Ben Bernanke Scares The Stock Market

Let's just forget about the whole first part of the day. I traded very lightly and was up about $200.

Then, the FED cut rates and the market freaked out.

I generally trade FED days very lightly. While I like to trade when the market is volatile, the FED days typically have this "the market is going to the moon/the market is going straight to hell" type of feel to them that I just can't trade.

Mostly because the market takes the round trip from the moon and back to hell in under 5 minutes.

The fills are often horrible.

So, even after the cut, I traded with small size. I'll detail my trades in one stock, SKF. Readers of "the Fly's" blog know that yesterday I bought some in my LT account at $100.04. I figured, if I lost in the trade I could harass "the Fly" about it forever, and if I made money in the trade, it was its own reward. A win-win situation if you will...

Anyway, these were daytrades though. Completely separate from my LT account. I'll hold that position until the end of the bear market... or 2010.



2:20 Buy 100 @ $97.24
2:26 Sell 100 @ $96.01 (the low of the move on a sell-stop @ $96.50... some fill!)
2:37 Short 200 @ $99.76
2:39 Buy 200 @ $98.77
3:08 Buy 200 @ $95.25
3:09 Sell 100 @ $95.47
3:13 Sell 100 @ $96.83

So as you can see, I left dollars and dollars on the table on both sides of most of these trades. Still, I managed to make $250 in the stock. But man, if only I wasn't so damned skittish.

The reason why I didn't catch the move from 3:20 on was simply because I was waiting for a pullback to enter. This is also why I missed a lot of short opportunities in other stocks. I looked at the SPY and thought we'd maybe form a Head and Shoulders formation before heading lower. Instead, the market traded lower violently and quickly, chopping off the dudes arm.

And like they say in Afghanistan, no arm, no shoulder. Okay, that was in poor taste... let's move on.



So I missed the move. It's too bad, but I didn't want to chase. I knew that it was very possible that the market could moonshot again and I wasn't looking to get squeezed.

After this move, I think it's safe to start trading again with some size. The volatility appears to be back. Since Thursday of last week I've been taking it easy. Hopefully now the volume will come back to the market and trading will be good.

I'm going to get a lot of sleep tonight (after watching the Republican debate) and be at the desk early.

Here's the stats:
P&L, $421
Best, SKF, $251
Worst, CBI, -$97

15,600 shares traded.
16 stocks traded. 10 winners, 6 losers.

NOTE: Expect an "around the house" post about me and a valet parking dictator named "Romeo" to drop today or tomorrow.

Virtual Office, $4200. Dow, -37.47, 12,442.83.

Sanglucci, $1425 on 47,200 shares traded.
Dehtrader, $1035 on 2100 shares traded.
Evolution, $679 on 55,400 shares traded.
OBAT, $550 on 4800 shares traded.
Me, $421 on 15,600 shares traded.
Denarii, $52 on 1000 shares traded.
Wincity, $38 on 200 shares traded.

Well it was a wild one.

Ben "the beard" Bernanke did not disappoint the markets, cutting 50bp in the FED funds rate and another 50 at the discount window. And the market completely ripped on the good news.

Until it sold off like a motherfucker.



Volume was dead all day but took off after 2:15. The close today was amazing... financial stocks got completely crushed.

The VO did well. Not one red trader today... always a nice way to end the day.

I, for one, am very happy the FED is now behind us. Time to start trading again!

The FED Cuts 50 Basis Points

Ben Bernanke, Chairman Of The Federal Reserve

Planet Freaking Earth

Things really slow down the hour ahead of the meeting. Might as well laugh.


Planet Freaking Earth - Watch more free videos

NOTE: I can't stop watching this...

"The Fly's" Platinum Party

Be the millionth visitor and get a can of soda.

John Edwards Dropping Out Of Campaign

Ex-Senator, John Edwards

Link.

I'm guessing this helps BO, as Edwards was an anti-establishment type of candidate.

UPDATE: Just gave his "drop out" speech. Surprisingly, he conceded that he "fucking hates poor people."

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.

Stock Market (and Politics) Link-Love

• McCain Defeats Romney In Florida
• Hey Look! Our Mortgage Brokers Ruined Europe's Banks Too. UBS Writes Down $14B.
• FED Looking To Make People Spend More, Create Bubbles.
• Thank You NYT For Your Biased Article... Sigh.
• Not A Myth: Hot Tap Water Is Bad For You.
• I Found This Yesterday Over At Wall Street Fighter. 40 Great Business Quotes.
• Go Feed The Bull! It's Like Digg For The Stock Market, Only My Stories Actually Have A Chance To Get Published.

Finally, a video. Hillary is going to have to cheat if she wants the nomination and she has no problem with that. The Democratic candidates were not suppossed to actively campaign in Florida due to DNC rules that she ignored. Just another reason for me not to support her.

McCain Wins Florida; Guiliani Done.

Senator John McCain

Guiliani went from first nationally to a complete fuck-up. At least he didn't scream.

Good Morning

Time: 7:04
Mood: Mellow

Internet Going In And Out

No daily post.... apologies.

Virtual Office,$2480. Dow +96.41, 12,480.30.

Dehtrader, $1164 on 3600 shares traded.
Sanglucci, $556 on 51,600 shares traded.
Me, $513 on 7600 shares traded.
OBAT, $206 on 11,400 shares traded.
Wincity, $41 on 400 shares traded.
Retardo, no trades.

Volume is really screeching to a halt ahead of the FED meeting tomorrow. We traded about 1.5 billion shares today and the VIX fell. In other words, it was a potentially slow day for traders.

However, I'm not complaining about the volume and the VO did well. There were lots of opportunities in the coal stocks and in the financials. Honestly though, after not sleeping and then waking early to surf, I was in no shape to trade actively.

My brain felt like mush. Besides, I had an blog war to wage.

Who knows what happens tomorrow. I still think the cut last week was to support the plummeting market. That was a mistake. Whether "Ben The Beard" admits that mistake by not cutting tomorrow is the question.

Erin Burnett Looks Especially Good Today

I'm just saying.

I'm going to open a new label on my blog for when I say nice things about CNBC. Just to keep it "fair and balanced" around here.

Dinosaur Trader Under Attack!!!

Looks like stock market bloggers everywhere are trying to attack me.

First there was this.

Then this. And a little bit of that (notice the url).

And now finally this.

They only make me stronger.

Dennis Kneale's "Gazelle Market"

Today, Mr. Kneale claimed that we are neither in a Bull market or a Bear market, but rather, a "Gazelle's market."



Clever.

He says everyone is scaring everyone else... like gazelles.

According to Mr. Kneale, 62% of Americans think we're heading into a recession. Why do so many think we're heading into a recession? Because the media keeps telling them so.

Really? It's that simple? Was the media responsible for all past recessions as well? Or does the economic cycle have anything to do with it at all?

I think so many Americans think we're heading into a recession because they know their dollars buy less, their houses are declining in value and in many cases, they're not even able to sell their houses because buyers can't get credit.

Meanwhile, gasoline, energy and food costs are skyrocketing.

I don't think people are such lemmings to listen exactly to what the media says anymore. In any case, I hope they're not.

Let's never forget what happened the last time we listened, without criticism, to the media...

Dennis Kneale Is Cool. Danny Might Be An Idiot Though.

I don't normally respond to skaters/stoners, but because Danny got all high and mighty on me yesterday, I figured a response was in order.

Regarding the now famous "Dennis Kneal Idiot Controversy," Danny wrote the following as his argument why Mr. Kneale didn't read my blog, but rather his blog.

I’m not giving DT credit because I never saw that post and it didn’t influence mine at all, so he doesn’t deserve it from me.

DT’s post was about how Buchanan tore kneale a new one…compared to me, who sacked up, and tore kneale a new one myself.

Although the same picture and topic of discussion is a coincidence. FWIW, image search dennis kneale and you’ll find neither of us scoured hard for that asinine picture of him.

I think he was calling out my post because our traffic trounces his…I am willing to entertain that someone on the street reads the fly who linked me. No offense to DT, but I doubt his note caught the attention of wall st. pundits.

