Market Wrapup

(Click to enlarge)

As you see, there was alot of red across the board today; however, tech stood out strong. For the day, I ended up 2% which is good but some of the technical plays are falling apart because of earnings. I think I am adding a new rule to my list: never play technical trades when earnings are due. Sounds elementary but I need to follow this one.

Energy and Financials really got kicked today and believe it can continue (well at least for energy). I will look to buy oil service firms very soon and add to my FRO position. As for finanicals, I will probably stay away long and/or short for now. Call me crazy but I am liking REITs. I made 40% in the month of January shorting REITs; however, I refuse to short them here and have covered my shorts for months now. VNO or BXP seem to be solid REITs but have had huge runs, plus I don't like the dividend polices (where they can issue stock for dividends, which is dilutive to shareholders). A broad way to play it is the IYR or the double bull URE.

Lastly, I see that firms are offering alot of secondaries. Firms like APC and F, announced after hours that they will re-issuing new shares. This is concerning, in my view, because it's dilutive but also it may signal that firm's believe their shares are overvalued or in anotherwards "this is the high of stock, because if we thought it was going higher, we'd issue the shares higher because we could issue fewer shares". Another negative that I see is that CDS in Europe are going up.

Frankly, if I was Obama, I would abolish the CDS market. Follow this analogy: Imagine if Life Insurers issued "Life Default Swaps" where a insurance company would sell me a LDS on you and if you died, I was granted money for your death. Do you think people would try to hire people to kill each other to get money? Well, isn't that kind of going on now, with hedge funds spreading rumors and shorting firms into the ground? And now taxpayers have to pay for bets that AIG made? Interesting thought....but in my view, the CDS market needs to end because the bears can raid a stock through the CDS market.