Reports: GM filing for bankruptcy Monday morning.

GM appears to be on track to file for Bankruptcy at 8 a.m. tomorrow. It was only a matter of time, most people who understood the gravity of GM's situation knew it was a dying enterprise from the time it fell out of the sky. Karl Denninger's blog The Market Ticker has a good breakdown of the ramifications this will bring, specifically the bondholders will be wiped out. Obviously the suppliers who have been struggling with GM for over a year now are not going to be paid on current orders along the supply chain. Who knows what this will bring market wise, hell it could already be baked in. IF that is the case we will probably be flat monday. If it is not the case this thing is going to .30c PPS, traders will rip it apart.. IF they can get their hands on shares, it is on the hard to borrow list. My thought process is currently in a bearish overall cycle and believe this is bad for the markets, because mom and pop are going to sell, they were naive enough to believe this would never happen. Maybe word of the BK got out late friday, causing a massive short position to puked up, possibly because they were banking on a worse scenario in regards to GM. Tomorrow will tell.

GM is now a penny stock, much thanks to the UAW

There you have it folks, GM has traded below 1 dollar PPS. How sad this story has become. UAW is to blame I believe, their shotty workman ship produced shitty cars for years, now it is coming back to haunt them. The UAW doesnt care they just kept demaning more and more benefits, more money more buyouts... Do they not understand you cannot opperate a business if the expenses of the business are higher than the revenue? I doubt they understood this, if they did they probably would all still have job security. rant over.

Dovetailing from yesterday's chatter on inflation, highlighted by Marc Faber

Marc Faber said yesterday:

May 27 (Bloomberg) — The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said.

Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said.

Yesterday I posted on how we are on track for Zimbabwe type inflation, it looks like others are on the same thought lines. ZeroHedge pointed this article out, so props to you Tyler.

As far as the market goes today, there is quite a bit of volatility going around intra day. We swung from positive to negative to close up over 100 points, blah. No of this daily gyration means anything to me until we break down away from the trend line or break out of the downward channel to the upside. My only trade today was shorting the SPY at its days high, covering for about a .90c profit. Take it, move on.

Run it back Wednesday, vix spike! Hyper-inflation coming!

I think today was supposed to be yesterday, given the sell off. The market is back to is old tricks, market down/commodities up. Yesterday I talked a bit about how the instiutions were selling into the propped up market, looks like i was right. The imaginary mom & pop buyers who are buying into this wonderful market, as the government wants us to thingk, were not there today to save the day, no buy programs today. Market falls. whala.

Did any of you out there realize on of the best plays for 2008 was Dollar Tree, McDonalds ran game also. These plays always work in a recession, people buy cheap food. How many dollars will it take to buy a 6 piece chicken mcnugget with hyperinflation? Should we ask Zimbabwee, Dr. Doom thinks so?

Chart wise we are back in the meaty power zone of the channel, chart here. Yesterday was a big test of resistance, if we would have pushed higher and broke out today, i would have thrown a fit like Macke. But we didn't, my faith was restored. My trade idea for the near term is start getting short, if you are not short already start dabbling, if you are long you are greedy. REMEMBER take profits when they are there, they evaporate oh so fast on paper.

Vix volatility update, "Turn the machines back on!"

Well, damn ill admit yesterday was quite the surprise to me, i should have seen it coming. HA

"Wouldacouldashould" is trading jargon for a trade you look back in hindsight and say "if only", screw that garbage. Only dwell on a thought like this for 30 seconds, if you dwell longer you will never let it go.

My theory today, which Zero Hedge dovetailed on, is one of manipulation. Manipulation cloaked in the the guise of a positive outlook, 3% for this BS please. MOre likely than not institutions are selling into this propped up market. WE are at the top of the channel, either we break out or break down, something is going to happen and my guess is we mind the channel. Based on three puzzle pieces.

1. The vix is in a neutral trading pattern, but is very oversold. WE are near the breakout zone, ie nearer to the two green lines imminent intersection on the right.

