• I have to run out early.

Thanks for reading my Diary and enjoy your weekend.

Next week should be fun and, hopefully, profitable.

I am ending the week in market neutral position.

• There is no market cushion provided by short sellers.

I recently wrote that short sellers are an endangered species.

There are NO (except for permabears) emboldened bears out there now because their ranks have been diminished.

As a result, there is no apparent market cushion provided by the ursine cabal.

Even my buddy/friend/pal Billy Fleckenstein recently said it wasn't time to be short.

Despite the almost-3% Nasdaq dip today, Facebook (FB) still possesses a $140 billion market cap. Twitter's (TWTR) capitalization exceeds $25 billion. LinkedIn (LNKD) trades at a market cap of more than $20 billion and a cool 768x earnings. Salesforce.com (CRM), which has been an awful stock, still has a $33 billion market cap (with financial statements that belong in the cloud because they are so damn confusing). Tesla (TSLA), down $50 from its high, is still priced as if gasoline won't have a commercial use in five years. Zillow (Z), although its commercials are touching, is priced at 18x sales and last time I checked, it sells advertising and subscriptions. Then there is Yelp (YELP) that is a collection of restaurant reviews clocking in at 20x revenues.

I could go on.

Bears aren't celebrating today because there are few left.

And shorts, which typically cushion declines like today are ... in their caves.

• I am looking for a little lift into the close.

I will be out of my QQQ long by 4 p.m.

• Tech getting hit.

It is amazing that the Nasdaq is now 125 handles below the high in premarket trading and the QQQs, which I shorted at $89.20, are now $3 lower.

• Good and bad news.

Bon-Ton Stores (BONT) is showing its stripes. Unfortunately, so is my new short IBM (IBM).

Staying long QQQ rental for now.

• I added to my QQQ long at $86.60.

• Besides my buy of more ProShares Short 20+ Treasury (TBF), I have also shorted more iShares 20+ Treasury (TLT).

• Ready under $525.

Good sales in the last few days on Apple (AAPL) (when the silly rotation into tech "value" culminated).

I am a ready and willing  buyer, but only under $525.

• I am a buyer of Northwest Bancshares (NWBI) at $14.40.

• I am adding to Bon-Ton Stores (BONT) under $11.

• Can we all agree on one thing?

Volatility will likely be on the rise in 2014!

• With the benefit of hindsight, these two charts, posted earlier in the week, were prescient.

The first is developing divergences.

The second is a chart that demonstrates excessive optimism.

• I just covered another half of the half MetLife (MET) and Lincoln (LNC) shorts that remain in my book.

Left with tag ends on the basis that I will have another shorting opportunity in the next few days.

• How I've fared.

After covering today's premarket hour short in QQQ for a nice gain, I have now traded QQQ three times from the long side.

I lost 10-15 centson the first two longs and I renetered the long at $86.60 (whcere I still am long from).

• I am taking in some of my Starbucks (SBUX) short now at $71.85.

• Solid gains in my MetLife (MET) and Lincoln National (LNC) shorts this afternoon.

I am taking in half of the short.

• I went back in to QQQ with a long rental at $86.90.

Again with a tight stop at $86.75.

• I am adding to ProShares Short 20+ Treasury (TBF) at $30.45 now.

• I was stopped out for a small loss on my QQQ long rental.

• I am taking a small long rental in QQQ at $87.08 now.

• More evidence?

I wrote on April 1 (after a 60-handle rise in the Nasdaq) that it felt like a classic blow-off top.

Today's action (and yesterday's) might confirm that notion.

• Here is a great summary of this week's macroeconomic events from The Lindsey Group's Peter Boockvar.

