• "One more thing" -- Lt. Columbo

It's really tough for me to keep up posts on a current basis when I am trading so aggressively -- like Friday and today.

I try to be responsible in my assignment and transparent, so please "bear" with me during hectic periods like we experienced over the last week.

But let me briefly summarize my trading today.

I took in some of my Apple (AAPL), Lincoln National (LNC) and MetLife (MET) shorts.

I added to Monitise (MONIF), Oaktree (OAK) and Citigroup (C) longs.

I took additional long rentals in SPDR S&P 500 ETF (SPY) and PowerShares QQQ (QQQ) in the morning weakness.

I sold out all of my Index long rentals on a scale into the sizeable midday ramp.

Around 3 p.m. I began to reload on my ETF shorts as the market started to roll over.

I just covered the aforementioned shorts.

And I just took a small long rental in QQQ at $92.84 and in SPY at $187.15.

My stops, as always in a "fast market," are tight.

I remain of the view that we made "The Ali Blah Blah Top" for the year and I remain bearish.

But as an opportunistic trader I recognize that stocks don't fall in a straight line.

• I am still trading actively.

I am still trading actively, but I wanted to say thanks for reading my Diary during this period of market duress.

I hope it was value added. The subjects of my columns ran the gamut today.

Enjoy your evening.

I will recap my trades in tomorrow's Market Setup.

• United Arab Emirates flight quarantined.

 A United Arab Emirates flight has been quarantined at Boston's Logan airport after sick passengers are reported, according to the Boston Globe.

http://www.bostonglobe.com/metro/2014/10/13/united-arab-emirates-flight-quarantined-logan-after-sick-passengers-reported/X5DSbXfckXH9Q0PcGMsq4M/story.html

• At 3:53 p.m., $475 million to sell market on close.

• S&P 500 breadth goes through the 200-day moving average

S&P 500

Source: Bloomberg

View Chart »View in New Window »

• So no summary of trades.

I apologize but no summary of trades as I am still actively trading.

I will incorporate in tomorrow morning's Market Setup.

• The market has moved lower after failing to hold the raIly.

• Again, for emphasis.

One of the market's biggest problems could be that many have become inured to an upwardly sloping market.

In support of my bearish view was that the notion of a 10% + correction was foreign to almost everyone.

It has been years since the market has been adversely impacted by "forced" liquidations.

It has been years since investors and traders have been fearful.

What makes the current period so risky (and vulnerable) is that it has occurred with "The Ali Blah Blah Top and after a near tripling in the S&P 500 Index. And at a time in which complacency has grown like mushrooms and, given historically low rates, the notion of TINA permeated the markets.

Again, for emphasis err on the side of conservatism.

I am armed with more than 10 new ideas and I have been waiting for the right pitch and entry prices which provide good reward relative to risk.

There will be continued trading opportunities as we had today.

Out of this move a great deal of money will be made, but not, in my view, until a legitimate capitulation of reasonably large proportions occurs.

• Break in!

Morgan Stanley's Adam "S&P 3000" Parker is on Bloomberg at 3 p.m. today.

•  More pie.

Speaking of American Pie, here is the S&P 500 sector performance pie chart today!

• I wanted to write this quick post for several months.

I will get direct and to the point.

One of the few things I can guarantee subscribers is thoroughness of research.

I am confident that my research into most of my ideas, particularly my Best Ideas list (long and short) is deep and accurate and is not dependent on the assumptions and force feeding by companies' managements. Nor do I regurgitate Wall Street analysts' views and analysis. And, contrary to the notion of some, I dont take my hedghogger friends' views as gospel, regardless of their cerebellum or size of wallet.   

Rather, I undergo a complete analysis based on the numerous company stakeholders (customers) and companies' competition, as well paying a lot of attention to financials (balance sheet and income statements).

The process inherent in my fundamental analysis is lengthy and time consumptive. I do most of my work on the weekends and/or before and after trading hours. 

