STRESS TESTS, and a BIG shout out to the Feds, baby!

First off, I want to give a shout out to Timothy G, Ben B, and the big man himself - B.O.!

ROCK on, my brothers, rock on! I am making a mint, and we are just smokin' cause you rigged the markets! SWEET!

I sincerely hope we get the DOW to 25,000 cause that'll be awesome!

Now, some of you will say that I am being sarcastic, and to an extent that's true. I mean, as a citizen I am appalled by what's going on. It's a total joke. I love how every economist worth a dime says that the banking system is busted out, but we ran "stress tests" and we need less then $60 BIL to fix things! Awesome! The idea behind these stupid tests was/is that they will instill confidence and thus attract private investors to help them raise enough capital to "pass" these tests and continue to stay non-nationalized. The problem is, I really don't think anyone who is operating on their own, without government manipulation, would possibly look at these tests and take them seriously.

I had an attorney who once told me that there are things she can't say to a judge because they wouldn't pass the "laugh" test/meter. Citibank is apparently low man on the totem pole, they only need $5 BILLION. Seriously, that's so far out of touch with reality, even a numbskull like me reading a balance sheet can see that they have a gazillion (roughly a trillion it appears) of bad debt on their books that at some point has to be dealt with. So, the government is saying that with $5 BIL, if people started to pull their savings and accounts out in droves that C would be solvent? Be real, that definately does NOT pass the laugh test! That's ridiculous beyond belief! Hehe. How can they even say that with a straight face.

I will say that if that is the case, then C at under $4 is quite possibly the best stock BUY I have ever seen in all my years doing this. If I believed that I would buy as many shares as I possibly could and become an investor. C would be worth AT LEAST 25 to $35 a share. AT LEAST, if that were the case. C might trade a lot higher on this news, it'll be interesting to see. I'm torn here, as a semi-smart guy I am just sickened by this whole thing, as a trader I am very happy the govt did what they did, it just created another bubble that we can trade both up, and then back down, or partly down, and then up and then down again.

As a trader I can't fight this move, but I will stay on watch for a very near term top here. I've said it before, you need to ride these kinds of trendy moves, you can't try to pick tops any more then you can try to pick bottoms and catch falling knives.

We have a very big "buy the rumor, sell the news" trend here with results of these absurd tests be to released after the close Thurday/today. We've run into the news, as I said we would, so typically it would be an automatic to just short the actual news, and I may do so VERY VERY SMALL. Having said that, I am most likely to cash out my longs and be cash rich and then see what the market wants to do here and into next week. Thing is, even if these tests were really worth something, many of these banks are still way overbought. WFC was in the $40s at its PEAK, its now nearing $30s. Does ANYONE really feel that WFC is worth and should be trading near its HIGHS? Should it be trading as though nothing was or is wrong? I think anyone buying these things here is just asking for a smack down, whether it happens right away, or whether it takes a few months. It's just not possible that this is the end of the banking crisis and we have the all clear to invest signal. So, again, while I am not ready to just start shorting, I am ready to go to cash mostly and perhaps start legging into a couple of short positions in financials post stress test results. Best setup for that would be if we run again tomorrow into the close, and then get good stress test results and then we gap up big on Friday. That would be a good entry to the short side for sure for at least a poke/trade with TIGHT STOPS in case they decide to just squeeze us into infinity for the time being.

I've been swamped with emails asking when we can buy FAZ and SRS. Listen, again, folks, I've said it all along, you can not pick tops! There is only one TOP to a move like this, I think its upcoming here maybe as soon as tomorrow on a sell the news, but while there are only one top, there are usually many moves up til that point. Trying to fight the tape is a good way to kill your account. Going WITH the trend usually ends up paying off! DOn't be in such a rush to lose your money!

You want to TRY to catch a top? FAZ under $5 for a swing SMALL would be one way to try, there are a lot of reasons why this MIGHT be a short/near term top. If you use tight stops you won't have to worry about where to try to catch the top or go long FAZ and SRS. RISK/REWARD is all you should worry about, for those of you who emailed me and told me you were going long FAZ at $25, then $20, then $15, then $10 and now $5, you will be right soon, but you've been wrong all along and gotten crushed. Go WITH the market! Not against it!

RULE!

Waxie