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Monday Morning Quarterback: The Rock and Roll!


Thus far, attempts to keep the market from rolling back have fallen short.


In Greek mythology, Sisyphus was cursed to roll a huge boulder up a hill, only to watch it roll down again, and to repeat his effort for all eternity.

For modern day market participants, the task feels much the same.

Let's review some of the more notable attempts to keep the market rock from rolling over.

The Invisible Hand quietly operated behind the scenes for many years.

The government sponsored take-under of Bear Stearns attempted to stem the tidal wave of supply.

We said it was akin to trying to plug a financial dike that continued to spring holes.

In September-following our warning of an impending car crash or cancer and long after we first threw a flag-Hank tossed a Hail Mary and assumed control of Fannie Mae (FNM) and Freddie Mac (FRE).

Shortly after, Lehman Brothers, Washington Mutual and AIG (AIG) played Russian Roulette for the Financial Set as the rest of us entered The Age of Austerity.

Martial Law we declared for the Markets
and we found ourselves Back in the U.S.S.A. wondering if Mickey Mantle Would Pay our Rent.

There was Shock and Awe
as we Fought the Good Fight and resisted Seduction and Corruption on the road to Redemption.

We counted the days until the election as we searched for Truth and Consequence.

We Looked Back and Cast An Eye Forward as we monitored Our Pushback Society and the New World Order.

We wondered whether the Banking Industry Would Survive and what The Future of Wall Street would look like as we championed the necessity of Financial Staying Power.

It wasn't easy but we played the hand we were dealt and kept things in perspective.

There was much to be thankful for-Gratitude is Latitude-and we did our part to Support the Important Stuff in The Name of Love while remembering Things We've Learned.

The Here and Now

Last week, while observing Signs of the Times, we asked How The Market Would React to Nationalization of select banks such as Citigroup (C) and Bank America (BAC). The imagery offered was that of injured players at center court-once they were carted off, could the game resume to "Run L.A." or would the crowd stand stunned unable to cheer?

Earlier this month, I opined we should prepare for a Monster Move in the Market. I traded the banks from the long side at the time, catching 26% six-session sprints and 85% three-day pops. Better lucky than smart. Heck, better disciplined than both.

Entering last week, I communicated that I was no longer buying dips in the financial complex as the notion of nationalization-temporary or otherwise-gained traction in my crowded keppe. There were other, less crowded situations without significant headline risk and I wanted to look away from that complex.

While I remain respectful of further slippage in the marketplace-I'm keeping a watchful eye on Eastern Europe-I shifted my stylistic stance into the heat of Friday's downside meat. As communicated in real-time on the Buzz & Banter:

"Whereas I've been in "hit it to quit it and make it to take it" mode for some time, I've scaled into some exposure as a function of price. That doesn't make it right but it sure as sheet makes it honest.

This is in my trading bucket, mostly in March and April paper and peppered across tech, retail and energy. I also have a small snivlet of gold puts (my risk is $3) and they're all pure trades as we attempt to collect shekels on the path towards our ultimate destination."

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