I respect the work of technicians, but  technical analysis is not my approach. It's not for me and, with the exception of obvious technical issues (support, resistance, etc.), I shouldn't be looked at as a source. Many trade by charts -- and makes plenty of Benjamins doing so (and, again, I am mindful and respectful of this). But as a trader once said to me, the bottom of the sea contains numerous good charts that tell us where stocks have been, not where stocks are going. 

I have a good sense in judging managements, having interviewed more than 500 over the span of my career. But what I can't guarantee is when an exogenous event hits one of my investment holdings (e.g, the New York state conflict with Ocwen (OCN), nor can I guarantee that a company's management will execute relative to expectations (e.g. Monitise (MONIF)).

These factors are, unfortunately, part of the game.

Recommended reading.

Read Jim "El Capitan" Cramer's "10 Things That Can Stem The Panic."



A must-read. 

• The moves are getting extreme.

As an example, the PowerShares QQQ (QQQ) bottomed at about $93.10 - now at $94.85.

The SPDR S&P 500 ETF (SPY) bottomed at about $189.05 - now at $190.85.

Even though this morning looked like continued capitulation, I had the "nerve" to add on that weakness, which was not an easy task. 

I am now scaling out of he balance of my ETF long rentals as I take what Mr. Market gives me.

It is quite possible that this morning we put in a "good " and tradeable bottom, but I would prefer trading back and forth and keeping my positions at "sleeping levels."

My health is more important to the "nickels and dimes" I can make in trading.

If we do rally further, which is always a possibility, scaling down to "sleeping levels" remains my mantra to all of you.

Mr. Market will always be there for us, and most should wait until there is some semblance of stability. 

Given the need for liquidity and sources of funds, the closed-end municipal bond funds have sold off modestly since Wednesday

I am bidding for the group, across the board, today.

• My Mantra

Scalp back and forth.

Sell the rips and buy the dips.

Stay with only high-confidence long-term investments for now.

• Banks are strong.

I am holding into tomorrow's earnings reports.

• Selling some SPY.

I took off some SPDR S&P 500 ETF (SPY) at $190.88  just now. As in the Nasdaq comments, a vigorous rally from the day's lows.

• My first sale today

I am selling a portion of my PowerShares QQQ (QQQ) long rental at $94.80 after a 40-handle rally from the lows.

Just trading.

• Good mid day commentary from JPMorgan.

Quote:

Stocks attempted to rally pre-open but couldn't hold the gains and the SPX as of noon is on track for another red close (the SPX has only rallied twice so far in Oct).  Both the 200day MA and psychologically important 1900 level have been breached on the downside although the selling isn't that intense and stocks appear to be trying to close out the day flattish.  Flows late Thurs and Fri were anxious and a bit rushed but things are more orderly and quiet so far on Mon (part of that is a function of the Treasury market being closed).  The initial selling was broad but some pockets of green are now beginning to emerge (in particular the banks, industrials, rails, and mining stocks are enjoying small relief rallies).  Sentiment is still pretty gloomy and cautious (even bulls are giving up hope of a quick rebound).  "Pain" continues to get mentioned as a reason for the persistent weakness (i.e. suggesting funds are being forced to raise cash and square positioning).  There isn't much to say on the news front ¿ there were plenty of "macro" headlines over the weekend but none are having a big impact on trading overall and most people are focused on the upcoming earnings season (the banks kick things off Tues morning ¿ see preview below).  

US Trading: utilities, tech, financials, industrials, and small-caps are all outperforming while energy, health care, materials, and telecoms lag.  A lot of people are commenting on the ability of the R2K to rally on a day like this (keep in mind though it is a huge laggard vs. the SPX on a YTD basis).  Transports are catching a bid thanks to strength in rails (on the weekend CP/CSX reports).  Financials are outperforming, with strength in the banks (BAC, C, WFC) providing some support for the group (the Street is anticipating another strong earnings season from banks). Materials are in line with the tape, with metals catching a bid, while chemicals come for sale.  Gold Miners (CDE, AEM, PAAS, RGLD, NEM) are taking a leg to the upside as investors rotate into traditionally safe haven names amid macro concerns.

• Adding to three names.

