Wells Fargo Wagons Run Roughshod Over Stress Test

Greetings from New York, where Wells Fargo (WFC) was up yesterday on reports the bank would be forced to raise more money after failing the stress test.

This raises a rather obvious question: Woudn’t we all be better off if the stress test was allowed to gently fade into the forgotten past, like Furbies and the metric system? Recall, May 4 (“yesterday” for those not keeping track at home) was the day we were to "get the results” of the utterly fake "stress test" of banks - which were, at the time, already failing under the stress of early ‘09). Presumably, Wells failed. This would be disquieting to myself and the other WFC longs, were it not for the 16% gains we were making on our Wells shares.

Am I as long Wells as I should be? Well, no. Had I anticipated a 16% gain today, I’d be 150% long, and would have sold the open and taken the rest of the year working on my life-long dream of becoming a jazz dancer. Alas, what I did instead is take off 10% and simply practice my “jazz hands.” Baby steps, Minyans. Baby steps, and Bob Fosse.

In news in New York, Chicago and every other part of the trading (and non-trading) world:
 

• Las Vegas Sands (LVS) is up a simply goofy 17%, yet somehow makes sense. Breaking that contradiction into logical parts, the move is, near as I can tell, virtually the only thing driving Sands, and the rest of the casino moves higher are dependent upon results over the next 2 days. Those of you keeping track of my moves in the name understand that I’m fairly small in Sands, totally out of Wynn (WYNN) and deeply skeptical of Sands announcing anything “deserving” of 110% one-month move.
  
  
• Do I wish I’d stayed long my entire casino basket? The exact same way I wish I was still long MGM Grand (MGM) and, for that matter, Wells Fargo and everything else I’ve taken partial profits in over the last month. Where I’m from, we don’t haphazardly set time limits on tests of entire systems, taunt Mr. Market or pound our chests in celebrations of our own brilliance. We play the game, as best we can by the rules we’ve been taught. That means trim gains.
  
  
• As is, I’m long Goldman Sachs (GS), General Electric (GE) and, because we have blasted from the lows to Guy Adami’s long-stated target of 900 on the S&P 500, more of the SDS double short ETF with a tight, tight stop (read: SPX: 915). I love a counter-trend trade with a tight stop.
  
  
• Speaking of tight stops, suffice it to say, I was in Vegas much too early to get my money down on Manny Pacquiao over Ricky Hatton by KO. Boxing isn’t a game of who you’d want to have a beer with; it’s a game of who has the best instincts, hardest punch and best plan. Game, set, match; Pacquio. For what it’s worth, the casinos love it when the crowd favorite, and underdog, gets starched early. Gets folks to the tables early and means they aren’t paying low odds in the sports book. Is that worth 17%? Ummm... No. No, it’s not.