2.The bulls are simply tired. Why are they tired? a. "They" the bulls are actually buy programs, not mom and pop buying up the market because the government splitting the dollar 2:1! TURN THE THE MACHINES BACK ON

3. Bank of America was down today. Why? a. Gordon Gekko is selling all the shares into the pop from it's recent UPGRADE.

As for Google, i have posted charts of google in the past, basically showing a megaphone pattern formation, with google minding the channel. Past charts HERE & HERE. As you may all know already i do not make many "calls" i tend to focus on the general market as a whole, but i did highlight an entry point on google around 370 with a target of 415 intermediate term. It looks like we are still on target, we will see how close we come to 600PPS. IF the market takes a dive, it looks like we are heading down below the mid line of the channel, in that case i will set a new target of 330PPS.

DO technical levels coincide with sentiment changes in the macro media? you be the judge.

I hope the home gamers out there are following the game being played by the media. Whats the name of the game you ask? "lets change sentiment at key reversal levels". How's that for a game? According to google, if you search "stock market collapse" you get 5.4 million results, if you search market rebound you get 1.2 million results. Just a little fun with google, but this shows there is still a great deal of thinking on the bearish side of the bridge. If you watch cnbc tomorrow i bet you will notice a bearish overall tone. Is this because the players who run the show over at cnbc know we are at a key reversal level, specifically on the SPX? More chance than not they do understand this but they have a short memory over there. I am not going to single out cnbc as the sole source of the bs i believe Macke was talking about in his rant, every popular market related media source cheer leads the market up and down. Is this bad? i think no, but once again everyone should be made aware of these occurrences. Some of you out there might think this is a bit obvious but you would be suprised how many people simply do not understand the art of stock market operation. It takes a market to make a market. If you look at the chart of the SPX i posted last week, you will see we are now at the upper limit of the down trending channel, when did the media start pushing out stories about the rally being a bear rally, not the real thing, there are still problems yada yada..real answer is, when we started testing these levels. we have come to far to fast, let see how this week plays out.

The bear's are back, not even Oprah can save us now

The bear's won the battle this week. I believe the mom & pop market participants are getting tired of defending the upper boundary of the downward primary channel. My guess is and i do not know this, but many market participants are looking at a chart strikingly similar to the ones above. We have been in the process of topping in this rallying across the channel. THe rally being in the form of a rising bear wedge, highlighted in black. The PPS broke down out of the wedge following the channel closely in consolidation. Psychology takes hold here on the public because the market hasn't dropped substantially yet, IE there are still suckers the hedgie's can sell into. My guess is the shorts are in place, and now its up to the media to change the sentiment and bring this bad boy down. Maybe Oprah can help?

--Money trend analysis here.

Have a safe weekend.

Jeff Macke has gone crazy! Out of CNBC?

If anyone saw this interview between Jeff Macke and Dennis Kneale, wow this guy has gone nuts. If you have not seen it, watch it on the left. I think this guy has either lost mad loot on a shitty trade or he is just FED up with the market going straight up... Im am halfway with him in his thinking, if i am following him correctly. Interesting thing is, he is not on Fast Money right now, CNBC has got them in a grip! For more information check out Clustertock.

What does Program Trading & Bank Owned Life Insurance have in common? both are shady!

As you can see from the chart on the left, today was a fake out. The bears ended up taking control of the of the markets pulling us out of the daily channel.

*If you played this as a scalp good work. The SPX chart is a good example of a trend break down. The chart interval is 1 min, if you got short around the 912 level in the SPX, covering around the 902 level you would have made a great trade.

In other news, BOLI or (for those out of the circle is Bank Owned Life Insurance) is being used to help pay bonuses, deferred income & pensions of companies such as Bank of America. Iv learned this is common practice first hand, i was once in the insurance field back in the days of college. During this time i learned BOLI insurance is a sure fire way to make a killer close. The premiums on these policies are huge, like 30k a year, whichever agents gets one of these gets paid around the industry standard, 30-100% of the first year premium, plus residuals. I do not find anything wrong with this practice, i just think everyone should be aware that it does go on, even at your local bank. It helps protect the bank from catastrophic loss of a key person, which would significantly affect the operations of the bank as a going concern.

