Ok so maybe this isn’t exactly what he’s doing but i thought this was a funny topic to cover. A very successful small time hedge fund manager by the name of Andrew Lahde threw in the towel just recently after having a 1000% return on his fund in 2007 betting against the mortage sub primes using derivatives.

He wrote a letter on the 17th to his clients stating his reasoning’s for dropping out of the business…. I.e. i hate the hedge fund industry, made some coin, not managing anyone’s money anymore, don’t bother me, i’m fuckin outa here… basically it what it says.

Then interestingly enough, his last paragraph of the letter he goes into the importance of hemp and how it was used to create the first American flag, the constitution, and how stupid it is that marijuana is illegal? HAHA what a weird what to end your letter of departure. He’s obviously a big stoner and is pissed that he can’t take his lunch break and take some bong rips in the cafeteria. If you care about weed being illegal then your basically pinned as a pot head. I for one hate the stuff, sure i toked up all the time in highschool but learned to hate it as i got older, it makes me paranoid as hell! So i could care less if its illegal. In fact i’m glad it is, i think it makes you lazy, unmotivated, dumb, and makes you think you come up with really good ideas when your high when in fact when im standing here listening to you sober….. your ideas are fuckin retarded…for the most part… referring to my stoner friends haha…

Anyways heres the letter to his investors. Its actually a good one i just thought it was interesting how he threw his thoughts on how dumb he thought it was that weed is illegal into it and he does make some good points. Weed really isn’t that bad. I’d have to say 70% of the people i know smoke the swedish cheeba. Paris loves tokin.

So todays rally was huge, well, the mother of all rallies in fact. The Dow Jones clean sweeped the previous record, which was 603 points i think i remember them saying on CNBC today, and closed up a whopping 936 points! This was also the largest % gain since 1932 and the 5th largest % gain in the history of the stock market. This is by far one of the craziest times in the stock market that you will witness in our life time. We’re gonna look back at this time in 20 years and say remember when we would see 500 point days in the Dow as if it was normal, dow futures would rally and fall near 200 points after market hours every session, and we would break new records just about every week the largest rallies and declines in a single day? This truly is a unique time that we are in for the stock market. Even though it has been a rough trading environment, it will be fun to talk about later in life for memories and stories to tell.

The most important thing is that we come out of this unscaved and prepared to make the right trades as they arise. Don’t force any stupid trades, stay conservative in this volatile market, sure you can place big bets and win big but with the big moves we are seeing these days your gonna lose big trying to gamble this market. And i don’t want too see you have to give up on trading because you got greedy and lost all your money. Diversify!

In any regards, it was nice too see some green today. But it doesn’t really matter what direction these stocks are heading we can day trade either long or short. The fact remains that the current market conditions are still extremly volatile, thus still highly dangerous. I mean shit the dow rallied 1000 points today, the market is still highly unstable and unpredictable for holding anything trying to swing trade. Day trading and cash remains King.

Theres a new sherrif in town.. But looks like hes a little out numbered hehe.

This was a funny email i got yesterday about the “real” underlying definitions of stock market terms.

Enjoy

CEO –Chief Embezzlement Officer.
CFO– Corporate Fraud Officer.
BULL MARKET — A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET — A 6 to18 month period when the kids get no allowance, the wife gets no jewelry.
VALUE INVESTING — The art of buying low and selling lower.
P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing.
BROKER — What my broker has made me.
STANDARD & POOR — Your life in a nutshell.
STOCK ANALYST — Idiot who just downgraded your stock.
STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER — A guy whose phone has been disconnected.
MARKET CORRECTION — The day after you buy stocks.
CASH FLOW– The movement your money makes as it disappears down the toilet.
YAHOO — What you yell after selling it to some poor sucker for $240 per share.
WINDOWS — What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR — Past year investor who’s now locked up in a nuthouse.
PROFIT — An archaic word no longer in use.

WIth todays uplift of the short ban the dow plummeted another 678 points on continued fear and a huge downfall of financial stocks with heavy short pressure. The 31% drop in GM to its 58 year low has also weighed on the stock market.

Technically there is a a huge amount of bearish momentum with no stabilization in plane sight as the markets keep getting get slammed. From this point where we are are right now i won’t be surprised to see the DOW continue to Free fall until the next support level which is in the range of 7200 - 7800 wheres its very possible we could see some stabilization and a strong rebound in the market at least in the short term. Long term no one knows and im certainly no economists trying to predict the future. Just a short term trader who follows short term momentum.  C’yall Friday.

Technical Analysis :

Looking at the long term, and i mean long term going back nearly 20 years and using a monthly scale long term, chart of the DOW we can see that the trend still remains bullish yet is on the verge of a breakdown which could send the Dow to the low 7000’s area if we don’t see a bounce off of this current 9500-10k area based on technical analysis.

Unfortunately there’s no fundamental outlook reasons to back our technical’s in hope of a possible rebound from this area as the bailout  news did nothing but slam the market down. Investor confidence is dull as i share the same lack of confidence in trading any company beyond a day trade currently as the market volatility is highly unpredictable. Jim Cramer even went on Live television today and stated that you should get out of the stock market if your using any money that you might need in the next 5 years.

Technical Analysis Reasons to believe that market “may” rebound from here:

1.Slow Stochastics have never been this low on the 20 year monthly chart since 1990. Market is heavily oversold.

2. Price is at 3rd point of long term ascending trendline. Thus, this is an area where lots of buyers may come in from a technical standpoint.

3. Price is at a significant whole # of 10k which has served as support and resistance since 1999. Price dipped below today but can easily rebound from here back above 10k given the current markets volatility.

4. price is sitting at the 61.8% resistance line. on the monthly chart stocks rebounded at 38.2% as well as 50% fibbonaci levels. Yet only to continue the down trend later.

So technically theres some strong evidence that the market could rebound from here but with so much negative news coming out every week these technical signals could be crushed in a heart beat as we have witnessed latley. I mean shit the Dow Dropped as far as 800 points today…. What kind of market is this that were in right now? Its chaotic and thats why there is so much fear and lack of confidence. Its possible that we could see a rebound from here but i won’t be surprised the least bit to see a short term rally which in turn leads to a breakdown of sustaining prices below $10k on the dow. Which in turn means no strong price supports levels until the low 7000’s.