Positives

1)While the March payroll figure gain of 192k was slightly below the estimate, the modest upward revision of 37k to the combined two prior months help to offset it. But, the big snapback that many hoped for was not evident and the 192k is little changed with the 194k average in 2013 and 186k in 2012. Improvements in the participation rate and employment ratio were a positive as was the fall in the average duration of unemployment. Also, the workweek rose back to 34.5, where it was in November before the snow filled winter. The drag was another sluggish month of wage growth, even including the weather boost last month. Bottom line, the catch 22 for the market is that the data is good enough for the Fed to continue the taper (will be down by $480b annualized at month end and headed for a decline of $1T by year end), but not good enough we believe to get the 3%+ GDP growth rate that we all hope for.

2)March vehicle sales totaled 16.33mm SAAR, well above the estimate of 15.8mm, up from 15.27mm in February and 15.16mm in January. It's the most since May 2007 with the back half of the month particularly strong as warmer weather brings out the shoppers as do discounts and cheap subprime loans.

3)Purchase applications responding to Spring time and the busier season (although is seasonally adjusted but not so well), rose by .9% to a 2 month high.

4)While many are pushing for Draghi and the ECB to act in order to lift the cost of living for millions of Europeans (the real life way of saying someone wants higher inflation), they show patience and decide to wait to see if the energy and food driven declines in CPI reverse while also telling the markets that all unconventional tools are being analyzed. Amazingly as of today, the Spanish government can borrow money 5 years out cheaper than the US Treasury can and the euro is down on the week. Mario Draghi's words have achieved a lot. March CPI in the euro zone rose .5% y/o/y headline vs the estimate of up .6% and up .8% core which was in line. The headline figure was the slowest pace of gain since October '09 and was led by a 2.1% drop in energy prices. Services inflation though rose 1.1% y/o/y.

5)Germany reported the 4th month in a row of a decline in the number of unemployed in March and an unemployment rate that fell to the lowest since the East-West Germany merger in the early 1990's at 6.7%. German retail sales were better than expected in February but January was revised lower and factory orders in February were above the forecast.

6)Still very elevated but the EU unemployment rate was 11.9% in February and the previous months were revised down to 11.9% from 12%.

Negatives

1)The ISM services index in March rebounded to 53.1 from 51.6 in February but that was below the estimate of 53.5 and the 54 seen in January. The direction though is improved and of the 18 industries surveyed, 13 saw growth and the ISM said this, "the majority of respondents indicate that business conditions are improving. The respondents also project better business activity and economic conditions as weather conditions continue to improve."

2)The March ISM manufacturing index, coming off the weather excused average of 52.3 in the two prior months compared with the average of 56.2 in the last 6 months of 2013, was 53.7 vs the estimate of 54.0. Of the 18 industries surveyed, 14 did show growth and the ISM said "several comments from the panel reflect favorable demand and good business conditions, with some lingering concerns about the particularly adverse weather conditions across the country."

3)Initial Jobless Claims totaled 326k, 7k more than expected and up from 310k last week but the 4 week average stayed basically unchanged at 320k which is near the lowest since late September. Continuing Claims rose by 22k but off the lowest since November.

4)The trade deficit in February widened to $42.3b from $39.3b in January and because it was above the estimate of $38.5b, it will trim GDP estimates for Q1 by .2-.3 of a %, putting Q1 GDP growth likely below 2%. Exports fell by 1.1% m/o/m to the lowest since September.

5)With the average US 30 yr mortgage rate holding at the highest level since mid January at 4.56%, refi applications fell 2.9% w/o/w to the lowest since November '08 not including the seasonal drop at this past year end.

6)NYSE margin debt rose to another record high in February to $465.7b, up from $451.3b in January. It is now at 2.7% of nominal GDP, up from 2.6% in January, exceeds the level of 2.6% seen in July 2007 and is just below the record high of 2.8% in March 2000.

7)The EU manufacturing index was kept unchanged at 53 with the initial read vs 53.2 in February and it's the lowest since December. Italy, Spain and France saw gains while Germany's fell.

8)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.

9)UK manufacturing eased to the lowest since July but is still elevated at 55.3. PMI Services in the UK fell .6 pts to a 9 month low but remains well above 50 at 57.6.

