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Monday Market Expectations 3/14/11 - Jeremy Frommer vs Jeremy Klein, The Debate Continues


Dear Jeremy Klein:

I have waited since Monday, Feb 28th to respond to you, my old partner and dear friend.

First, I have covered all my shorts and started to build a small long book. The trade back through 1300 that I’d blogged about has occured. We had a nearly 5% correction from recent Highs on the S&P futures of 1343 to the Lows set in overnight of 1283. The next time I’ll attempt to short this market will be near the 1304 - 1308 level. I will be slowly buying speculative take out names as they have cheapened up significantly.

I will now respond to your points one at a time.

1. You recently made your perception clear that oil could soon return below 90, when you stated “crude was trading at 85 just prior to the Libyan crisis.” Well, its been 2 weeks, we are nowhere near 90, and I still believe it will be a while longer before we somehow find our way back to that level. We are far from out of the middle east oil crisis, and this could continue for the rest of the year.

2. You also believed that the revised GDP was not all that important as it was a look back of very old data, and more importantly thought the housing data is priced into market. Perhaps this is true, but the bottom line is that we have 5 years of inventory build up. So while I am long term Bullish and have been short term bearish, my bullish thesis is a slow and steady grind from here. Not the Hyper bull market we were in the last 6 months.

3. You’ve commented that the jobless claims have resumed their downward trend. However, most recently we were a little too close to 400,000 for my comfort. It is going to be an ongoing struggle for the labor environment to improve. Again this is why I look for a much slower grind up in the market than we have experienced recently.

4. Michigan sentiment came in a little lighter than expected. And while you importantly pointed out that it is near its 3 year highs, that is exactly why I think we needed a small correction, a pause, and a slower resumption of the bull market.

5. As far as the Index of out performing names, lets keep in mind that:

a. I trade names that may not be in the S&P 500; although I know you, my esteemed colleague, believe that outside of the S&P nothing else matters.

b. Often a handful of stocks are sustaining an Index due to extremely strong moves up, while the rest of the names in an index suffer.

6. In response to the market not being overbought;  I think the move below certainly shows us that we cannot expect a market to be up 4% every month, and we were in some need of a pull back, which is what came to fruition.

7. And finally, if you read the blog below, you’ve questioned my probability of an extreme event occurring in Saudi Arabia. Well, I think we know the answer to that now. Sauid Arabia has demonstrated that they will fire on protestors. And clearly the show of force on the streets of their major cities implies that the Kingdom is nervous.

Now I am no soothsayer. And I do wish I had taken your opinions more seriously last year as I would have saved hundreds of thousands of dollars. You saw the sell off in April and May of last year and warned me. I probably would have made a great deal of money. I have happily paid attention ever since. So I only felt it appropriate to give you a heads up on my bearishness, 4 - 5 percent higher than where we are today.

In addition, you do have an uncanny ability to pick the year end close of the S&P. Pay attention members. Klein is looking for an end of year 1435 close. And although I have to look over my previous blogs, I believe I was looking for 1425.

As usual my good friend, great minds think alike.

Best Regards,

Jeremy Frommer


——————————Below is my previous response to Jeremy Klein’s own response which is bolded———————————-

My old friend, partner, renowned economist, and all around great guy, Jeremy Klein, provided a counter point to my most recent blog “Stock Market Commentary 2/25/2011 – My Advice”

In all fairness and in the interest of thoughtful debate, it is only appropriate to publish it as its own blog.

Three other important points about the distinguished Jeremy Klein

  1. He is a wine connoisseur
  2. He is known at Goldman Sachs as “The one that got away”
  3. He is the winner of HFL pick the year end close on the S&P 2010

His response follows:

Hedge Fund Live - The Battle of The Jeremy's


“To my old friend Jeremy Frommer,

As you know I hold your opinion in the highest regard, you are by far one of the wisest and talented individuals I know, that said, I am not sure I agree with your view. First, crude traded at $85 just prior to Libya. It sold off there, after Egypt calmed down and may do the same when Libya reaches a resolution assuming another major oil producing nation doesn’t fall. Ironically, you argue that consumer is worse off than people think which would imply demand for oil would decrease which would also bring crude back down below $90.

A revised reading on Q4 GDP is not all too relevant as it looks back at chunks of data 5 months old. New Home Sales was disappointing, but much of that was the snap back from the CA tax credit expiring last month. More importantly, the housing sector remains depressed which most everyone agrees with and is priced into market.

