Economic history is a never-ending series of falsehoods and lies, not truths. It represents that path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.
-George Soros

The market can remain irrational longer than you can remain solvent.
-John Maynard Keynes

…That said, we continue to believe that we will ultimately be successful in our investment in Target.
-William A. Ackman

Hedge Fund Lets Investors Withdraw What is Left.

Peace

I can just feel the tension. All eyes are on the new Treasury Secretary Timothy Geithner.

Here at Trade the Picture, I attempt not to over analyze the analysis. The price action says it all. Below is a weekly chart of the S&P 500 futures. The tale of the tape this week will be one of three theme songs.

1) Breaking Up Is Hard To Do

The market will defy the voting mechanism and rally. This one will be difficult, but not impossible. After all, breaking up is hard to do.

2) Trapped In a Box

Nothing like some old school No Doubt with a few friends and a billiard table.

This is a more likely scenario. This scenario will frustrate the most people. Don’t ever rule it out. The market will continue, As Nicolas Darvas might describe it, to be trapped in a box.

3) Breakdown

Nothing like some classic Tom Petty.

This one will be the easiest. Down is still the path of least resistance.

Breaking down below the green line will take us right to the blue line. If this scenario plays out, my downside insurance will expand in value quickly and seismically.

Peace

Consolidation

Can an intelligence create another intelligence more intelligent than itself?
-Ray Kurzweill
The Age of Spiritual Machines

1) I bought Bank of America puts for 22 cents. They are now bidding 68 cents. My strike price is 4. I think I’ll sell these for about $3 by sometime next week. Gambler’s ruin has ensued. Where is the analyst that upgraded Merrill Lynch back in September? When Bank of America (BAC) bought Merrill Lynch, they sealed their fate. Natures Math does not lie. It cannot.

2) Prologis (PLD) should be below $1 by the third Friday in April. The tipping point has tipped. The common equity will be wiped away. Nature’s math is irrefutable.

3) A great friend had a breakthrough the other day. He said:

If it is ‘too good to be true’ and it is true, then it’s REALLY good.

Things that are ‘too good to be true’ often are true. The difference is whether you believe or not.

Peace

Luke: I can’t believe it.Yoda: That is why you fail.

The Headline:

ProLogis (PLD, $9.45, -$0.56, -5.59%) said it hadn’t decided whether to deliver its quarterly dividend payment in cash or partially in stock. The warehouse developer had cut the dividend in November to a $1 annual rate from $2.28.

The hilarity of it all. The shell game has come to an end. Now, they may pull the same thing that Vornado Realty (VNO) did. Should we pay less than we said we would or should we pay less than we said we would?

I’ll try to buy more puts tomorrow. This is fun.

Peace

a sinking ship

The techniques I developed for studying turbulence, like weather, also apply to the stock market.
-Benoit Mandelbrot

There is a light, that shines
special for you, and me
-Common

The market gave a classic little tease to the upside yesterday. Today we gave it back. The selling was intense today. More intense than the buying yesterday. I have a target on the S&P futures of 675. We’ll call 675 the next yellow light. It may get stopped there, or it may speed right through. No matter the outcome, it is going to the intersection. Calling intersection 675. We will get to you. The calculations are correct. Nature’s math is for real. Tease it up all you want. The path to the intersection isn’t a straight line. We will get there, though. My navigation system rarely steers me wrong.

Peace

Just Rollin down to 675