10)China said its main manufacturing PMI was little changed at 50.3 in March vs 50.2 in February and 50.5 in January. The HSBC private sector focused figure fell to a 1 ½ yr low at 48. The manufacturing PMI in South Korea rose back above 50 at 50.4 from 49.8 last month but fell m/o/m in Taiwan, Indonesia and India. 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.

11)In Japan, the large manufacturer Tankan Q1 index rose 1 pt to 17, the best since Q4 '07 but below the estimate of 19 and the Outlook fell 6 pts to the weakest since Q1 '13. The small business index rose 3 pts but the Outlook fell by 5 pts. The services component for both large and small companies rose but also the Outlook fell. Also, the Japanese manufacturing PMI fell to 53.9 from 55.5, a 6 month low. Industrial production in February fell 2.3% m/o/m vs the expected gain of .3% and housing starts rose just 1% y/o/y instead of the 4.8% that was forecasted. Lastly, the consumption tax goes to 8% from 5%.

• The pause that refreshes.

I consider myself a relatively facile trader. But I never thought I would write this: the intraday volatility is getting even too tough for me.

My buy and short pads are being put back into my desk now.

Time to relax.

• No memory from hour to hour.

Trade opportunistically (and hold large cash reserves) in a market with no memory from hour to hour.

• Taking some nice gains.

I am taking in my SPY short ($188.90) and QQQ short ($88.48) for some very nice short-term gains (from premarket).

• Apropos to my interpretation of the jobs report, I pressed my shorts in MetLife (MET) and Lincoln National (LNC) this morning.

•  It removes some near-term risk of substantially higher yields.

In the early going, S&P futures are up 9 as the Street reacts to a not-too-hot-not-too-cold payroll report.

But my view is that flat hourly earnings growth (the last two months of average hourly earnings growth was a more robust +0.2% month over month), a 0.2% rise in participation rate and a 0.1% climb in underemployment is not that sporty.

As mentioned yesterday, this report (which was well below some more optimistic forecasts and whispers) enures to the benefit of the "lower real yields for longer" macro camp.

It also removes some near-term risk of substantially higher yields (in the middle of the curve), may steepen the yield curve and could benefit precious metals (like gold). (Note: The aforementioned asset classes sold off this week on the fear of a stronger employment report.)

• Yields slightly lower.

As I mentioned yesterday, traders might consider taking some profits in the short bond trade.

Investors might consider holding tight.

That said, yields are slightly lower after the jobs report.

I am a buyer of more Proshares Short 20+ Treasury (TBF) under $30.40 and a short seller of iShares 20+ Treasury (TLT) above $109.

• For Facebook (FB) fans.

If you are involved in FB, here are two important reads.

From TechCrunch and in the Harvard Business Review.

• The Lindsey Group's Peter Boockvar on the jobs data.

Payrolls rose 192k in March, just shy of expectations of 200k but February was revised higher by 22k to 197k and January was revised up by 15k to 144k, bringing the upward revisions to 37k. The household survey saw a gain of 476k but because the labor force increased by 503k, the unemployment rate held steady at 6.7% and the participation rate ticked up to 63.2% from 63%, the highest since September. The all in U6 rate rose to 12.7% from 12.6%. The average workweek rose to 34.5 from 34.2. The negative, but likely just weather mean reversion related to the workweek, was average hourly earnings which were flat after a .4% gain in February.

Bottom line, including the previous months revisions, the overall data was slightly better than expected but the pronounced bounce back that many had hoped for was more muted. The 2 month average of 195k compares with 194k in 2013 and 186k in 2012. The US economy continues to create jobs at a good but not great pace that we should be seeing this far into the recovery. It is good enough however for the Fed to continue its taper, especially again at month end, but not good enough we believe to get the 3%+ GDP growth rate that we all hope for.

• I am also re-establishing a QQQ short on the ramp at $89.20.

• Re-establishing my SPY short.

