think it won't work? Cause you can't bring a glass of water to a forest fire and expect to put it out. 'nuff said, good luck this week, expect the unexpected!

Waxie

Ming said...

Waxie,

Thanks so much for your great service. The Dow is close to 10000 and SP500 is less than 100 points away to 1000. Do you think market will hold these levels and snap back sharply?

Ming

Erik28 said...

Jim Cramer is probably a very smart man.


However, being on cable tv, and the show being tailored to the "common investor" NOT a trader...he must be bulish. He has to put a bullish spin on everything, b/c that's what the majority of his viewers i guess want to hear. (instead the the STRAIGHT truth).

He has stated that "options" are "shorting" are professional trading tools and above the level of what he thinks is wise investing for his viewers.

He probably very well knows whats going on. But to advice people to ONLY go long, and discourage options and shorting...well that explains why his charitble trust is DOWN big time for the yr, and waxies picks are through the ROOF!

I watch his show, but not for the picks obviously. I watch it (imo) b/c i also like to know what the dumb money is doing, seriously. Once the "late the the party guys" get on board, you know its just about time to CHANGE direction.

Ex: RIMM

In AUG, he called it "August, the RIMM month!!!" and yes the stock went from a then 118 to about 130 post his "pumping". Well after seeing RIMM on Waxies short list, i knew his pump was a GREAT entry, so i bought my puts about 3-4 days AFTER he pumped it, when it was 125ish :o)

But what TICKS me off about the guy, is just a week ago. When someone called during the lighting rough and asked about rimm he says "The earnings report was bad, i would not buy, but i think u can hold from here, i shoulda been saying SELL SELL SELL when it was 130"

well he was saying BUY BUY BUY at 118!!!!!! Then it crashes and says ON THE AIR "I shoulda been saying sell sell sell" Heck what about Joe 6 Pack who bought b/c they TRUSTED HIM?

He's very slow, on uptaking market sentiment, and he's OVERLY bullish (way to much so) on the market, but that is proably part of his required job description, as Joe 6 pack does not believe in shorting or options (although he should).

Jim Cramer, to me (IMO) is a terrible CONTRARION leading indicator.

When a stock looks over-inflated, and THEN he pumps it...you can pretty much COUNT on him squeezing another 5-10% out of it, then it falls like a bag of ROCKS!

FLWT - he pumped at like 70
RIMM - he pumpoed at 118
CLNE - he pumped at 15

when he does an obvious pump, give it a few days, and buy puts. works almost every time!!!!!!!!!!!! :o)

Nick said...

It is the cliff of worry instead of the wall of worry.

Nick

Erik78 said...

(typo)

He IS a great leading CONTRARION indicator.

When he screams buy, and it looks like its already ran ahead of itself==IT HAS! (it's a gimme SHORT)

Even if its just for the guaranteed overbought temporary status from his "pumping", its as gimme none the less.

SNDK
POT
AUY
FWLT
RIMM
AAPL
CLNE


the list goes on and on and on and on..those are just the past (in order) that i recall.

(imo) you must scew and know when u listen to him that he is DANGEROUSLY and RECKLESSLY bullish, and when you use this as an adjunct you can (imo) get good sentiments of things....by seeing through him.

sanjay said...

Jim cramer is not as dumb as you would think , see the difference is in a regular bull market , if you are trading with millions of dollars [like he does], he averages them down[usually good quality stocks]. so its a very good way to make money but for every day guy with his 20 or 50 thousand account ..it won't work as well.

Rich said...

Regarding Cramer...

There was a video on the net some time ago where he was on a show explaining how he and his fund buddies run his pump n dump scheme by using the media to put out positive info. I tried to find the video and couldn't, but here's an article about it: http://www.nypost.com/seven/03212007/business/cramers_big_mouth_business_roddy_boyd.htm

Yeah, the guy knows a lot about the system and how it works, but wouldn't you have to in order to be great at manipulating it?

Sorry Tiny, but I have no respect for the "man".