Last day of the quarter

Its the last day of the financial quarter and I'm not to keen on getting in front of the bulls. Kirk at the kirk report claims that end of the quarter window dressing is less common the last couple of years. Volume still appears really light and the russell is the only index above the fifty day moving average.

Jason at sentiment trader is still bullish for the next couple of months and there is a big edge going into the beginning of april. Nevertheless, wall street likes the fall because the chase begins in order to get the end of the year bonus.

The curve continues to steepen. When are the big guys going to get out? Oh wait. Governments don't care about money.

Light volume dominates

I don't know why the market gapped up this morning. Asia and world markets were exactly booming overnight. Whats up with Russia? Out of control situation if you ask me. Its only a matter of time before 20 percent is lost in one day.

According to sentiment trader we are getting closer to oversold. If we get a hard end of the day down. I'm probably looking to buy next week for a trade. More curve steepening today

EOD

After a pretty good shove higher around midday the markets gave most of there gains back. As I alluded in the pervious post the curve continues to steepen which is what I think the fed wants. They know that rates where to low for too long in 2003 and were raised at much slower pace than necessary. Thus, the out of control environment we got last year. More leverage of companies and bad mortgages. I am encouraged that the fed is being vigilant on inflation and tougher on the financial community. There are tons of HFs who are amp'd up to take advantage and get ahead of the next easing cycle which only put us back where were a couple of months ago. Perhaps a minsky moment lies ahead.

http://www.iimagazine.com/article.aspx?articleID=1234217

Sell Off Then Rebound

Bernake testified before congress and downplayed the role of the subprime market. Go figure. The market continues to hang in even though the news is downright awful. The housing situation is awful and iran capturing british soldiers isnt helping matters.

The only thing that I can think of holding up the market is the fact that everyone is already short? Maybe? I can't recall a time in the last year where things are stacking up so negatively. Perhaps the weak dollar is holding up commodities, but the curve is steepening.

IPSU has traded up. I'm still a believer in soft ags. They aren't over owned and haven't really gained traction in at least a decade.

End of the day!

Sucky markets. A general malaise seems to be taking over in the markets. Tomorrow is the end of the quarter so I wouldnt rule out a jam attempt. I'm short some appl which was a mistake beacause its been a eoq mark up canidate. The longer this goes on the more convinced I am becoming that we are seeing a a major long term top and the potential for a massive repricing of risk throughout the globe. Sub prime is not the only bubble outthere. Cheap money is responsible for leverage and risk taking in almost all asset classes across the globe.

Bulls continue to point out that when sentiment reaches extremes like last month that it results in very high probability that the sp will be higher 3 months later. I continue to respect that edge, but I it will be proved in correct over the next montht. The data is becoming too overwhelming to ignore and there are surely financial casualities that have yet to be revealed.

The curve has steepened.

I see a potential nasty situation developing in financial casino land. The curve has steepened since the last fed meeting and that can mean only one thing. The fed has no intention to ease until there is signifcant pain being felt in the financial system and the real economy. We are nowhere near that level yet. Default rates are still several standard deviations away from normal. Things could change in six months. More simply the sp is going to be at 1100 before rates decreases can be a serious thought.

I'm surprised that no one has noticed a steepening curve and a declining dollar. That is and should be a scary scenario.

What did I do wrong today?

The market sold off hard and I was up a quick 10 grand. I violated my new years resolution attempt to be more careful and trade less. Sp's sold off fast, but the volume was really light. There doesn't seem to be any conviction by the bears or the bulls, nevertheless the put buyers this morning got burned and the volatility was sucked out of the market going into the afternoon. I suspect its going to take precise timing in order to make put purchases worth while. The crowd is going to be lulled into complaceny again or become more careful throwing on hedges.

I'm short appl because I think it is a prime candidate for a blowup. Everyone owns it. Everyone loves it. Price targets are around 130! The market cap would be higher than HP and the economy looks pretty suspect.

Trade less!!!!!!!!!!!!!!!!!!!!