Adding to Oaktree Capital (OAK) with a $47 top, adding to Citigroup (C) with a $50.40 top and adding to SPDR S&P 500 ETF (SPY) at a limit of $189.80.

• I am now down to a small short in Apple (AAPl).

While I remain negative on the shares, Mr. Market says differently right now, as the share price holds up quite well in a general beating of tech stocks.

I will be a short seller on strength, but for now I am taking the short down for a small profit, and not fighting this battle much at all.

As I have consistently written, this is a great market for opportunistic traders.

For now the buy/hold crowd is disadvantaged.

Take what Mr. Market gives us is my mantra.

• As noted recently, I have been accumulating more Northwest Bancshares (NWBI).

The shares are starting to act better, along with the sector.

Safe long-term investment, reasonable dividend yield and a thoughtful capital allocation program.

• I am paying "up" for Citigroup now at $50.33.

• Adding to long rentals.

With the Russell up on the day and financials still solid, I have my green light for long rentals.

Adding.

• Housekeeping item

I am covering a portion of my magicJack (CALL) short today.

• Added another small tranche.

I am sticking with my trading long rentals and I just added another small tranche of SPY and QQQ long rentals.

• Bears repeating.

Back in early August I wrote this column, "Avoid Most Social Media Stocks."

It bears repeating.

• I am paying $46.60 for Oaktree (OAK) now.

• Curious.

Strange strength in financials this morning as stocks approach their lows of the day.

I am not sure what to make of this.

• Real estate maven Mark Hanson hollers.

• Resale housing to lose price gains within a few months
• The "oh-crap" moment;  de-leveraging "remission" leads to elevated spec-vestor house "liquidation event" risk
• Burgeoning rental-backed-securities market -- that gives holders of too many rental houses false comfort about their gross mis-allocation and that has not gone without significant growing pains in it's first year -- highly dependent on high-yield debt market enthusiasm & stability
• the past 2.5 years of average house price appreciation nationally, and especially in the popular momo regions, is greater than any 2.5 year period between 2003 and 2007
• Like in 2007, the threat to US housing lies in everything other than end-user fundamentals because this bubble was also built on everything but end-user fundamentals

It's slowly becoming obvious to "everybody else" that the housing market, as measured by end-user, owner-occupant permits, starts, new and existing single-family demand, is not "recovering" near to year and two ago forecasts, nor past recoveries.  Yet, the "oh-crap" moment is still likely a few months off when prices start going red YoY.

As such, my long-running, multi-year thesis that "this is not what a durable recovery with escape velocity should look like" continues to stand strong.

Perhaps people are confused on the definition of "recovery" in the new-era, momo housing market.  I have always considered a "recovery" something that is "permanent", meaning the root cause of what made the patient sick was indefinitely suppressed or gone for good. In the case of the US housing market -- and global economy for that matter -- that was debt and weak labor conditions.

On the back of  6-years of ZIRP, the Fed printing $4.5 Trillion, the Gov't going $8 Trillion further in debt, and record corporate debt issuance / low yields due to aforementioned Fed activity, to me, this anemic of housing sector "growth" over the past several years indicates this has been more of a de-leveraging "remission" period than a "durable recovery".  In other words, the 2007/08 de-leveraging event was stopped in it's tracks to due nuclear Fed and Gov't policies and now we are picking up where we left off.  

I will concede that from early-2012 to mid-2013 (when rates suddenly spiked) this "remission" period, which allowed house prices to explode upward, caught me off-guard.  But, ultimately, in the context of a "remission", the past 2.5 years will be viewed as more of a "short squeeze" than anything long lasting and durable leaving house prices in a precarious, bubble-like position, last seen in 2007.

In fact, one can argue saliently that 2003 to 2007 was a remission period as well, as house sales and prices first peaked in the early 2000's and it took year after year of increased leverage-in-finance to keep them moving higher.

If past past 2.5 years was a "de-leveraging remission" period, then what are the immediate risk to the housing sector?