Clearly, Danny feels he's the rockstar over at IBC... "our traffic," HAHAHA!

However, the numbers tell a different, more sobering, story. In fact, the sheer weight of this story could break all of Danny's little skateboards.

Check out the traffic at "the Fly's" old blog.



Very, very impressive.

Okay, now check out the new traffic numbers.


Still very impressive. While it's true the page views have doubled, recall that at "the Fly's" old blog there was only one page to view for all of his posts. Now, you have to open a new page to read each of his posts.

What's telling is the total number of visitors. In October of 07, the last month of "the Fly's" old blog, he had 117,000 visitors. In January of 08, he has yet to reach that amount with one day remaining and fell short of that total in November and December.

In short, the existence of Danny has done nothing to bring new visitors to the site.

So let's talk about page views. Assuming "the Fly" is still responsible for the amount he was bringing in in October (which I doubt given his recent market calls, I'm sure his personal traffic is up), that leaves us with an extra 180,000 monthly, and 6000 daily, page views for which Danny could claim responsibility.

But there's one problem...

Those 6000 extra daily page views are spread out across "the Fly's" blog, Woodshedders, Dannys, and the Peanut Gallery. Since Ducati and "the Rage" are so new to IBC, I won't include them here. However, even if you assume those page views are evenly distributed across the blog, (which they're not, they all go to Woody's blog and my posts in the PG) that would yield about 1500 a day for Danny.

In the last week, twice my third tier blog hit 1500 page views and twice they were over 1200. So Danny's blog is hardly trouncing mine. Especially considering Danny has a "third tier blog inside a first tier blog."

My point? While it's indeed very possible that Wall Street pundits are viewing "the Fly's" blog, it's not at all clear that they are going "all the way over" to Danny's tab to read his highly informative posts.

Danny's "traffic trouncing" argument holds no water. In fact, it's very telling that "the Fly" needed to point out Danny's post on his own blog.

DT wins again.

UPDATE: This whole argument could be moot. Apparently, Barry Ritholtz was calling Kneale an idiot (in a nice way) way back in the summer of 07.

More Spam That Is Almost Poetic

I received the following in my bulk folder this morning...

His courage, he fixed an arrow in his bow.' lord very soon.
. . . I heard from the nurse attendant gave of the figure
they had seen made it seem me sae! But i s' hae a grip o'
'im yet, or my like that. And two whatyoucall 'em paternity
cases, it was here the council, solicited by thomas morris,
of its citizens, and died soon after he went away. Kansas,
pp. 352, illustration: james h. Lane. Crichton. Certainly
not, my lady. The utmost i martins last email. It was short,
saying that.

Good Morning

Time: 6:03
Mood: Frustrated

Note: 2 nights in a row without any sleep. However, I expect my mood to improve as I'm headed to the beach to go surfing (in the 40 degree water... ouch). Hopefully, I'm back by the open.

Was Dennis Kneale Referring To My Post?

Or Danny's? We'll probably never know...

However, not only was my post up 6 hours before, but I also have a history of calling Mr. Kneale an idiot.

For example, a simple search on Google yields this.

Oh, and in the comment section of my post, I even asked Mr. Kneale to respond on air to my post.

So while it's true the traffic numbers at IBC are a multiple of mine, I'd argue that it's probable he found himself here. In fact, after watching the clip again, it seems obvious.

If so, welcome Mr. Kneale. Thanks for reading. Of course, you're welcome to weekend blog here to defend your honor.

Virtual Office, -$2202. Dow, +176.72, 12,383.89.

Denarii, $67 on 2200 shares traded.
Wincity, no trades.
Sanglucci, -$126 on 20,400 shares traded.
OBAT, -$329 on 17,600 shares traded.
Me, -$340 on 20,600 shares traded.
Dehtrader, -$1474 on 3360 shares traded.

Sanglucci summed it up... "What a shitty day!"

I'll have to elaborate more later... need to head out for a bit.

NOTE: No Daily Post tonight... I got home too late to want to analyze much. Meanwhile, I'm surfing early which means I need to do all my research for tomorrow, tonight.