This is how a military pilot says "Extreem peril is imminent"

If this Air Force Jockey were a Central Bank Chairman it would look similar but the radio transmission would read back something like this...
The Federal Reserve Board on Friday approved actions by the Boards of Directors of the Federal Reserve Banks...decreasing the discount rate at the Banks from 6-1/4 percent to 5-3/4 percent, effective immediately.
In reality the message is the same from both the Pilot and the Banker... What is that message you may ask? I think you get the point but it’s probably something like the following… "Hey everyone; don't look now but we are about to take it up the tail pipe! Repeatedly!"

Needless to say but I am still Bearish on the broad market. Sure next week might turn out more bull than I think, but thats a big part of being a good trader (being wrong, sometimes the majority of the time) Eventually we get on the right side of the market and have the nerve to stick it out. until then we shut down the loosing trades as fast as is realistic.

It's Friday, I'm short the dow and I will now do the happy dance... In true tech geek fashion!!!

Thanks to the Market and John Raker!

Game over man game over!

After today's fed decision to leave rates alone for six more weeks it was any ones guess as to what Uncle Ben and the boys really think. I know that the last thing you need is one more egg head telling you what to think... But here I go anyway. The Fed is lost. They don't know what to do. everyone wants to ignore the fact that there is no way in hell the US government can meet its current debt obligations and we can't go on printing money forever. The credit crunch that started with NEW and a bunch of its loan shark competition capitulating is just getting into full swing. Ben can't admit it because he doesn't want to fuel the fire. He knows where the bodies are buried but won't own up to the harsh reality of the American self destruction cycle and the role that all his big time banking ass pals had in our walk down the primrose path. I am ready to short this market right now! In fact I reentered my new favorite ETF today DXD. Could I be wrong? Yes. If there is one thing I have learned about the market is that it can not be reasoned with. So like always my stops are in place and I am still looking for the next bull market.

If you don't know what the picture has to do with this post; you need a smartbomb of a different kind. But for the one person who reads this blog... click on the post heading and the sound byte will jar what’s left of your barely sentient consciousness into recall.

Grin and Bear it...

You may have felt like you were listening to an alien when I was writing about flight to safety and asset allocation… I’ll admit that even as I was doing it I was feeling a little cowardly. But now I am pleased with my choice. With the Dow giving back all of its recent gains this week most of us are a bit shocked.

Right now my only active trade is a position I took on Wednesday. Here it is. I went long a few shares of the Proshares Ultra short ETF for the Dow. Symbol DXD. This is an ETF that seeks 2 times the negative performance of the DJIA. In 2 days I am looking at a modest gain of about 7% Not bad.
That’s it for now… Lets see where next week takes us.

Flight to Safety

It is official. I have no trades going. All my money is safely earning 5% or well allocated in a diversified mix that even Harry Markowitz would be proud of. I'm still looking for good trades so please everyone chime in here and give me some ideas.

Bubble, or no Bubble?

There are a lot of people calling this market a bubble. I for one don't think it is. Let me tell you why. EARNINGS. in the tech bubble of the 90s we had stocks that had never turned a dime of profit trading at 60 70 or even 100 dollars per share. that is not a good thing for long term holdings. In today's markets we have a lot of things going for us that we didn't back then. In the end I am going to keep it simple. looking for companies who have a one year earnings growth rate that exceeds the P/E Ratio. I.e. if a stock has a P/E of 100 and a earnings growth rate of 100% in the last year I am OK. If corporate earnings are less or nonexistent, I am hot water when the market turns. Remember earnings drive prices and when we don't see earnings it is something else driving that demand. If we enter a bear market the company with no earnings will crater as smart money moves to value. so watch for good earnings on your bullish trades and stick to proper position sizing.

Summer Time Rolls

Well now. In most circles that are replete with neophytes of trading there is always this expectation that the summer time is the time that all the slack jaws in the market just loaf and wait for fall to roll around. For all my fans that are wondering; I am long and not doubting myself. Stops are in place and I give the overbought condition of the indices no thought. You may remember ABM from a few posts back. Yes I am long and pleased with the trade. when I last looked I was up about 10%. A rain maker? No. A good trade? yes! I also went long BTU about a month ago. I like coal for future upside... Why? Most of the electricity in the USA comes form coal fired power plants. If I am wrong; oh darn. I bought again on a later breakout; thus doubling in. I opt for a doubling method when I scale in to stock trades' unless I can't come up with the needed money. If any body has questions...Reply to this post and we can shoot the breeze. Good luck this week in the capital markets... Oh and one more thing. You are not smart enough to match brain pans with the market; so don't try. Just trade with confidence and let time tell the story! Your pal- DD