Target's fiscal first quarter earnings declined 13%, signaling the middle class is being affected by reductions in pay, lay offs and overall spending declines. So much for the value product plays, they only last for so long, everyone runs out of money eventually. Moving over to the global arena, Deere has been affected by the international slowdown in farm & construction equipment spending, OBVIOUSLY related to our NOT improving financial situation. CONTRARY to what CNBC thinks.

The US supports the world, we falter they all falter. Deere's chart correlates well with the commodity chart for corn. I like seeing concrete evidence of true economic slowing like this, what i don't like seeing is an increase in program trading the first weeks of May. This is evidence, like ZeroHedge stated, the markets are being propped up by the fed.

Quick update on Google's rise to 600.

I posted a few weeks ago on Google's price target being raised to 600. If you look at the chart to the left you will notice we are in a megaphone trading pattern.

*My take on the psychology behind the megaphone trading pattern is one that screams indecision in the valuation the companies shares. Whether it be how much revenue they expect in the future and or growth rates, skew and overall market sentiment all factor into various PPS "fair value" models. When a stock makes higher lows and higher highs it is considered up trending, but if it pivots at a clear upper trend line another example here , you have a megaphone shaped bell.

Back to the chart, as you can see the PPS has hesitated and pivoted at the mid line of the channel. Ok great? reason this is interesting is the stock is trading technically well, you know there are others out there playing a chart similar to this, thus you are not in the trade *alone.

Every successful trader must be able to make decisions on his or her own without the input of others. Why? #1 reason being time. If you are stuck in a trade and you have a lot of risk on, you must exit the trade mitigating risk fast, think fast trade fast. You must know break even points before you enter any trade, and know always have a exit strategy. ie. hedge and or puke up the shares and bang out, moving onto another trade. dont dwell, you will miss opportunity.

Real Estate recovery? Case-Shiller, say's not so fast

As we all know Monday we had a nice.. caught 3% run up on some BS housing information, i think meant to be fluff. Remember those pulling the strings which make this market operate are tricksters. Today was a choppy trade, really was a waste unless you shorted the close as the real numbers came out. This sent the market closing on near day lows.

Take a look at the chart over there, we have a long way to go ladies.

Tomorrow i am looking for a gap down at the open, how far? Depends on the futures & how far they are down pre market. Remember psychology plays a large role in how the market makers will open the stocks.

Oh, and this wont help sentiment, HP's profit sinks 17%.

TIVO looking to have an interesting expiration

Rumor has it there is large open interest activity surrounding the 7.50 May TIVO strike.

This looks like it could a pin risk, but if they do exercise it would account for a HUGE increase over the average trading volume. This could for sure affect the share price.

P.S. The futures are up. Why do i bring this up? because i think they are gonna gap the market up tomorrow and close the gap and keep selling into the close.

SPY short time. Was that really a bear wedge?

ONly if you believe in true technical analysis and have confidence though. COnfidence in pulling the trigger that is. What i am looking to get into is some short side SPY puts, since you cant borrow anything with volatility! I am basing this decision on this weeks bearish trading activity and the set up for tomorrow. Remember equity options expire tomorrow, and from my experience when you have a week of semi bearishness Friday is the day you *usually* get the sell off, with added volume and volatility from option expiring. Maybe some shoe will drop tomorrow grinding the marks down, who knows. The chart over there is of the SPDRS or SPY for the newbies, the main focus being the new downward channel highlighted in dark green. If we mind this channel we are a textbook short until the mid channel line. Then cover half cover all once we hit the bottom of the channel. The QQQQ's have this same formation, but more pronounced because of their larger sell off. Hedge accordingly.