There are many metrics and indicators of this housing market that are flashing bright red -- coast-to-coast demand destruction amidst sharply rising supply for one -- most notable and aggressive in the legacy bubble-years turned new-era, spec-vestor haven, momo regions.  But, the one that could happen the quickest and cause the most immediate damage to prices is a spec-vestor "liquidation event".   If liquidations, which are occurring in increasing fashion right now, were to increase significantly in this period of waning demand, supply ratios would surge and prices will fall quickly.

Never before has so much single-family house supply been in the hands of so few private, institutional, hedgefund, and foreign spec-vestors, all in the same "trade".

At least in the 2006/7 bubble, the spec-vestor cohort (every ma and pa in America using exotic loans) had a wide base.  Moreover, most used their spec-vestment as forced savings and for shelter.  In this respect, the market was "insulated" in 2007 against a sudden liquidation event.  And yet, the market was liquidated in short order.

New-era buy-to-rent spec-vestors are thought to be "long-term" in nature.  But, relative to end-users buying for shelter, spec-vestors are simply momo "traders".

History is littered with instances when first-timers and investors jumped in the market all at once. And also littered with instances when they all left at once. The last time first-timers jumped in was during the 2009/10 Homebuyer Tax Credit stimulus, but have been largely absent ever since. On the other hand, new-era spec-vestors have been there the entire time and judging by the internals of house price reports are largely responsible the "v" bottom in house prices on a national level.  It makes sense that if spec-vestors were to suddenly leave the dance, an opposite reaction would occur.

Moreover, because so few hands control so much short-term, speculative supply, a liquidation event can come much quicker and easier than ever before.

To spec-vestors, "liquidation" is not driven by the same catalysts as end-users, such as the typical "five D's" (death, drugs, disease, debt denial, and drugs), aspiration move-up buying, jobs transfers etc. 

Rather, to spec-vestors, liquidation is more about the same things that may cause a disruption in the high-yield bond market, for example.  Especially, given how low the buy-to-rent cap rates really are relative to where they thought when ramping up portfolios, and how high house prices have run over such a short period of time. 

Note, the past 2.5 years of average house price appreciation nationally, and especially in the popular momo regions, is greater than any 2.5 year period between 2003 and 2007.

We know spec-vestors are liquidating. It's evident by the supply-demand divergence in all of the popular momo regions and by the advent and quick acceptance of single-family, residential, rent-backed securities (which could turn out to be a canary in the coal mine if this new segment comes under pressure, is unable to issue new bonds, and those holding a ton of housing stock confident in the fact they can securitize at any time panic).  That is, a hiccup in the high yield market or some sort of legal or ratings problem would send all these liquidations to the primary market.

In short, with houses more expensive than in 2006 to the end-user on a monthly payment basis, if the present pace of liquidation turns into an "event", there is little demand sitting under the market to support prices unlike prior to the 2012 Twist/QE-induced lift-off.

Like in 2007, the threat to US housing lies in everything other than end-user fundamentals because this bubble was also built on everything but end-user fundamentals.

Houses are so damn expensive to the average, incremental, end-user buyer using a loan with monthly payments

\

• Housekeeping items.

I am covering one third of my life insurance shorts in Lincoln National (LNC) and  MetLife (MET).

It's been a good run to the downside in the last week to ten days.

But I am keeping both names on my Best Ideas list (short) as I will be adding to the shorts on strength.

• Again for emphasis.

Err on the side of conservatism in this volatile and uncertain setting.

Keep above-average cash reserves as most investors are best positioned sitting on their hands.

Wait for the right pitch.

• Now adding to this one.

I am adding to Citigroup (C) at $50 now.

Earnings are due out tomorrow.

• Yet again.

I'm back adding to Monitise (MONI, MONIF), for the seventh session of the last eight.

This is an investment, not a trade.

• I paid $190.43 for more SPY just now.

• From the Street of Dreams.

BGC's Colin Gillis upgrades Yahoo! (YHOO) to Buy and raises the price target to $50 from $37 for many of the reasons I mentioned in my Kass Katch.

• Which one is the Volkswagon, Carl?

• The Gospel According to Peter Boockvar.

