TCM Notes : 5/1/09

• Higher volumes out of the indices today. IBD counted Thursday's action as distribution day 4 for the DJIA since it's March 12 follow through day. SP500 still stands at 2 with the Nasdaq remaining with 1. Other than that it was the best 2 months in 34 years. Nasdaq was up 12.4% for the month.
• And the award for news story that resembles the beating of a dead horse......Chrysler filed for chapter 11 today. And Obama scolded the hedge funds that would not take whatever crap deal they were offering. What the hell were these funds doing buying Chrysler paper in the first place? With a market that is huge and global in it's reach.......you buy Chrysler debt? What were they thinking? And Bob Nardelli? Go away. How much shareholder wealth can you damage. Take your HD golden parachute and go away. Take John Thain and a bunch of others with you!
• FLU PIG is a category 5 now. Wait a second. Maybe it's a level 5? Whatever it's at if it were an equity it would be considered "gone parabolic" at this point in time. And like all strong fads you just want to short it. Nothing like being in the host city of a world championship bbq festival when there is a potential pandemic popping off around the globe. You couldn't write a better story.
• SQNM is another example of why we won't play with biotechs. Down 75.79% today. This one was at least fundamental, and a little fraudulent. Apparently some staffers "mishandled the testing results." As you can imagine the class action lawyers have begun to salivate. Again, these little biotechs while fast and sexy are lottery tickets and can leave you standing there with your pockets turned inside out in the click of a mouse.
• Natty gas inventories are up 34% YoY. I accredit this to the obvious reduction in industrial output, but the new drilling methods have really changed the game for natty gas exploration. Think fracture stimulation. That market topped out exactly when Aubrey Mclendon of CHK uttered the words, "we are sitting on an ocean of natural gas."
• BYD saw call buying today on top of the strength shown in other casino names on the heels of the MGM news.
• Nasdaq and Russell 2000 about to either fail or take out the 200dma. This would put that level in play for all the others who aren't currently there. And for those that are claiming overbought levels. Only 30% of equities are above their 200dma. The market topped out well above 70% based on that metric. So we really could see a similar situation much like 1938. A 62% rally off the lows. We'll see soon enough.
• Allen Stanford trying to turn himself in before he is formerly charged is the craziest thing I've heard. One theory I heard is his lawyer was trying to do this so when it does happen he will be considered a non-flight risk. Innocent until proven guilty, but that's a shady move. I think it was Harry Markopolis that tipped the SEC to this case. I remember in his testimony to the senate he mentioned that he could name a few other "baby Madoff's" for them. After that there was a day long meeting with him and the SEC. A little bit later, and we have the Stanford case. Coincidence? I think not.
• SPY hit the 88.40 target and remains above it's weekly pivot of 85.57. Being a buyer of dips into the 9dma and 20dma is still the most prudent course action until proven wrong.