The RO Report, "Melt Up" Edition

Everyone is suddenly talking about changing the "marked-to-market" accounting standards. This is upsetting because it's really taking away from the whole Jon Stewart/Jim Cramer war.

11pm tonight! Comedy Central! Don't miss it!!!!! But hey, if you do, no big deal. I'll post the interview with my Friday links tomorrow.

Anyway... so what does this potential change mean? Art Cashin used a great analogy this morning on CNBC to help us idiots understand. I'll paraphrase...

He said, imagine if the dude who lives down the block from you has all sorts of financial trouble and is desperate to sell his house. He's a real shithead. The type of dude who doesn't clean up after his dog. Anyway, because he's desperate, he is forced to sell his house/trailer below market value. In short, the dude gets fucked. But you're cool... you pay your mortgage each month and have a 3467 credit score. Say you want to sell your house. Should you be forced to value your house at the same value as the fucked up dude?

Basically, changing the marked-to-market accounting standards means that no, you don't have to value your house the same way the fucked dude had to value his.

Why am I writing about this here when all you people want are the numbers? Because it pertains to the market action today. Who the hell wants to be short the market and specifically financial stocks if they're about the change these standards? Apparently nobody.

Welcome to the great short squeeze of 2009!

The RO had a great day. Out of 31 traders, 27 were gross positive or 87%. 14 traders made over $1,000 gross and only 1 trader lost over $1,000 gross. I was #14 of 31, very happy considering I was down for 95% of the trading day. Trader A continues his hot streak.

"Lucky Pierre" - Trader A, $32,949 on 434k shares traded.

2. Trader D, $21,756 on 786k shares traded.
3. Trader Z, $19,738 on 532k shares traded.
4. Trader B, $13,446 on 749k shares traded.
5. Trader C, $9,200 on 588k shares traded.

"Chambermaid" - Trader J, -$1,011 on 116k shares traded.

2. Trader F, -$873 on 149k shares traded.
3. Trader Q, -$272 on 3,200 shares traded.
4. Trader 8, -$122 on 44,200 shares traded.
5. Trader G, $48 on 8,200 shares traded.




Stock Market Trend Analysis 3/12/09 from brian shannon on Vimeo.

Art Cashin On The Daily Show

I hate to admit it, but Jorge was right... this was the better Daily Show clip from last night. Not only because it features Art Cashin (my hero) but also because it pokes fun at CNBC stupidity.

Art Cashin, Trader's Edge, CNBC, October 9, 2008

Here's a link to Art's interview this morning. Needless to say, I agree with him almost 100%.

"We have several tough years ahead of us."

The RO Report, "Chambermaid" Edition

Okay, so we broke the lows from yesterday on silly volume, and by "silly" I mean excessively light. The selling is so orderly that it's very scary. I reiterate what I said yesterday, we're gonna have to visit the sub 8500 level for a real washout to occur... perhaps lower.

Maybe the "Art Cashin scenario" will now be able to play out overnight. I have to say, I've been watching CNBC for 10 years (sigh) and every time we get to a market bottom, Art is always begging for capitulation. For real blood. The man wants pain.

As of yet, I don't think he's ever been satisfied. I wouldn't be surprised if Art visits the local BSDM club now and then... not that there's anything wrong with that. As you all know, Art Cashin is the only person worth listening to on CNBC.

So now we've closed on the low, we can hope for an overnight "market event" in Asia and Europe, we gap lower on the open, trade down for an hour or two, drop 1000 points, and then HUGE VOLUME comes in and we get a "V" bottom.

From your lips to Mother Market's ears, Art.

Anyway, the Manservants took it to the Bosses today. In fact, the Manservants were so "manservantly" that "Trader D" came up with a new term for the blog... "chambermaid." The "chambermaid" is the low man on the day.

Congrats to "Trader A" for being today's "chambermaid."

Truly, the "chambermaid" is on the bottom.

I'm sure soon we will have a new term for the "main boss" too.

Art Cashin would be impressed with the bloodletting in the RO today. Out of 27 traders, 15 were gross positve, or 55%. While 10 traders finished up $1,000 gross, 9 finished down $1,000 gross and as you'll see shortly, a few finished significantly lower. Happily for me, I was #6 of 27. I've nearly made back all my losses from my last bout of "manservantude."

Since the office as a whole was gross negative, the "manservants are on top.