Sony posts first quarterly loss in 11 years

A telling indicator of waning middle ground consumer spending, Check out the story here Here.

Lets watch the futures and see if this affects anything...

My ultra bear theory. Is the rally over..

Wow what a day makes! Nice 2+% drop across all indexes, i am not worried i am actually quite happy. WHy you might ask? Here are four reasons:

1. The market has been so overbought it throws most lower indicators like Stoch and MACD out of whack, any know it all technician knows this. YOU dont.

2. So many people (amateurs) have jumped into this market thinking, "man i am a great trader, i picked so many winners" or "I'm gonna buy more because i was right the first time!" -- these thoughts coming out of newbie market participants usually signal the bag your holding is filling with shit.

3. It's been a violent rally driven by the media, but have the fundamentals really changed? Has real estate bottomed? no. Has unemployment peaked? no. Has trust been restored? no.

4. VOLUME, where is the volume... we had a spike on may 6Th, when we topped. THE big money puked, taking on shorts today.

Thats why i am happy, because more volatility is coming.

Wow that was a lot of numbers, back to my task at hand. THe chart you see on the left is of the SPX ie S&P500. I know lots of lines, but if you look closely you can see the resistance met in the first week in may, followed by a candle falling out of the rising bear wedge. Have we broken down completely? Who knows. Here is my ULTRA bear theory:

ALright so what COULD be happening here in a nutshell is we are trading on a downward trend channel bullish breakout, which might have failed this week? The channel was formed in August of 2008 upper boundary, early October 2008 the lower boundary started. We traded in this channel up until the PIVOT point or BOTTOM @666 where THEY proceeded to bounce the price up until it broke the upper boundary the second week in April, trending up to resistance around 925. NOW this could be the current bear market rally top. If the news is bad enough and the selling really takes hold on Friday we could mind the right hand side of the triangle (thick blue line) pulling back into the channel continuing on till we test the bottom? I know this sounds far fetched but anything can happened. SOmthing is about to happen but no one really knows what the tipping point will be. Well see how the rest of the week plays out.

The Markets are out of breath. more CNBC drivel

To all the technicians out there, like myself, the market looks toppy. Hell, we all know this market is overbought on just about every indicator but this does not matter. Retail trading in my mind has really caused this market to overshoot, just like we overshot 20% down during the "crash". Whatever the case maybe, one fact remains, people are tired. When I say people I mean the kool-aide drinkers who believe anything cnbc and the likes tell them.

*FOLKS anything hitting CNBC, whether it maybe a popular market theory or sentiment, is old news!! Ill admit i have CNBC on when i am trading, but not for stock tips or insightful drivel. I keep it on in CASE some ridiculous news is first broke on CNBC, like the BS news on a takeover of Sprint SK Telecom Merger, i believe it was later summer 2008. This news came out around noon and it sent Sprints stock flying, only to drop back like a rock after Gasparino corrected himself, scammers. Rant over.
Anyway, the reason i bring this up is, do you own due diligence because if you do not you may get stuck holding the bag when the smart money turns this market around. CNBC = wanna be smart money but is always late to the party.

The reason this market is tired comes down to retail trading being shaken out of the market, possibly because people stuck in these 3x bear products havebeen horrificly beaten down in the near term are losing interest. People who are not seasoned traders, or those who have been forced to trade because they are looking to clear up a wash sale are getting worn out with this daily grind. Bids are beginning to lighten up and volume is getting lower, possibly signaling people simply cant sustain they must stop. When this happens the market will fall, the kool-aide drinkers will sell in a cascade.

Are the bears out of hibernation? Rally out of steam.

