Morning Audibles 5.11.10 - Red, Blue, or "Chill"?

Despite the heightened volatility in the markets these past 3 trading days or so (which included two weekend days), your humble blog host, CV, has been uncannily subdued in mood... Want answers? Well basically, I've decided that instead of taking one of these...

Blue Pill - Red Pill

I'd just take one of these (and be content to watch the fireworks for a bit)...

I was very, very, very lucky to be able to do this... CV had an SPXU position on (basically since March 5th, when the SPX took out the FIBO retrace back to 1150 after the January dip)... With two months of incessant grinding, it was my idea that that position might end up in the dumpster along with everyones SRS & FAZ positions from '09... Alas, in a 'miracle moment' during last Thursdays FLASH CRASH, that position (which had been 'deeply' red), flashed green to the tune of $800 semolians (beer money, I know, but it's better than losing for a thirsty boy like me)... Anyway, I somehow managed to get out of that position right then and there (which was a miracle in of itself)... The SPX was around 1074 at the time (which is even MORE a miracle as it was near the lows for the day)...

Anyway, since that time I've put on no new positions (on either side)... I still have some short SPY positions, but a lot of cash as well... So I've just been "chillin'"... But that doesn't mean things aren't on my mind... This is a short list:

- The FLASH CRASH... We're fairly confident now that it wasn't "fat fingered". But the media reporting did its work well, and I'd say most of the Johnny's out there are still convinced that that's what it was. Since they have the attention spans of the gnat population, they've already clicked the remote back to the regularly scheduled programming. Wrap it up and put it to bed. The "fat finger" is now in the dumpster along with JFK assassination & Area 51... Question is, could "the squid" have triggered this in a way to deflect attention from themselves...Did they Did they?

- $972B is just a "down payment" for bailing out the Euro Zone (trust me)... Consider your appetites "whetted"... They're just conditioning us for what's to come... As we all know, once you throw good money after bad, there is more to follow...

- I'm sure nobody needs convincing of that last bullet point, but if you do, I'll simply nominate the "latest"... Fannie Mae, the mortgage-finance company operating under federal conservatorship, said it will seek $8.4 billion in aid from the U.S. Treasury Department after reporting its 11th-straight quarterly loss... Need I go further?

- Lest anyone get TOO COMFY with all these ideas, let me remind you... Governments bailed the banks out (using taxpayer money), now the banks are bailing the governments (who are insolvent largely because of the bank bailouts) - The banks themselves will net 1.5 billion a year in fees... More bonuses for bankers... Also, The IMF's piece of this thing is allegedly €286 billion... The US is 17% of that (or about $50 billion)... In order for that money to be "appropriated", it has to be "appropriated" (by Congress)... Expect "things" to be tacked on to that "Appropriations Bill"... GET READY TO BE HANDED THE TAX BILL FOR ALL OF THE ABOVE...

- Goldman Sachs, which makes more money from trading than any other Wall Street firm, also disclosed that its traders generated $100 million or more on 35 days during the first quarter and lost money on no days... DO I NEED TO COMMENT ON THIS?

- Warren Buffett Has "No Comment" On His Sale Of $30MM In MCO Shares Just After Moody's Wells Notice Receipt... Hmmm...

- On the subject of "comments", I thought both Bernanke and Geithner had said the crisis was behind us? (I'm too lazy to look these quotes up, but if someone has the right combination of boredom and "bloodhound" in them, they might look it up for extra credit)... Those quotes WILL come in handy some day...

- I kind of 'secretly' hope that the SPX makes it WAAAAY up there on a retest of the highs (personally - I have it pegged for around 1190 at the moment - but that's just a 'crude' guess)... In any case, it would make a HUGE sideways wedge (from 1044)... That's about a 180 point S&P range... Perhaps 'annoying', but hell, for TECHNICAL TRADERS, it might be a dream...

- World Cup is coming in a few weeks to South Africa... I've heard that 40,000 "prostitutes" have descended on the country... Gee - I suppose that that means that Wall St. has effectively SHUT DOWN until the end of July & will be working down there for pay... THE ALGOS REALLY ARE IN CHARGE! Good luck trading against them!

Oh, and finally... In my "browsing", I came across this "click pay" ad the other day...

LOL - All I can say is, something about it seems, well... APPROPRIATE...