Chambermaid - Trader A, -$29,361 on 397k shares.
2. Trader B, -$22,034 on 925k shares traded.
3. Trader H, -$19,667 on 14,600 shares traded.
4. Trader Z, -$9,411 on 393k shares traded.
5. Trader J, -$2,529 on 58,600 shares traded.

And the Bosses:

1. Trader C, $11,358 on 414k shares traded.
2. Trader E, $7,924 on 131k shares traded.
3. Trader D, $5,185 on 233k shares traded.
4. Trader L, $4,293 on 96,400 shares traded.
5. Trader K, $1,765 on 23,200 shares traded.

See you tomorrow. Don't forget to watch tonight's debate.

Art Cashin On CNBC, October 6, 2008

Note: Art was wearing a vintage Dow 10,000 hat... below is a paraphrase of his brief comments this morning.

Worried about what's going on in Europe, and it may spiral out of control.

Some concern in the market, did we wait too long?

Maybe we get a good capitulation sell off today, then a little continuation tomorrow morning and then a sharp reversal. That would be one right out of the trader's handbook.

Art Cashin

(paraphrasing what he just said on CNBC)

What's keeping us from totally rolling is the idea that Bernanke said they'd use "every tool in the toolbox."

We come in Monday and if the commercial paper market hasn't loosened, the idea is that the Fed may come in Monday and cut 50bp.

Art Cashin, September 29, 2008

"Never bet on the end of the world, it only happens once. But it may not be a bad idea to find a bomb shelter."

Art Cashin's Comments, September 15th 2008

In short, below is what Art had to say.

"This is unique. This is another fine mess they've gotten us into..."

Watch the bounce, see what kind of shelf life it has, see what kind of volume...

This rally, if it turns and it's real, should look like a cattle stampede in an old Western movie. They should be chasing price with volume."

Let me tell you in case you're not watching... this is no old Western movie. If it is, all the cowboys are gay.

Anyway, another impassioned post by Denninger to "Wake Up America!" Indeed.

Art Cashin on CNBC

I just caught the tail end of his comments...

Traders aren't just looking at the financial companies now, but they're looking at any company run by a CEO that can even spell "finance." Even GE.

Everybody believes "there must be a LEH deal" this weekend.

Problem with AIG in addition to all the rumors, are all the storms going around. They could have a lot of claims, which will adversely effect earnings.

It's gonna be a weekend to watch, and we're going to see what happens Monday, Tuesday and listen to what the FOMC says.

The Trader's Edge With Art Cashin, June 26, 2008

Here's a brief paraphrase of what Art had to say today.

CNBC: The FED yesterday, GS today... do you see any silver linings?

Art: No. In fact, I'll bet the FED cuts before it raises this year.

CNBC: Wow... really?

Art: Well, I think GS is so convicted that there's gonna be some trouble and the rumor mongers are out again. And not just the in the financial companies but the automobile companies are in such trouble, that there's a rumor going around that one of them may be filing for chapter 11.

CNBC: We've heard that rumor too... sounds far fetched, no?

Art: Well, you never say never these days.

CNBC: Art will be guest hosting for 2 hours on Monday.

Art: TV is a vast wasteland.

Art Cashin On CNBC, June 17, 2008

Here's a brief paraphrase of Art's comments with Joe and Carl this morning... As you know from reading this blog, he's one of the only useful CNBC contributors.

CNBC: Art, what's most intriguing to you today?

Art: Well, first of all, the possible rate hike died at 8:30 Friday morning when the unemployment numbers came out. They can't raise rates with rising unemployment. If they did, they'd probably face riots.

Also, crude oil had a frustrated breakout attempt yesterday. I'm watching all the hearings about trading in crude and speculators.

CNBC: Art, why is "speculator" such a dirty word right now?

Art: I don't know... I remember Bernard Baruchs comment about speculators looking ahead. They try to figure out what's on page 13 today, that will be on page one tomorrow.

CNBC: Headline inflation came in at the fastest pace in 6 months. What can the Fed do?

Art: The Fed is trapped for now. They want to jawbone it... inflation is going up all over the world. The romance countries are saying, our economies aren't doing that well, put that gun (raising rates) back in your pocket.

For now, central banks around the world are dealing with rising inflation and weak economies.

Art Cashin, May 23, 2008. CNBC.

Again, Art Cashin is one of the only regulars on CNBC worth listening to. Today, Erin and Mark asked him about the price of oil.

Art Cashin: Well, China and India keep subsidizing things. China just had a huge earthquake and they're not going to stop subsiding right now and risk a populist problem... So, oil demand is going to stay.

