The Carnage Continues…..

The carnage continues but no one sees it, not even that b@#$% Ms. Market. Goldman was a relentless scale up seller on Friday. They sold 100 cars every handle the market moved higher when the pit was full. When the pit thinned during lunch, they sold 30 lots. They don’t want to jam the locals, they still need them to take their paper. They sold a 200 lot at 1320.00 to make up for the light trade at lunch.

Earlier on Friday Swiss Bank and JPM were buyers so Goldman was the stand out paper seller for the day. Who knows why Goldman is a big seller and has been for two weeks? Maybe they wrote too many options and are hedging. Maybe they are covering longs. Maybe they are getting short. Who knows…. but the selling is significant and significant enough that you must take notice.

Some say that it is how the Market is absorbing the selling that is meaningful. In other words if the Market continues higher on strong selling it just says the Market is more bullish then ever.

I prefer to believe that if you have the ability to swing a line as big as Goldman has been swinging then you have the resources and capital to call market turns. If any house has those resources its Goldman! If you were Goldman and had “free” money to invest and you thought the Market rally was done, would you sell into rising prices or sell into falling prices?

If you sell into rising prices you can sell to all the late comers, the retail, who are now convinced that most of the risk is gone and start entering the market. They are the suckers who buy the top. Selling to them in a rising Market allows you to put on your position under the radar.

You wouldn’t want to sell the size Goldman is selling into a breaking market. You would get lousy fills and you would probably trigger curbs and SEC/CFTC investigations. Then Congressional hearings and the embarrassment of telling them you made a zillion dollars “selling” the market, how un-American!!!

(Actually you cant get more American by having the free will to apply your own capital at your own risk, The un American part comes in when you get tax payer bailouts after you took that risk. AND THEN reinvest that bailout capital back in to the Market, Bernie Madoff is a petty thief compared to what’s happening here.)


Looking further at my fav index, the NYSE, I see we have been rallying in +/-2100 point moves, resting then rallying again. Typically you get three of these up moves in a bull market and we are near the end of the third move. This is just one more argument that we may be approaching a meaningful top.

I also noted that the low of 4181 x 2 = 8362. 8380 was the high on Friday. I read a recent post by Marty Schwartz where he is calling a top in the S&P of 1332 (the 666 low x 2). This prompted me to look at this for the NYSE.

The market likes this simple math. Lets not tell these computer code geeks programming algos this. This is way too simple for their level. Let them keep making it harder then it has to be and we will all enjoy the liquidity. I see this type of simply calculated measured moves in the Market every day. The trick is knowing when they work and when they don’t. That is a matter of considering the context and tempo of the Market. Not too many computer programmers have a clue how to calculate that when it can change moment to moment and day to day (but I bet Goldman has a few).


Even with all this evidence, we still can not call a top. Why? Simple. Prices are still going up. Come Monday I will be a buyer above the opening range (but I might think about going light long June or Sept puts).


Tim Mack



"I buy when other people are selling." - J. Paul Getty