Following up on the last week's minutes from the FOMC September meeting where the committee discussed their concerns with the economic softness overseas, Vice Chair Fischer repeated that sentiment over the weekend in a speech in DC where he said "if foreign growth is weaker than anticipated, the consequences for the US economy could lead the Fed to remove accommodation more slowly than otherwise." This renewed sense of worry has again taken the air out of the US$ rally with the yen in particular trading at a 4 week high vs the US$. One wonders if central banks will ever get off their extreme accommodation and also one day acknowledge that excessively low interest rates are not always the right medicine. It could also accentuate the disease as more debt is added to too much debt and also create zombie companies and countries as it doesn't allow the needed cleansing and restructuring. On the $ weakness, gold is trading at a one month high and the global FX battle that is ongoing saw this comment from the President of the Swiss National Bank on maintaining the 1.20 peg vs the euro, "we don't exclude negative interest rates."

China reported a big jump in exports in September of 15.3% y/o/y vs the estimate of 12%. It's the best since February '13 and was definitely helped out by iphone shipments as well as another strange 34% export increase to Hong Kong. This again raises skepticism of funny business with export invoices and its likely why the Shanghai index still closed down .4% and the Hong Kong China index was lower by .2%. Imports rose by 7% vs the estimate of down 2%. With respect to the China/Hong Kong spat, the Hong Kong CEO said there is "almost zero chance" that China will change its decision on appointing who will be the candidates for election in 2017. The protests will continue but many are losing patience fast with the disruption to business.

On top of a steady flow of Q3 earnings this week, starting tomorrow in the US we see these data points the rest of the week: NFIB small business optimism index, NY and Philly manufacturing indices, retail sales, IP, business inventories, PPI, housing starts, weekly claims and consumer confidence. In China we'll see this week their important loan data and money supply growth.

• Same theme from Sir Mark J Grant.

And in this corner---The Long Bond

And in this corner---The S&P 500

http://www.youtube.com/watch?v=AdMVNKwP-8k

Say what you like. Blame it on whomever you wish. Point your finger in whatever direction that makes you feel better. It doesn't matter.

It just doesn't matter.

"The search for a scapegoat is the easiest of all hunting expeditions."

             -Dwight D. Eisenhower

According to Bloomberg, the S&P 500 is up 4.60% on the year. All the giddy talk in the equity markets at the beginning of 2014 and all of the predictions bantered about relying upon the Fed's easy money policy or improving economic conditions or the left-sided right-handed newest technical chart that was supposed to predict a 20% gain 12 months out and 4.60% is what you have gotten to date.

"If you could kick the person in the pants responsible for most of your trouble, you wouldn't sit down for a month."

                  -The Sage, Mr. Trooper

The Russell Index (RTY) has fared far worse according to Bloomberg data. It opened the year at 1150.72 and closed on Friday at 1053.52. That is a loss of -8.50%. Things are not looking well in small cap land.

The price of the long bond utilizing Bloomberg data, as represented by the 3.75 of 11/15/43, is up 14.4% on the year. Throw in the coupon and your total annualized appreciation is 18.15%. The long bond has won, year-to-date, by 400%. Count your eggs. Watch them chickens hatch and there you are.

Equities were thumped. In fact, in the last month alone, according to data provided by Yahoo Finance, the yield on the thirty year bond has dropped from 3.27% to 3.01%. That is a 4.7% gain in the price of the old Long Bond in just one month.

Just grin and bear it or bear it without the grin. It doesn't matter!

"There's a man all over for you, blaming on his boots the fault of his feet."

     -Samuel Beckett

In corporates the rise in prices and the fall in yields has also been telling. According to ValueBond the five year "A" rated names which yielded 2.35% one month ago are now at 2.17% for a 7.7% drop in yield.  In the ten year sector the "A" rated bonds were yielding 3.54% last month and are now at 3.29% for a 7.1% drop in yield. Then in the twenty year bonds they were 4.42% a month ago and are now yielding 4.25% for a 3.8% loss in yield.

