I posted on Friday that capitulation was close, we are still not there yet. When they raid the cat house they take the piano player and he’s still knocking out some show tiunes on the ivories.The fat lady isn’t singing yet either. She’s gargling with salt water, but she isn’t ready yet. I think we need the VIX around 36-37, which is where it was during the January lows. I posted a couple of days ago that we would hit the January lows by Friday, we did it today on the DOW. GM hit a 50 year low and C hit a 20 year low. The next pundit that says he thinks we will avoid a recession, I swear I’ll shoot. I also said yesterday that oil would have a $15 move quick either way based on Ben. I think I will be dead right on that call.
I kept MER and C short overnight as well as UYG again. I got banged around early because I thought oil stocks would rally with oil. As a result I got slapped with XME and ATW early and I had to re-group. I took the path of least resistance and shorted some more MER and UYG. I tried bottom fishing some POT and MOS, but they weren’t ready to come out and play and slapped me across the face. I should have known better. It was a good day but on days like today it should be much better than good. My overnights are working beautifully, I’m talking about some of my day trades. The gal at Oppenheimer, who has been right as rain on the financials, put an $11 target on C. Very bold call call, but so were her other calls and she was the only one who had the guts to jump off the party line and make the call on financials. If I still had my hedge fund I would buy her dinner and put a blank check on the table. That’s an analyst, the rest are non value added, overpaid charlatans that really are totally clueless about what makes markets work. I could go on and on. Boy, do I have the itch to start another long/short fund in this environment. But I digress.
Steel took a day off, but how about those coal stocks? What a nice reversal. NCOC is a smaller play there, and I posted a chart yesterday, so keep an eye on it. On the steel front I am watching NUE,and X for bounces, but I’m not rushing in. The coal dip was the one to buy today, not the ferts.
In my opinion the market really needs to implode with fear, puking and blood, otherwise we’ll never move forward in a meaningful fashion. Watch the VIX and lets get it up into the high 30’s. A 400 point down day tomorrow should do the trick, I can only hope.