I am now going to be weighing more heavily on the short side of the book-building; on that side from here (920) to S&P 975 if necessary. It "feels" like late February but in inverse - no one wants to be short (long back then) and anyone who thinks about it is an idiot - as the market only goes in one direction (down then, up now).
I have two specific stocks in the solar space: DayStar Technologies (DSTI), and Ascent Solar Technologies (ASTI), that when they run almost always mark the height of insanity - both are exploding now. As countless 2nd and 3rd tier auto suppliers go out of business (government is supporting the 1st tier) this summer and fall, restaurants and shops around those suppliers die, and auto dealerships close their doors - we'll still have our 0% car financing, $6000 government supported Chrysler rebates, and 4.7% no money down FHA loans to get us through. So don't despair - GDP should explode higher on these figures as it did in Q2 2008 with a tiny $170B Bush rebate... that's peanuts to what we are going to have now. Countless unemployed will enjoy driving around listening to the stock market racing up on their way to the mall.. or to the grocery store - preferably Whole Food Markets (WFMI) of course.
I could be a few hours, days or weeks early, but at this pace we literally will reach all time highs in a month. Every 10 S&P 500 points from here I will layer in another, larger batch of shorts. I will say "uncle" when we cross all time highs (north of S&P 1400) which should come by Father's day at current pace. The market is 38% *straight* off the low. We talked about how the rubber band, reversion to mean trade would happen when the S&P was at an all time divergence of 40% from the 200 day moving average. We are now about 5% below the 200 day. In just over 8 weeks.
Wednesday night, Cisco (CSCO) reported -they missed on revenue, but beat on the bottom line. They cut a lot of workers. They see "stabilization". This will "shock" people in delight. Maybe we can rally 28 more days on this same news item.
Friday we will only lose 575,000 jobs, although we will revise upward the numbers the bulls were giddy about (and took as gospel) 30 days ago. This will "shock" people in delight. And then in 30 days, we will revise upward the 575,000. If we can rally 28 more days off the same news, so be it.
Tomorrow, we will have the bank stress test results and they will "shock" people in delight... oh wait, they were all leaked out today. That's ok, we'll officially be "shocked" tomorrow.
Please go fill up your gas tonight on the way home, and please ring the bell and tell your neighbors of the $3 gas coming in a few weeks and to enjoy it as our consumer discretionary recovery will be stoked by $3 gas.
p.s. I threw away half my Morgan Stanley China A Shares Fund (CAF) into the bull's mouth here.
Disclosure: Long Morgan Stanley China A Shares Fund; no personal position