Jobless Claims has resumed its downtrend and Thursday’s print was without any seasonal adjustments, so it’s clean. Most

Hedge Fund Live - Frommer Vs Klein



importantly, you ignore the University Michigan number, which now sits on 3-year highs and clearly shows that consumer sentiment is important.

I am also not sure how stocks in general have underperformed the S&P 500 when the latter is an index average.

I am not sure the market is overbought let alone leveraged overbought. The TICK information and open interest in the futures actually imply managers are very nervous and looking to hedge aggressively and quickly at the first sign of trouble. Therefore, we will continue to get sharp 1-3 day sell off such as the one on Jan 28 and this week before grinding back higher as the managers scramble to cover. The increase we have seen in open interest on these sharp down days contradicts greatly what one would expect when coming off 2 1/2 year highs such that we saw panic selling through Thursday afternoon.

Hedge Fund Live - Economist vs Entrepreneur



Finally, what percentage would you put on Saudi Arabia falling into same malaise as Egypt, Libya, and Tunisia? I am no expert on Middle East, but given monarchy is liked much more than Gadaffi, proactively trying to reform, and the U.S. will do anything in its power to aid the nation in keeping pumps flowing, I would put it at 10%. Earnings on the SPX for 2012 are $110. I think that’s a bit of stretch and will use $105. If oil prices continue to rise, I will use $85 as an estimate as energy names (12% of index and rising) will see solid increases. I will use a 14x forward multiple for the former and a 13x for the latter given additional risk premium for geopolitical uncertainty. Using my aforementioned, yet understandably arbitrary, probabilities yield a year-end level of 1435.

Been tuning in a great deal lately, as Hedge Fund Live has become the top ten go to destinations for a real time look at the markets. I really enjoy the content.

I look forward to hearing your response.

All the Best

Jeremy Klein”

Well J. Klein, you will hear from me soon as I have quite a bit to say. For now I hope our members, readers and listeners enjoy our debate




Wednesday Market Expectations - It Has Begun

The Time Has Come - Hedge Fund Live

HedgeFundLive.com -

I am reposting my blog from yesterday as i believe “It has begun” , China is slowing down, Spain is downgraded and i believe we may see a print above 400,ooo on the jobless claims. Not good. strap in for another crazy day.

I have the biggest overnight short position I have had in nearly a month. I am very bearish. Odd, as I really was a perma bull. But I have always been the guy that saw things ahead of time. I have seen what is coming over the next couple of weeks for the last couple of months. We are on the verge. Take your money off the table; the risk reward is significantly in the hands of the bears.

The NASDAQ was not strong on Tuesday. It was weak. Did you not see the selling into every rally? Did you not see AAPL hit a wall? Did you not see NFLX struggle and AMZN sell into every rally?

Oil will rally overnight. It should. The Middle East is a mess. How naive can we be to believe that the Libyan civil war will be resolved in the near term? Are you deaf? Did you not hear that Saudi Arabia is outlawing peaceful protests? The day of rage is upon us. Oil will be trading at 110 next week.

The market is stuck in a fever pitch, soon to be broken by the realities that are staring us in the face. My aunt Bernice wants to know if I think Apple is cheap. Should she buy NFLX? Is JDSU going back to $300 a share? We have reached that insane moment that only occurs when the market nearly doubles inside of two years. We are in a frenzy. When you wake up from a euphoric dream, and reality sets in, depression is soon to follow. As the saying goes, “Plan A never works, Plan B almost never works. No one ever has a Plan C.” We are there and there is no plan C.

Anarchy is upon us. Greed and a blind eye have brought us here. We need to correct, to find ourselves back on the path. The New York Times front-page lead article “Rising Oil Prices Pose New Threat To U.S. Economy”-ignored. Page A14 “Prime Minister Urges Iraqis to Call Off Nationwide Protests”. Yes, we are in danger of reversing  years of effort as we begin preparations to pull out of Iraq in December. Newtown, CT, my home away from home is struggling with their local budget. They are lucky to be struggling, high profile municipalities are not struggling, they are doomed.

Win, lose, or draw, I have bet a significant amount on the outcome of Wednesday’s market. This is referred to as living on the edge. It is where I belong. It is where I want to be. One decision, to be able to judge yourself in a moment, comprehend self worth, is like no other high. It is reality. It is destiny. I no longer have the patience to review the reasons why I am bearish. I would rather discuss the psychology that allows one to make a bet. Not just a small bet. But a bet that can change the game. I understand the risk. The firm is up $52,000 on the month. Tomorrow we are either down $50,000 or up $200,000. That is the real life of a “Risk Taker”. It is not your normal life. It is abnormal. But it is a high like no other. It is a razor blade edge I walk. A reward far beyond every day expectations. The time for long winded blogs explaining my position are at an end. It is time to put up or shut up, and so I have. No more discussions about domestic issues. No more pontificating on geopolitical implications. I will write no more blogs till I have either won the battle or been forced to retreat. It has begun.

