Thursday, August 1, 2013

Day-Long Ramp Job

Today's action is precisely what was referenced in yesterday's post.

There's absolutely no telling where or when the market (forget individual stocks, that's another story) is going to move. At the close yesterday was a vast selloff, normally indicating trouble ahead, but, if you sold at the close yesterday, you were shut out this morning unless you wanted back in at a much higher price because the market gapped up tremendously at the open and stayed right up there for the remainder of the session, closing just about where it opened.

This kind of activity may be meaningless to the casual investor, but it's death to day-traders, options players and short-term speculators unless you're on the inside and know the game plan. It's all pre-arranged, pre-planned and if you're not on the short list, you're, well... screwed. Royally. On. A. Big. Stick.

Just look at what happened to JC Penny yesterday. Entering the close of trading, word goes out that CIT has cut their lines of credit and the stock gets hit for about 10% in just a five-minute span, right before the close.

Word has it that Goldman Sachs (yeah, those guys) had recently arranged financing for the troubled retail chain, to the tune of about $2.25 billion, with JCP putting up its real estate - which is extensive - as collateral. So, when word comes that CIT has pulled their lines of credit, hastening the path to bankruptcy court, one can assume that the great Lloyd Blankfein and the criminal John Thain (CEO of CIT, formerly of BOfA's Merrill Lynch and before that, head of the NY stock exchange) must have had lunch at some point over the past few months and arranged the untidy undoing of JC Penny.

Today, via the same source, the NY Post, comes word that the CIT story was a complete fabrication and that JC Penny is still receiving shipments and has ample cash on hand.

Either way this plays out, true story or not, per CIT, somebody lost a lot of money yesterday, and, somebody made a bunch today as the stock recovered most of the losses.

Best guess is that Thain and Blankfein and their firms (or their off-shore accounts) were the main beneficiaries of this bit of dis-or-mis-information. How anybody can trade in this environment is a question for the ages or sages. It's a sick-o world out there in the land of high-finance.

Tomorrow's non-farm payroll report comes out at 8:30 am EDT, prior to the opening bell. As we used to say in high school, BFD. Look it up.

Dow 15,628.02, +128.48 (0.83%)
NASDAQ 3,675.74, +49.37 (1.36%)
S&P 500 1,706.87, +21.14 (1.25%)
NYSE Composite 9,673.39, +114.56 (1.20%)
NASDAQ Volume 1,835,171,500
NYSE Volume 4,175,730,750
Combined NYSE & NASDAQ Advance - Decline: 4375-2251
Combined NYSE & NASDAQ New highs - New lows: 698-89
WTI crude oil: 107.89, +2.86
Gold: 1,311.20, -1.80
Silver: 19.62, -0.004

No comments: