Steve Barry Says:
I posted earlier about the problem GOOG would have due to the stronger dollar…ignoring the usual CNBC hype, it apparently happened, as GOOG revenue fell sequentially for the first time in its history. Y/Y, revenue was up a mere 6%. That should warrant no more than a 15 forward P/E on operating earnings…if they make $22 this year, its very fully priced at 350 or so.
Steve Barry Says:
@ahab:
I’m guilty as well…my post above was way too generous…I forgot that that GOOG does not include options expense in their “operating” earnings. I’m too lazy to do all the work, but I know they cash out like mad there…she is probably not even worth close to 350.
leftback Says:
An IPO up 44%? A blow-off rally? What is this, 1999? Where’s Henry Blodget?
Irrational exuberance, my friends…..
There must be an explanation for the rally in the IYR. Short covering would be the most obvious.
Maybe some hedgies are getting cleaned out.
leftback Says:
USD could go to 88 and make a H&S before it falls apart.
Or the pain trade = stay in its channel and make a new high at 92. Ouch.
leftback Says:
Selling more longs. Thank you, Johnny Retail. Up 150% on GMO, 50% on AA. 
Can’t help feeling that today’s buyers could have a nasty little rash by Monday’s close.
leftback Says:
Andy, great commentary.
Check this out. The big boys are buying zeros again. It pays to watch all markets. (1 month t-bill 0.08->0.01)
http://zerohedge.blogspot.com/2009/04/one-month-t-bill-at-001.html
We had also noticed the smart money apparently leaving the building this week and have followed.
Something evil this way comes. Sell ‘em.
leftback Says:
Added to modest shorts. There really can’t be much left in this thing, and GE and C are not going to save it.
Today feels like the inverse of March 6. Shorts capitulating everywhere, except Mannwich and Stevo.
Did a lot of liquidating of longs today, taking profits never hurts.
leftback Says:
http://www.calculatedriskblog.com/2009/04/regulators-give-bankunited-20-days-to.html
bankunited (biggest FL bank) receives final notice from FDIC This one would be quite big for the FDIC to take down. Of course, C would be bigger….
leftback Says:
@Transor Z: Luckily the economy is in recovery, the US consumer is coming back, and all the option ARMs and prime jumbos will turn out to be money good.
(we also have a bridge we would like to sell you…)
Let’s see if C brings out Pandit in a dress tomorrow and calls him “Miss Financial One Stop Supermarket”. Between Pandit and Immelt we are going to see two Masters of Weaselry at work in the morning. (C and GE earning)
Looking at the money scurrying into the short end of the curve this week (yield of 3 month t-bill drop from 0.08 to 0.01), makes me think that something is up. I saw this happen in October and again in January before the selling started. An Indy Mac sized bank failure might make the market sit up and take notice.
leftback Says:
I think a lot of today’s exuberance was about options expiration tomorrow. The day before expiration is often the most interesting day of the week. All bets are off on Monday, or at least this month’s bets are off.
leftback Says:
Help me out here. I had some more thoughts on today’s -and this week’s - trading. What if some hedgie or other large trader had put on a huge option play some time ago? One that looked really good when SPX was 666.79 and was looking like it would be ITM, but then started to degrade rapidly as the market rallied upward in March?
They might have had to desperately buy the SPOOS in an attempt to mitigate enormous losses? I am not an options guy but I have heard about similar idiocy. It’s even better when it is a prop trading desk or IB rogue trader.
leftback Says:
Another technical trader who thinks this rally is about done:
http://online.barrons.com/article/SB123974805332418441.html
ahab: Well, if you had a complex play on - something like a bet that the SPX would be between 600 and 700, for example and then the market rallied far out of that range. Someone else should explain this, like Hoffer.