Tune In for my live broadcast at HedgeFundLive.com Mon - Fri 8am - 5pm, lets see how it all ends.

some strength-astro view-3/7-3/11

HedgeFundLIVE.com - I do a number of astrological studies and all of them point to a rally at least thru weds ,3/10.On fri pm ,neptune culminated a very positive cycle and that energy will still be in effect for this week. In addition mars will sextile pluto and that cycle should also supply some bullish support. That cycle culminates on tues,3/8 in the am.One of the studies is called a diurnal,which means of the day.when i put them together on an hourly basis they suggest that weds midday will be the high for the week,so buying dips and oversold conditions is the way to go,mon thru weds am.

mon-3/7 bullish ,especially after 2 pm

tues - 3/8 bullish, especially in the am,mixed in pm

weds-3/9 bullish-consistent thu the day

thurs- 3/10 bullish in the am neg in pm

fri-3/11 bearish especially in the pm


10 Crazy Fidel Castro Moments (Nuclear Missles, Mini Cows and Abolish Money)

HedgeFundLive- As he is an expiring “Player” on the world scene and Hedge Fund Live is committed to keeping you informed of “Players” comings and goings, here is a quick Fidel Castro update. The Wall Street Journal says that he has had a number of epiphanies. He has recently commented that Nuclear Missiles are a bad thing. He apparently would like to see the use of money obsolete on the island of Cuba. Rumor also has it that he hopes to sell coffee machines with an added bonus of genetically bred miniature cows so you can squeeze a mini utter in your kitchen for milk. Yes it may seem that he has lost his mind. But in truth these are just recent examples of his usual antics. He has had a number of embarrassing moments over the years, which were clear signs of a dictator gone mad. Here are candid photos of him in 10 of compromising positions.  Match the photos to the correct text description.  Responses posted at the bottom of this blog.




2. Fidel has a passion for cross dressing and makeup





9. Fidel trys to get Steve Jobs’s attention, wants to do Apple commercials






4. Fidel is too stoned and hung over to face the crowd






10. Castro caught flipping the bird at Condoleezza






3. Fidel reveals he wears tighty whities, says boxers dont hold it together for him






1. Fidel breaks wind and pisses off Hugo Chavez






7. Fidel shows off his new pecs






5. Fidel failing to strike fear in the hearts of his fellow Cubans, hopes a Batman stuntman might help his image






8. Fidel Caught at Scores, he was told, “no touching”, the manager said




6. Fidel loves the Austin Powers movies- he has photoshop posters in his villa




Responses: a-10 (Castro caught flipping the bird at Condoleezza); b-8 (Fidel caught at Scores, he was told, no touching the manager said); c-7 (Fidel shows off his new pecs); d-9 (Fidel trys to get Steve Jobs’s attention, wants to do Apple commercials); e-5 (Fidel failing to strike fear in the hearts of his fellow Cubans, hopes a Batman stuntman might help his image); f-4 (Fidel is too stoned and hung over to face the crowd); g-3 (Fidel reveals he wears tighty whities, says boxers dont hold it together for him); h-6 (Fidel loves the Austin Powers movies- he has photoshop posters in his villa); i- 2 (Fidel has a passion for cross dressing and makeup); j-1 (Fidel breaks wind and pisses off Hugo Chavez)

Check Out our live broadcast , Monday Through Friday at HedgeFundLive.com, just pick a channel.

