• MetLife at $53.80 and Lincoln National at $51.31.

"One more thing."

-- Lt. Columbo

I am reshorting MetLife (MET) at $53.80 and Lincoln National (LNC) $51.31 and putting both shorts on my Best Ideas list.

Back net short.

• I have to submerge myself in two research projects this afternoon.

I am anxious to deliver a few more long ideas in the days ahead.

It is unlikely that I will be back by the close.

Enjoy the evening and thanks for reading my Diary.

And God bless Uncle Vinnie

• I am back shorting IBM (IBM) at $193.

• One of each.

General Motors (GM) is trading better. Baxter (BAX) is not.

• Here are my current positions (long and short).

Longs: Apple (AAPL), Baxter (BAX), Bon-Ton Stores (BONT), Citigroup (C), Ford (F), General Motors (GM), Monitise (MONI.L/MONIF), Northwest Bancshares (NWBI), Potash (POT), Procter & Gamble (PG), ProShares Short 20+ Year Treasury (TBF) and Radian (RDN).

Shorts: Berkshire Hathaway (BRK.B), iShares 20+ Year Treasury Bond ETF (TLT) and Starbucks (SBUX).

• I am back down to market-neutral.

I covered my PowerShares QQQ (QQQ) short at $88.58, my iShares Russelll 2000 ETF (IWM) short at $117 and my SPDR S&P 500 ETF (SPY) short at $118.38. I will reload on strength.

I am back down to market-neutral.

Again, my mantra is opportunistic trading. I want to emphasize that this sort of aggressive trading is not for many.

• Just ringing the register.

I sold the balance of my Direxion Daily Small Cap Bear 3X Shares (TZA) long at $15.29 just now.

Ringing the register (small).

• Perhaps I was right about this one?

As I have mentioned earlier this week, it is now looking increasingly likely that the April 1 move in the Nasdaq could be a blow-off top.

• And what rising interest rates usually mean for equities.

There is an interesting discussion on how the U.S. stock market will perform in a rising-interest-rate environment on "Fast Money: Halftime Report" now.

The general view is that if interest rates rise slowly and coinicident with steady domestic economic growth, stocks can prosper.

Below is a table that looks at interest rate cycles trough to peak and compares the performance of the S&P 500 from peak to trough, and it tells a different story.

Interest Rate Cycles

Source: Stawealth.com

View Chart »View in New Window »

• Makes a girl tired.

Our new small-cap analyst, Ava Dorothy Kass, is bored today.

• Illustrated.

Twitter's (TWTR) shares illustrated.

• My favorite long is Ford, and my favorite short is IWM.

Favorite long: Ford (F).

Favorite short: iShares Russell 2000 ETF (IWM).

• At $73.

I added to Baxter (BAX) at $73 today.

• For a small profit.

I sold some Direxion Daily Small Cap Bear 3X Shares (TZA) at $15.14 that I purchased yesterday for a small profit.

• It's risen to the middle of my projected ranged for the year.

The yield on the 10-year U.S. note has increased substantially in the last week and is in the middle of my projected range (2.5% to 3.0%) for this year.

Though I expect rates to go much higher, in the fullness of time (in support of my investment case to short U.S. bonds), I wouldn't be surprised if bond prices rally and bond yields drop a bit from here over the near term.

Thus, short-term traders in the long ProShares UltraShort 20+ Year Treasury (TBT)/ProShares Short 20+ Year Treasury (TBF) and short iShares 20+ Year Treasury Bond ETF (TLT) trade might consider taking some profits now.

That said, shorting U.S. bonds remains my favorite long-term investment.

• Illustrated.

Below is an interesting chart that shows that while the S&P 500 is making new highs, the percentage of stocks making new highs is falling.

A Lack of Participation

Sources: Bloomberg and www.sentimenTrader.com

View Chart »View in New Window »

This is a classic divergence.

• For first quarter 2014, that is.

As expected, Goldman Sachs lowers it first-quarter 2014 real GDP tracking estimate to only +1.3% after reviewing the higher trade balance and weaker jobless claims:

1. The trade deficit unexpectedly widened to $42.3bn in February (vs. consensus -$38.5bn). Exports fell 1.1%, reflecting in part an out-sized drop in industrial supplies (-6.1%). Imports increased 0.4%. Both the real petroleum (-$0.7bn to -$11.9bn) and real ex-petroleum (-$0.5bn to -$42.0bn) trade balance worsened.

2. Initial claims for jobless benefits rose 16k to 326k (vs. consensus 319k) in the week ended March 29. The Labor Department did not comment on the increase. The four-week average of initial claims ticked up to 320k. Continuing claims rose 22k to 2,836k in the week ended March 22 (vs. consensus 2,843k).