Erin: People look a the last few years, and oil has tripled, but stocks have also done well. What do you make of that?

Art Cashin: Well, it's like that old story. You put a frog in a cold part of oil and start heating it up. By the time the frog learns it's hot it's too late. People have been accommodating to the high price of oil so far, but it's getting hotter."

Art Cashin's Comments, February 26, 2008

Only caught the tail end...

Art: ...the big story of '08 could be the price and scarcity of food.

JC: The market keeps going up... anything positive to that?

Art: We've had very thin markets and then yesterday S&P affirms AAA ratings on ABK which may be the most remarkable thing since Lazarus. I mean, ABK was just short of selling body parts to make ends meet and S&P affirms... I think we're at the upper end of the range here, but I think that range will hold.

Art Cashin's Comments, Feb. 25th 2008

Art, what's going to break us out of this range?

Firm up that Ambak deal quick or the rumor mongers will be out saying that it's going to fall through. Also, we have lots of data this week and Bernanke will be speaking in front of Congress.
If our elected officials will stop hamming for the camera, perhaps they can take him through the FOMC minutes.

Comments on the Visa IPO? Is it a good sign?

The interesting thing is that it's going to eat up a lot of sideline cash, and that's going to lock things up. Also, keep an eye on Greenspan's comments this morning... he's talking about zero growth in the US.

Art Cashin's Comments

I only caught the end, but here's a brief paraphrase:

On testing the lows of January:

I believe a retest of the lows is still in order. It would be better for the market as it would give people more courage to really buy in here.

On Buffet buying the muni bond portfolio of MBIA:

It's reminiscent of JP Morgan during the Panic of 1907. If it works out, it's a great deal for him.

Art Cashin's Comments, February 1st, 2008

On the Microsoft Yahoo deal

I think the MSFT deal is a defensive move, only a counter attack against GOOG.

On the futures giveback after th jobs data

By the end of the day, Goldilocks will throw down a few Prozacs and have a few cosmopolitans as well.

Has anything altered your short-term view?

No. The underlying technicals are still short-term weak. Though this oversold rally has lasted far longer than I thought it would. I also failed to anticipate that the MBIA conference call, with only written questions, could only provide positive headlines.

Art Cashin's Comments On CNBC. January 30, 2008.

This morning, Joe Kernan and a guest questioned Art on a few topics. Below you'll find the questions and his responses paraphrased.

On the FED action today:

The rate of destruction in the GDP was stunning and it bakes a half point into the cake.

On the bond market:

They're overdoing it and they may be setting up for a turn, they're overbought.

Do we test the lows?

I think we have to retest the lows. It takes a few weeks for that to happen, not a day or two. It's a pass/fail type of test.

Are we in a cyclical bear?

Well, Goldilocks is getting a manicure and a complete makeover, but I'm afraid she'll be left standing on the porch when the limo pulls away.

Has the elimination of the plus tick rule increased volatility?

Yes. In the past, shorts were able to weigh on a stock in the same manner that piling rocks on a guys chest will eventually cause him to stop breathing. Now, they sell 'em right down and then they spike right back up, so the elimination of that rule does add to increased volatility.

Art Cashin Comments On Possibility Of FED Action

"Bernanke has been criticized so much, maybe wrongfully, but if they do nothing and there's a 300 point sell off, the thunder will be heard forever."

Art Cashin Reacts To Rate Cut

Art Cashin's Comments

Here's a brief paraphrase of Art Cashin's comments this morning on CNBC. I think he's one of the only reliable sources to listen to on CNBC. When the market freaks out, I pay attention to what he says.

On the big stories today, GE, IBM and OPex.

I see today as a three legged stool. GE, IBM, and options expiration. Two key blue chips reported good earnings but I worry about stamina, we'll know by 11 or 11:30 with the option expiration if this rally can hold together.

On the earnings.

GE and IBM are benefitting from the weak dollar. Helps the multinationals.

On the bond insurers.

However, the bond insurers are screwed. There are problems when the ratings agencies start downgrading the bond insurers. It's a shame. They had a sweetheart business and got into the bad side of things.

On sovereign wealth funds investing in US.

Money with terrific staying power. Looking for a higher rate of return. Money doesn't spring from nowhere though, so there will be less to buy US Treasuries.

In short, Goldilocks is in the ICU sitting up and taking fluids. We'll know next week if she's going to make it.