I am at a loss, Both in my P&L as well as the market

I am at a loss, both in my P&L as well as my understanding of the market. Perhaps it is time for me to hang up my trading gear. Hand it over to the next generation who are not set in the ways of the past. I have lost too much money in the last week as a bear. AAPL is down 1.2% and the NASDQ is up 21 basis points. If I don’t see a reversal today in the overall market by the end of the day I will be flat all my positions and stay off the keys for a month. It is very difficult to accept as; I do not believe m bearish perspective is steeped in emotion. My arguments are logical. I am shocked that portfolio managers have not sold into what has been the best opening 45 days of a fiscal year that we have seen in many years. Logic no longer prevails. Greed is the defining emotion. I have tried to stomach through it. Yesterday the firm made $25,000. Today we are down $42,000 at 12:47pm. We are net short. We are on the verge of either making what would be an R3 pivot signal ling a reversal and one would expect the market to move down. We are also 1 handle from making a new high on the futures. I have bet big for my last time this month. On the astrological futures trading forecast, we have very bearish indicators for the remainder of the day. I did not see the upward moves in the futures today as convincing. There was no amplitude. I have not seen a V reversal in a very long time. Tomorrow many managers will be out as they begin a long weekend. There is real geopolitical risk out there. It is only logical that managers would take risk off into the end of the day. So as they say, the stars seem aligned, but every time I have felt that way, nothing has come to fruition. I am exhausted from fighting the tape. I was up significantly in the first 5 days of the month and now find myself down significantly as we are close to the final week. The time has arrived. By the end of this day I will no longer be in this position of uncertainty. I will be out of the market for the foreseeable future, or vindicated.

Trader Rehab Again - I take my book down to zero

Trader Therapy - I got screwed

I was wrong. The market did not pull in and my thesis did not play out as I expected it to. Perhaps the lesson is, a bull can’t morph into a bear. Perhaps the position was too big relative to the risk.  The most difficult rule a trader needs to live by, is never do anything today that jeopardizes your business tomorrow. As such while I have been looking for a pull back in the market for 2 weeks, and was able to maintain a relatively small loss in the face of a strong upward trending market, I could not survive Friday without breaking the aforementioned rule. As I entered the day Friday, it appeared as though all my patience would pay off. I had called right that Mubarak would not back down, and the market was selling off. And then an utter reversal, Mubarak changes his mind less than 24hrs later. This is what I have referred to as a complete exogenous shock. Unfortunately for me, who was quite bearish, this took me by total surprise and to a threshold of pain that I would endure no further. I did what all career traders do under those circumstances; I liquidated all positions and cut down to zero. When you are wrong as a trader and have reached your pain limit, continued misperception that you will be right and further losses are not acceptable, even if the very next day you would have been absolutely correct. While I took a significant trading loss on Friday, my firm remains strong and can begin its battle back to make up for Friday’s trading loss. And while it may take time to make it back as the risk will be paired down significantly, I will find myself in what I refer to as trader rehab. I will step away from the keys for a week or two. When I return, I will trade small as I attempt to regain my confidence.  Hopefully the other traders will rise to the occasion and start our path back toward success. I will focus on the business as a whole. The business on a whole is thriving. Its success far exceeds the trading loss. Trading losses can be recovered relatively quickly. Business success cannot afford to give ground. When you are an entrepreneur like myself, there is an inner force that keeps you moving forward in the face of adversity. You do not look past with regret, you look forward with newfound knowledge. A survivor in this business always rises to the occasion, always suffers setbacks and always rises again. I have suffered through many business and personal losses and celebrated numerous personal, trading and business triumphs. That has been my way for my entire career, my entire life. And probably the balance of what I hope will be a lengthy journey. I would venture to say, you the reader have had similar experiences. What defines us all, is “if and how we move forward”. The best way to see how my journey continues is to tune into hedgefundlive.com

Friday Market Expectations - “I still havent found what i am looking for”

Jeremy Frommer and Bono - I told him i still haven't found what i am looking for

To quote my good friend Bono, “I still haven’t found what I am looking for.” But I feel like I am getting close. Look, the morning seemed to lay out as I expected. Then we got the Mubarak spike. Names are completely disconnected from the indices. Correlations are completely out of whack. It is utterly illogical that the markets continue to maintain these lofty levels with names like CSCO down 14 percent. But it is getting very difficult to fight the tape. Ironically as we have maintained a massive short position and have been squeezed every day, but we have weathered the storm. Tomorrow is D-day. What we saw tonight with Mubarak’s speech was a sham. Nothing has changed; this will lead to further chaos. Instead of telling the people he was going to stay through September, perhaps he should have told them he will restore the internet and give them back their Facebook.

The market is completely misunderstanding the risks at hand. I expect a significant overnight drop in the futures because of the continued blind eye behavior exhibited today by the market. I attach a 2/3 probability to a test of the 1308 low; I certainly expect to see 1311.

The intraday range in the futures today was 12 handles, the average has been running closer to 15 – 18 having been as low as 4 -5 handles a couple of weeks back. The expanding range is an indication of a top.