3. We reduced our Q1 GDP tracking estimate by two-tenths to 1.3%. It now appears likely that net exports will make a negative contribution to growth in the quarter.

• Run, don't walk, to read Schwab's statement on high-frequency trading.

Charles Schwab (SCHW) responds to high-frequency trading.

Read the damning statement here.

• Illustrated.

AAII stock allocations are near all-time highs.

AAII Data

Source: Ned Davis Research

View Chart »View in New Window »

• At $89.62.

I just added to my PowerShares QQQ (QQQ) short at $89.62.

I am now 15% net short.

• Canaccord on Apple.

Canaccord chimes in on Apple (AAPL) -- I sold some yesterday:

Apple: March wireless surveys indicate seasonally soft sales ahead of high-tier Android refresh in April -- Canaccord Genuity's March U.S. surveys and global handset market analysis indicated seasonally soft smartphone sales ahead of high-tier Android smartphone launches in April. In fact, firm's March wireless store surveys indicated the iPhone 5s remained the top selling smartphone in the U.S. and in many international markets. Firm anticipates new high-end Android smartphones will gain market share versus the iPhone during the June quarter. However, firm believes Apple will win back meaningful high-end market share during H2/C2014 based on its belief new iPhones with larger screen sizes could create a strong upgrade cycle among co's loyal base.

• The IRS complicates bitcoin usage.

This spells trouble for bitcoin.

• Namely, jobless claims, the trade deficit and the ECB presser.

Initial jobless claims, at 326,000, were higher than consensus, though the four-week average is flat and the lowest since last September. Continuing claims increased by 22,000.

As I menioned earlier, the February trade deficit was $4 billion higher than consensus, which shoul lower first-quarter 2014 real GDP by about a quarter of a percentage point. Exports fell, led by drops in Asia and Latin America.

Over there, Draghi said in his press conference that the ECB is ready to act as swiftly as necessary.

The euro is at session lows on the news. The S&P futures have changed little.

• First-quarter real GDP estimates should be revised lower. 

The February trade balance of -$42.3 billion (expectations were only -$38.5 billion) should take first-quarter 2014 real GDP estimates lower -- maybe to under +1.5%.

• At $188.81.

I am adding to my SPDR S&P 500 ETF (SPY) short at $188.81 on the jobs data now.

• It's topped Amazon for four days strong.

Amazon's No. 1 best seller (four days in a row): Michael Lewis's Flash Boys.

• It's Les Misérables.

Mark Grant on Les Misérables:

Monsieur Hollande's Opus

The recent French election, I think it may be accurately said, was a disaster for Mr. Hollande and for the Socialist Party. Usually one may point to a few glimmers to try to change the spin after a defeat of this sort but in France it was a rather acrid black mud where the Socialists were left standing and that is about all one can say. 

The Socialists lost 171 municipal elections including some where the Socialists had held sway for over a century. The right and far right garnered 52.7% of the vote and the far right, the National Front, was the surprise of the day as they gained far more than anyone had expected. I think the vote was telling. Les Miserables are not happy and they voted just that way.

France will also suffer from its particular position as provider of grand vintages and luxury goods to the rest of the world while their own population dines on baguettes and brie. With the recent Russian incursion and the E.U.'s reaction and then the slowdown in China the outlook for the high end French markets may deteriorate rapidly. It may be fine, as Marie Antoinette said, to "Let them eat cake" but some may no longer wish to have their just desserts and some may no longer be able to afford them.

Total admitted government debt, according to the Bank for International Settlements, is $1.925 trillion while their official debt to GDP ratio now stands at 93.5%. On Monday France released their economic data showing growth of 0.3% for all of last year and an annual deficit of 4.3%. These numbers, it should be pointed out, are out of bounds for what is demanded by the European Union though no one, it seems, wants to single out France for fear that Napoleon might be seen out of uniform and alarm those who have not or do not want to peek.

If you actually look behind the curtain you will note that the only reason France had any kind of growth was because government expenditures rose 1.8% as the Socialists ramped up the tax rates to a high of 75% for those who were having some success. Between these two factors some growth was reported but it becomes marginalized by the underlying data and I suspect will be quite short lived. What Socialist regimes tend to forget is that someone must pay for all of their disbursements and while it is quite popular in France, as supported by the rhetoric of the government, to point the accusatory finger at the wealthy it is exactly these same people that must pick up the bills. 