On the ramp following the jobs number, I re-established my SPDR S&P 500 (SPY) short at $189.54. I am back to 5% net short.SP

• Mark J. Grant on the subject this morning:

"But I don't want to go among mad people," Alice remarked. -- Lewis Carroll, Alice in Wonderland

U.S. Five Year - 1.79%

Spain Five Year - 1.76%

Italian Five Year - 1.82%

Irish Five Year - 1.31%

French Five Year - 0.96%

"You would have to be half mad to dream me up." --Lewis Carroll, Alice in Wonderland

I have nothing to say other than to point to the obvious.

We are wandering among mad people. 

The economies in Europe are no better. The unemployment rate is no lower. The fires have been quenched by the manipulation of money and investments. The yields on the sovereign bonds are as printed but the sense of it has been left in the woodshed. High Frequency Trading is but an amateur hour compared to the conjuring that has taken place on the Continent.

You can look at it. 

You can stare at it. 

However you cannot make sense of it.

"The rule is, jam tomorrow and jam yesterday-but never jam today."

"It must come sometime to jam today," Alice objected.

"No it can't," said the Queen.  "It is jam every other day. Today isn't any other day, you know" -- Lewis Carroll, Alice in Wonderland

• HBR on HFT.

Harvard Business Review covers the HFT controversy this morning.

It's a thoughtful read

• By being early and bucking the momentum and consensus, I can look stupid for a while. 

For a few months, Danny Robinson (our editor) and I have been working on compiling what we view as the best articles I have written over the last 15 years and putting them into a book that will be published by J Wiley later this year.

As part of the process, I can't help but think about my intentions in writing thousands of words a day.

Above all, I have tried to deliver hard-hitting, out-of-consensus analysis and trading/investment ideas.

I have tried to deliver my analysis in a humorous and easy-to-read style, which often incorporates lyrics and pop-culture references.

Most importantly (on investments, in particular), I have tried to be ahead of the curve and anticipatory, not reactionary. (My "Time for Withdrawal" column referred to earlier is an example). On trades, I always try to time entry points more precisely than investments.

Recognizing that the crowd usually outsmarts the remnants, being ahead of the curve typically means that I am early. In appreciation of this, I usually start my investment positions small and average in over time. It also means I can look pretty stupid in the near term, as bucking against the consensus can make  you look stupid.

But, though early, in the fullness of time I remain hopeful that a lot of my trades and most of my investments inevitably prove reasonably successful.  This is so because, when averaging in and feeling the price behavior, I often press (accelerate my buys/shorts at points in time to raise my average costs).

Most subscribers recognize that by being early and bucking the momentum and consensus, I can look stupid for a while.

This is my modus operandi and, again, in the fullness of time it works for me.  

I thought this perspective, of being ahead of the curve should especially be explained to new subscribers and hopefully it serves as a reminder to many of our older subscribers.

• More caution on banks.

In "Time to Make a Withdrawal" I recently adopted a cautious position on bank profits and on banking industry share prices.

This morning, in "US Banks Expected to Deliver Weaker Earnings," the Wall Street Journal makes similar comments to mine.

As I opined, the good relative price action in JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) has drawn in investors to the group. I would be a seller of these and most other bank stocks. now 

In the bank sector, I am maintaining only a small long position in Citigroup (C) and an investment in Northwest Bancshares (NWBI) (which is on Best Ideas list, a takeover candidate and play on shale with a reasonable yield and an active repurchase program).

• Tentative ahead of the jobs report. 

Global stocks are mixed on a quiet night of news.

The European bourses are higher and the EUR is continuing to trade lower on Draghi's QE threats.

Asia is mixed. China saw gains and Australia up modestly, while other markets finished lower. Taiwan was closed for a holiday and China is closed on Monday.

Little in the way of news, with nothing materially impacting the overall narrative.

Obviously the big focus today is the jobs report and futures are up small in a market that began to feel tentative yesterday.

I am liquid and looking to be a bit more reactionary than anticipatory, as mentioned earlier in the week, and looking for some respite from the action this weekend.