More importantly, the extreme intraday swing of independent stocks is even more worrisome. Our government has become an embarrassment on the foreign affairs front. Bank of America closed on its lows. Commodity stocks rallied as inflation fears grow. Inflation contracts equity multiples. WYNN reported earnings that crushed expectation and the stock is trading lower. AAPL dropped as much as 8 points on a simple internet story regarding the lines for the

Aunt Beverly asked me "Sweetie do you think I should add to my CSCO position, it looks cheap?". OY VEY

new Verizon iPhone being a little smaller than anticipated.
This has become a bubble, earlier in the week I blogged that I expected a 3 – 4% type pullback. My opinion is shifting. I am now concerned that we will see an actual full blow correction of closer to 10%. This is very disturbing to me, as I believe it will directly impact consumer confidence and sidetrack what seems to be a slow and steady recovery.
Aunt Beverly wants to know if she should add to her CSCO position.

Thursday Market Expectations - Reasons why the market doesn’t go down, for now.

NFLX - "Is it time to buy?"

Is this the beginning of the small correction I have been looking for?  Probably, but given the fight the bulls put up yesterday, they are not going to back off quietly. One might argue, buy the dips but sell the rallies more aggressively. I do not have the patience for that. I have too many other things to focus on. Either I am right and we will test 1300 in the coming days or I am wrong and we are in a fever driven hyper bull cycle that refuses to be broken.

But why? What are the positive catalysts? An improving economy. Yes things are slowly getting better. Perhaps you believe that there is still a great deal of cash to be put to work. I am not sure I agree with that one. Last I heard hedge funds were at near pre financial crisis levels of leverage and no matter how hard I try I cannot seem to get my credit card bills paid down, it is something that my wife and I are forever battling over. So near term, the catalyst for moving up is simply greed. “It worked yesterday, so I will try again today” seems to be the motto for the bulls.

As I write this it is 7:45am on Thursday and while futures indicate a negative opening on the heals of CSCO’s earnings (CSCO is trading down 10%) AKAM’s earnings (AKAM is trading down11%) TQNT’s earnings (TQNT is trading down 14%), I am amazed that the futures are not down more significantly. We await a weekly jobless claim number that should not move the needle. So here is my thesis, people have very short memories. I for one do not remember what I had for dinner when I came home last night, though I do remember polishing off a bottle of cabernet at the wine bar with a buddy, before I headed home for dinner. For some reason I think it was lasagna, but I really don’t remember. We as a species have short memories. Our memories are even shorter when it comes to recalling pain. Pain is the memory we most often repress, very logical. The traders, investors and financial spectators of the stock market, the greatest arena since the Roman Coliseum have repressed their fear, they trade with abandon as they rip the futures up 5 handles in the last 5 seconds of a day. They ignore the fact that we have not even tested the breakout “psychological levels” as support.

But I believe the time is upon us. The catalysts are not to be ignored. As I said earlier this correction will be a battle between two strong opposing forces. Leverage vs. Common sense. Fear vs. Greed. And finally a battle between the lessons of history vs. a brave new world where there is a new playbook, and perhaps my copy got lost in the mail.

Negative catalysts continue to be those I mentioned in yesterday’s Market Expectation blog. But let me add a few more. Unexpected developments in Ireland and Portugal. Forex spread gouging by major institutions. Bernanke under further attack over QE2. Our municipal bond infrastructure in jeopardy as the ratings agencies were once again, late to the game. I believe yesterday was the first right-handed body blow to the feverish bulls. Today will be a follow up cross to the left side of the jaw, the type where you hear a slight crunch, and tomorrow will be a right hook that will for the first time in months put raging bull to the mat, even if it is short-lived, at least he will remember that lost feeling of pain and markets will have an opportunity to normalize.

By the way my Aunt Beverly called me again last night, she wanted to know if i thought NFLX was cheap, needless to say i will be shorting NFLX.