Then there is the unemployment number. It now stands, according to the French statistics office, at 10.9% as France ekes closer to Spain, Italy and Portugal. Now France is the second largest economy in the European Union and their ability to support anyone else is becoming substantially diminished. Monsieur Hollande's ratings in the polls is now below 20% and the parliamentary elections for the E.U. are right around the corner where the Socialists are only polling at 19% at present. The Euro crisis has certainly ebbed but France may rekindle the blaze.

"Before him he saw two roads, both equally straight; but he did see two; and that terrified him--he who had never in his life known anything but one straight line. And, bitter anguish, these two roads were contradictory."

-- Victor Hugo

France has the highest payroll tax (cotisations sociales) in the developed world which, at 43%, is far higher than in any other country with second place going to Spain at 30% according to data supplied by Reuters. While it is impossible to quantify it is apparent that many people and businesses who can leave France are doing so because the taxes and the prevailing attitude about those who have achieved some financial success. I remark that when those who can afford to pay the bills have left the country that serious consequences may result. In other times this may have affected France alone but now it may take its toll on the entire European Union. 

Currently the markets are largely ignoring France and the call is early but I suspect, at some time, that France will come back into focus and it will not be to praise the newest Bordeaux. I think that some of the French banks, many of which are heavily involved in the Emerging Markets, may also come under some pressure both from the situation at home and from their international dealings. A Cyprus or a Greece are not big enough to upset the applecart but France is and some caution is warranted now. The "legs" of the country, like some grand Burgundy of a poor vintage, are becoming wobbly and the nose of black oak and currants is becoming acrid. 

"You are hard at work madam," said the man near her.

"Yes," Answered Madam Defarge ; "I have a good deal to do."

"What do you make, Madam ?"

"Many things."

"For instance ---"

"For instance," returned Madam Defarge, composedly, "Shrouds."

The man moved a little further away, as soon as he could, feeling it mightily close and oppressive.

-- Charles Dickens, A Tale of Two Cities

• Run, don't walk, to read Bradel Hope's 'How High-Frequency Stock Trader Quantlab Guarded Its Algorithms' in The Wall Street Journal.

Michael Lewis has only scratched the surface of high-frequency trading.

Here is fascinting Wall Street Journal article that is in support of my view. 

• It is always darkest before the investment dawn.

Today it is reported that Citigroup (C) might be under criminal investigation for the Mexico blow up.

And earlier in the week there were more General Motors (GM) recalls and a bitter exchange between GM management and Congress.

With headlines such as these, there is always the pressure to liquidate holdings in the companies mentioned.

History proves, however, that it is always darkest before the investment dawn.

I am holding onto both Citi and GM.

• Here are his morning musings.

The gospel according to Peter Boockvar:

The ECB decided to do nothing, leaving its benchmark rate at .25% and its deposit rate at zero. Draghi though will likely be extremely dovish at 8:30am and we'll see if he outlines any new steps to help small business lending and we'll also get his thoughts on the possibility of other unconventional options they have if they don't get the increase in consumer prices in coming months that they want. While central bankers don't want to repeat what happened in Japan, businesses and households in Europe are deleveraging and trying to get more competitive and that is inherently deflationary. Thus, it also highlights the battle that central banks have because they don't like deflation. Bottom line, as most didn't expect a move from the ECB, the euro is little changed in response.

Ahead of the March US ISM services index at 10am where expectations are for a gain to 53.5 from 51.6 and vs 54 in January, the EU PMI services index was revised slightly lower to 52.2 from the initial print of 52.4 and off the February level of 52.6 which was the best since June '11. Services in the UK fell .6 pts to a 9 month low but remains well above 50 at 57.6. PMI services in China moderated to 54.5 from 55 but rose about 1 pt in the HSBC private sector weighted index. Hong Kong services fell 3.4 pts to 49.9, a 7 month low and India's weakened further below 50. Asian markets overall were mixed with the mixed data and the Shanghai index in particular was down by .7% after some stimulus measures announced by officials that were underwhelming. There was help for railway construction, a small business tax credit and aid for low income housing. Copper, the key voting measure of China's growth prospects, is down by .7%.

With respect to Fed officials over the past few days telling us when they think short rates should start their rise (Bullard in Q1 '15, Williams and Evans in 2nd half of '15), all they are doing is putting their names on the 'dots' we got from the FOMC on the day of their meeting two weeks ago. Thus it's not new news and is just faces behind the estimates. Either way, I'll repeat that when it eventually comes time to move next year, the bond market will be well ahead of the Fed in terms of pricing in when it thinks the Fed should act.

• Rates unchanged.

Break in: ECB leaves rates unchanged.

No surprise.

Press conference at 8:30 a.m. EDT.

• I start the day at 10% net short.

• I am at a breakfast meeting this morning, so I will be in a bit late.