You may also note here that the yield curve is flattening. On January 2, 2014 the two year/thirty year spread was +353 bps. At the close last Friday, according to Bloomberg data, the spread had narrowed to +259 basis points. This is a 26.70% flattening in the yield curve and it has implications. In normal times this flattening would represent a decrease in the outlook for Inflation. What may also be at play here is the increase in the outlook for the central banks and other investors to purchase longer dated bonds to get more yield in a very low interest rate environment. Neither reason is exclusive by the way, and both are likely in operation, in my opinion.

"It is one or the other or both. Never forget that it is most often; both."

           -The Wizard

Dominance

To get it right. To really understand what is happening in the financial markets you have to "get it right" about the world's central banks. It is apparent to me that most people have missed the mark here and by a wide margin which is one of the reasons why there have been so many idiotic calls about interest rates. Yet these calls continue and the dumb are getting dumber.

The central banks do not "control" the financial markets but, in my mind, they have grown to a position where they "dominate" them in ways that we have never seen before. They have flexed their muscles, bulked up, and, in my opinion, they will not allow their positions to be minimized any day soon on the basis of "protecting the markets from financial crises" if nothing else.

Get used to it. Get over it. They are here to stay!

The World's Central Banks Are In!!!

Outstanding U.S. Bond Market Debt

                                                                               $ Billions                                                                                                                                                    Year     Munis   Tsy      Mtg    Corps  Agency  Money Mkt Asset-Backed Total

2014-Q2  3,661   12,070   8,749  7,664  1,979   2,683     1,378.6      38,187

*Data provided by SIFMA (10/9/14)

Then, according to a report issued by Yardeni Research, who, by the way, provides some great analytics, dated Oct 10, 2014; the Fed, the ECB, the Bank of Japan, the Bank of England and the Chinese Central Bank have $14.2 Trillion in assets. The largest amount of assets, by the way is not at the Fed with almost $4.5 Trillion, but at the Chinese central bank with $5.2 trillion in assets. "Bulked Up" is an understatement. These boys are in the Great Game and in a very meaningful and significant manner.

2014---The Final Chapter

I foresee some kind of correction in the stock markets. The negatives here are America's record breaking margin debt which will exacerbate any decline. Then the recent widening in high yield will also have an impact as well as the price action in the Russell 2000. I view all of these as indicators for some type of correction. To these I add the economic malaise in Europe which, no doubt, will affect the American markets. Finally I remark that China is slowing down which has been clearly indicated by the recent fall in commodity prices. Add them all up, stir the ingredients around and I foresee a decline coming in equities. Ok, I know, how bad?

The answer to this question, in my opinion, rests upon one and only one issue which is what will happen with interest rates. I have been consistent in my call all year and I have explained any number of times why I thought interest rates would fall. No sense rehashing all of that again today. So, if I am right and interest rates decline, the U.S. ten year hitting 2.00% and then heading down, grinding-down, to somewhere around the average of the four largest European economy's ten year yields (Germany, France, Italy and Spain) then the U.S. ten year should stabilize around 1.63%.

If this takes place then the decline in yields will help support equities and the correction will not be too bad. If, however, this does not happen and there is no support in the bond markets or in lending rates and corporate buybacks and the Real Estate market flat-lines then it is going to be a very different story. That story will not be so nice in my view. Not so nice at all.

Places I would be Going

For those of you that, within your mandate, can buy closed-end funds that is where I want to be now. My good friend Randy Forsyth, in his column, "Up & Down Wall Street," wrote about my views last week in Barrons. For those of you that can't be in this space then I suggest being in the long end of the yield curve in whatever products you like. High yield has widened out and between declining interest rates and another surge that I believe is coming in the rush for yield I like that space. More re-financings are likely on the way with lower yields. I like both the Municipal and the taxable municipal markets but you have to cherry-pick and be quick about it.

There is one other interesting product that I am working on with one of the lead banks. It is a floating rate note of a different sort. You will see it if it come to fruition. Bonds that float over 3 month Libor are likely not going to do so well if rates keep declining.

A bear market may be on the horizon in equities. So let us then pay attention to the great wisdom from the most famous of bears.