Tuesday Market Expectations, How To Trade An Egyptian Million Man March


Odd that in my blog yesterday I compared what was going on in Egypt to the civil rights movement and the next day they announce a million man march. As I said yesterday, the place to be is the NASDQ.  I am expecting the S&P to drift a bit higher as things work themselves out in Egypt. Perhaps the 1292 + level. But any quick attempt at 1300 - 1307 should be met with selling. Without a week or two of consolidation I cannot have confidence in another leg up driven by fast money. The weekend was filled with talking heads predicting a 5 to 10% correction. Where did they all go? Why doesn’t CNBC call them back and ask them “What they have to say now?” I actually expected today to be a bit quieter. We did the down 5 handles thing pre-dawn and from there drifted up. But I did not expect the NASDQ to be as strong. I continue to look upon the movement in Egypt as a positive process. The military is clearly not taking authoritative action, and I see a reasonable probability that they take the side of the crowd and bring a quick end to the Mubarak regime. If the demonstrations continue to remain peaceful, the market will move higher. The vacuum of information will be replaced by something more powerful that can move markets. HOPE. Real hope that we are at a positive tipping point in middle east geo-political history will drive the S&P market through 1300. Here is a simple rule for how to play the day; The more things remain quiet, the more things feel stable…continue to add to you high beta long positions and short DIA – The Dow and perhaps some S&P futures as a hedge against exogenous shock. I am long YHOO , BBY , CREE , CTXS , AKAM ADBE , IMAX , STX , GME , LULU QCOM as well as Home Builders and the game makers TTWO , ATVI , ERTS. I am short DIA and S&P future. Tune into our broadcast tomorrow and I will let you know how it turns out for me. HEDGEFUNDLIVE.COM

Monday Market Expectations, How to trade an Egyptian crisis and the M.A.S.S. Minimizing of America’s Superpower Status

Egyptian Stock Market - "The looters took our flat screens!!!!!!"

As we move closer to the end of the weekend, my expectations of tomorrows’ trading activity begins to form. As always, it is more of an intellectual exercise that helps keeps my Socratic Trading Mind sharp. In addition it helps me prepare to contribute to the collective thought process on the HedgeFundLive.com trading desk, we have over 20 million dollars of open positions. But I believe we are well structured for the day ahead. Egypt is still a mess. I am optimistic that we are seeing the end of a totalitarian regime, and the beginning of real Middle East democracy, but this will take some time to sort out and puts the market at risk to exogenous shocks. Example would be a significantly more lethal response by a sill Mubarak controlled Military on its people; call it Egypt’s Tiananmen Square. Example would be Hammas thinking this is a good time to attack Israel; they are always so impeccable with their timing, or perhaps our Foreign Affairs novice President continues to remain basically silent on what is one of the most seminal events of democratic evolution. The same democracy we are spending billions on in Iraq and Afghanistan. his continuing silence is an affirmation of what I call the ongoing

Egyptian Trading - The Stock Market Before

M.A.S.S. Minimizing of America’s Superpower Status. None of this would breed confidence in a market that has only recently gained its footing from the realization that much of Europe is theoretically bankrupt. There will be much grief in the coming weeks, as innocent people will suffer for macro change. As Mohandas Gandhi said “What difference does it make to the dead, the orphans, and the homeless, whether the mad destruction is wrought under the name of totalitarianism or the holy name of liberty or democracy?”

Barring an immediate positive change in Egypt, we should sell off a little more into month end and then remain range bound for a while. The Market loathes a vacuum of information. Even peaceful resolutions in Egypt, will still not satisfy the market. It is my opinion that this event is just the beginning. Similar to the Civil Right Movement, where Martin Luther King began a revolution that is still being fought every day in this country. Democracy will spread in the Middle East. Syria and Jordan are truly at risk. Saudi Arabia seems to be the chosen destination for retiring kings. In many ways Iran is probably the next most logical Hot Spot. If this is not such a seminal moment, why are the Chinese censoring searches on Egypt on their Internet? I think the range bound trading will keep us under 1300 on the S&P cash until we get another set of positive economic indicators from our own government. This should happen in approximately 3 – 5 weeks, a reasonable time frame to expect some progress in the Middle East.

Egyptian Trading - The Stock Market - AFTER

I will look for a strong dash through the 1300 level on the S&P Resistance will become support for what should be a strong year in the markets. Until then “Trade the Day you are given”. As Patanjali teaches us, “Stay present”. That said I am quite optimistic on the NASDQ and particular the Technology spaces as well as Home Builders and Biotech. I will continue to focus on those names to the upside. I will look for Take Over speculation names. I will be spending a great deal of time analyzing options strategies, as volatility will definitely be seeping into the market. Finally I will be looking to buy names that I ultimately believe will benefit the most from a changing landscape in Egypt. I will be shorting the DIA as a hedge, more than the S&P. Buying S&P puts is becoming a favorite hedge for me. I am not particularly optimistic on the Banks at this point and see them as perhaps dead money, though there are a number of regional banks I like. Mostly I will look to short high Flyer non-tech names such as RCL, in fact I might look to short the whole cruise line space. I really don’t like cruises. Commodities may be interesting to trade intraday volatility, but I will be staying away from overnighting them. We are living through monumental times. DON’T FORGET THAT!!  And trade like you understand it.