Today's trading action was finally mild confirmation on bears taking the stage. A few things happened today which have not happened in the past sell offs during this 2 month rally. The main observation should be the gap held in the am, followed by sideways trading action in a mildy sloping downward trend. Second being the action in the last 45 minutes of the trading day, ultimately resulting in a close on i believe were the days low. The bears were finally able to keep the bulls at bay, bid whacking all day today kept the bulls in the pen. Setting up for today was some squeezing into the close on Friday, followed by a bottoming in UUP which Erik mentioned here, http://erikmarketview.blogspot.com/2009/05/us-dollar-gold-oil-may-11-15.html. This is all signs equities are becoming weak again. If we can get UUP back up into its channel, we might continue the onward march, bringing energy prices back down, along with commodities. sorry for the outside link. The energy prices come down because of the shoring up in the $'s value, we saw this happening during the recent "crash" as money poured into treasuries and out of equities.

GOOGLE new target 600 PPS. Market has legs, UGH

Today Google was upgraded with a target of 600PPS put on it. I have put a few lines on a google chart i have been trading for some time. Basically what i did was extend the current crescendo of trend lines out until they reached 600. The chart is very rough and theoretical, but it is good for visualisation of the trend. In other news the market was up 165 points, on seemingly nothing. Next week once again will be telling, probably lots of chop. If you want to play something in this market, the best way to play it is largely in cash, unless you can spread off the risk or hedge. we are at levels once again showing extreme overbot conditions.

Also i noticed an interesting trading pattern on the JPM chart. if you look closely it appears to be a inverse descending triangle, with the break out point being 48 pps. hard resistance has formed in this area. I would be willing to guess the medium term target could be that level.

Tech takes a tumble, GOOG almost reaches target

If you paid attention to the NASDAQ today you noticed it was down over 2% while the the overall market was down a mere 1%. This is the case because tech has been the front running in this market, some names gaining large amounts in the recent months. one tech i have been focusing on, and many of you have also is GOOGLE. i posted back on April 13, http://ad.vu/9hs2 showing google's trend, looking for 415 medium term. As of yesterday GOOG hit 410, close enough. anyway google looks as if it could be breaking trend, pulled down by other NASdaq names. The chart to the left has the area of targer highlighted. IF you notice the upper channel line has been move up, i did this to show how the channel is in crescendo.

Stress Test results = Nul Now in overshoot territory

Hello everyone, i am sorry i have been away from quite some time, as hard line Internet issues has plagued me, and i have actually just been fairly hands of in this market do its precariously propped up nature. A lot has happened since i spoke last, the single largest thing being the stress test results being made public. It appears the reaction by the street is Nul and void. I find this disheartening because so many people who have bought this market up and mom and pop. These people do not fully understand the macro cycles of the market and the underlying reasons why we have traded up as fast as we have. IF you find yourself in this category you should strongly consider you are now holding and or buying stocks on greed. Take profits.
Now i know everyone in this market thinks they are a stock picking genius, but that is only a psychological reaction. Think about it, just about any stock you would have bought in the last month is up and up big. This could cause one to become overconfident, you have thoughts in your mind like, "I have outsmarted the market" "this is so easy" "if i sell now i am gonna miss out".. REMOVE those thoughts from your mind, replacing with "take profits now" "I will regret not selling if this thing tanks" "bear market rallies end with GOOD news". If you understand this you will win. When you think you have the market out smarted the market will let you know you are wrong and ram it right up your ass! Trust me on this one, iv seen it done, and experienced it.
The results of the stress tests have actually been looked at on the street as good news, causing upwards trading action after hours in SPY, and inversely causing SKF FAZ to drop like a rock. FAZ is an ETF which has blown out many traders i am sure. SKF has been a widow maker also, but hell they could be primed for a pop. IF you are looking for some inter sting trading opportunities you could look at some OTM calls in FAZ and SKF for June. The premium in these lines have been crushed. You might think hey it could never happen, but no one thought FAZ would hit 5 bucks from over 100 and no one thought skf would be around 45 bucks from 26o. These are huge trading ranges, if you play your cards right you could capitalize using the leverage of options on these massive swings. Best way to capitalize is using by purchasing some "cheap" OTM calls and or puts if you go with FAS. Hell, some of these far out strikes have trading ranges from .10 - 7 bucks.