NASDAQ and financials will take us down...

NASDAQ put in a doji for the weekly. It was much weaker than the S&P on this last leg up, only rehitting those highs intraday before falling back. Whereas the S&P closed well above the Sept highs several days now. Interestingly, whether you love him or hate him, Jim Cramer thinks the I-Phone sales will come in light from Apple and they will get hit. I have been speculating about the same myself after seeing RIMM and Nokia. INTC is already below pre-announcement levels and other techs are weak as well. If Apple gets hit, watch out NASDAQ. MSFT also has made some statement, such as Balmer indicating that IT consulting was weak, that suggest they will disappoint. I think tech is going down next week. Finacials are also going down in my opinion. They got a shot in the arm from JPM, but given its best in breed nature, it wasn't really appropriate for all of the other financials to have rallied along side it. That was well displayed by Citi and BAC. Citi beat, but not really. The loan loss provisions at Citi were totally inadequate and they will suffer for it in the future, they should have taken a bigger hit now but they wanted to report strong. Analysts were not fooled however. BAC with Ken Lewis facing down the SEC couldn't afford to play games like Citigroup. They did at least report an honest quarter, but certainly not a good one. Now we have regionals. WFC could be good, but that's a tough call. I think MS will have issues. MS has missed the last 2 quarters and they have more commercial real estate exposure, I wouldn't assume that because I-banking was good at GS/JPM that MS will knock it out of the park. BB&T reports on Monday morning and should give us a look at the regionals. According to earningswhisper.com they will beat by .02. That could be taken as a disappointment, but it will really depend on how their loan losses and their overall loan book appears. Last time management stated they did not anticipate brutal a loss rate as they were seeing. Of course if we see similar commentary this time, watch out BBT and watch out KRE/regionals. Others like KEY, RF, USB will be reporting soon and I don't expect anything petty out of them. JPM was the time for financials to shine. I think they are probably toast now for a little while. So what does it all mean? It basically means to me that today the market would have been crushed if it were not for energy. The rapid rise in crude sent some of the energy stocks higher. This partially explains the divergence between the NASDAQ and S&P. If crude stalls out or if the dollar starts a little rebound, this rally will be over. I think it the upward momentum is probably done and we see some downside at least for next week regardless, but how much will depend on OIH/XLE. If they stand firm it will reduce the downside potential.

We should short the bounce on monday... The results will drag everything down. The banks have way too much credit losses. Citi's profits are due to sale of assets(one time off) not core business assets. Credit losses are going to increase if unemployments continues to stay at this levels..

I'm sort of in a gap down Monday state of mind personally... unless BB&T knocks it out of the park, which seems unlikely.

I guess that requires some explaination... We were down today, but not by a hell of alot, probably somewhat supported by OPEX. Mr Topstep (an S&P pit trader on twitter/Youtube who has been pretty accurate) expressed the view today that the market looks "frosty" up here and thinks we will move down next week, as do many of his big accounts (GS is one). I could also see some negative reinforcement in international markets. Not so sure about Europe as they likely got hit somewhat by our results as there is an overlap between our markets, but Sunday night Asia could see some downside as they get the chance to react to BAC/GE. Depending on how aggressive Asian downside might be, you could see downside in Asia as well. I could also see some dollar support as... technical rebound is likely against some of the commodity currencies, including the Canadian dollar which is a dxy component. Dollar Yen seems to be firming up in the dollar's favor as well. Pound might see some give back after the massive move over the last few days. Euro might be a tougher nut to crack though. But ya, for those reasons I could see a gap down Monday.

We should short the bounce on monday...

The results will drag everything down.

The banks have way too much credit losses.

Citi's profits are due to sale of assets(one time off) not core business assets.

Credit losses are going to increase if unemployments continues to stay at this levels..

But Remember----The Fed and banks know all this and will protect,spin and do everything
to keep the market from crashing. Do not short now, it is too early----wait until the vix gets
below 15---that is when everyone (bears included) will say the "bear market is dead".

There is no top (look at any chart)---the bottom is 0.

I'll Short only if we get a bounce. I am pretty sure we will get a bounce on either monday or tue or wed. before thing come right down.

NDX appears to have put in a double top with an exhaustion gap.

http://2.bp.blogspot...austion gap.gif

Bought faz on the close, my indicators on hourly are on my zero line, if it breaks a major selloff is on the way.

But Remember----The Fed and banks know all this and will protect,spin and do everything to keep the market from crashing. Who is worried about a crash right here? up at the highs? crashes occur from much weakened positions and low points, check prior years charts. We haven't even gone down yet...lets start with a 4-7% pullback and see how that acts.

I never said anything about a crash... but some let up in this rally I think would be acceptable to the powers that be to avoid the charge of "asset bubbles." Interestingly Barrons made this very charge this weekend.