"Weeds are flowers, too, once you get to know them."

                 -Winnie the Pooh

• I added further to my QQQ long rental this morning at $94.21.

•  Time to sing along.

For almost 15 years my blog and diary have been committed to contributing hard-hitting, logically-reasoned, thorough and, at times, unpopular and contrarian analysis and commentary.

My primary objectives are to make the column add value and have it be informative and fun to read.

Importantly, I try to deliver my messages and views in a style and format that is combined with pop culture and humor, hopefully in a self-deprecating way. My columns, especially my  opening missives, are often integrated with references from comedians, philosophers, poets, lyricists, etc., and include parodies and metaphors to slam home my views. I do this in an attempt to differentiate my contribution to Real Money Pro from the typically dry and commonplace commentary on the economy, individual companies and investment themes that we see on Wall Street.

Having been the son of an extremely hip and complex jazz musician -- secondarily, he was a doctor! -- I have been especially drawn to music and iyrics and I often integrate the message of a song's lyrics with an investment theme.

Here is my latest: "The Day the Market Died" (to be sung to the tune of Don McLean's " American Pie" and with special recognition to Sean Brady and Tom Kearney who originally presented this concept after the Nasdaq blew up in 2000.

Have some fun and sing along!

A long, long month ago

I can still remember

How the market used to make me smile

What I'd do when I had the chance

Is get myself a cash advance

And add another social media stock to the pile

But Whirlybird Yellen began to make me shiver

With every speech that she delivered

Bad news on the global growth front

Still I'd take one more punt

I can't remember if I cried

When I heard about the lowly CPI

But you could lose your capital and your bride 

The day the market died

So bye bye to my piece of the pie

I poured my paycheck into the Russell

Now my cash account's dry

It's just one month from a new all-time high

And now we're right back where we were in July

We're right back where we were in July

Did you buy stocks you never heard of?

LinkedIn at $230 or above?

'Cause the shoe shine boy told you so

Now do you believe in Home Depot?

Can Berkshire save your portfolio?

And can you teach me what's a P/E ratio?

Well, I know that you were leveraged too

So you can't just take a long-term view

Your broker shut you down

No more margin could be found.

I never worried on the whole way up

Buying Tesla from the back of a pickup truck

But on Friday I ran out of luck

The day the market died

I started singin'

Bye bye to my piece of the pie

I poured my paycheck into the Russell

Now my cash account's dry

It's just three weeks from a new all-time high

And now we're right back where we were in July

Yeah, we're right back where we were in July

Now for 20 days, we've been on our own

And my E-Trade broker probably won't pick up the phone

But that's not how it used to be

When investors snapped up another bubble

With cash they borrowed easily

And a quote that flashed up permanently green

Oh, and just as things were turning 'round

Putin slapped the Ukraine down

The courtroom was adjourned

A Bear Market verdict was returned

And while the EU read a book on Marx

Buffet smirked and Chanos barked

While the bears sang dirges at "The Ali Blah Blah Top"

The day the market died

I started singin'

Bye bye to my piece of the pie

I poured my paycheck into the Russell

Now my cash account's dry

It's just three weeks from a new all-time high

And now we're right back where we were in July

Yeah we're right back where we were in July

Manic panic, it's just like the Titanic

Unsinkable and now problems well beyond the Atlantic

The Dow was at 16,500 but falling fast

On "Squawk Box," Tom Lee landed foul on the grass

While Joe and Becky were still trying for a forward pass

With Larry Kudlow on the sidelines in a cast

Now "Fast Money's Halftime Report" air was filled with sweet perfume

But Mr. Market wasn't playing the Najarians' marching tune

The bulls all got up to dance

Oh, but they never got the chance!

'Cause the bearish players took the field

As the long bond fell another 50 basis points in yield

Was mean regression ever really repealed

The day the market died?

I started singin'

Bye bye to my piece of the pie

I poured my paycheck into the Russell

Now my cash account's dry

It's just three weeks from a new all-time high

And now we're right back where we were in July

Yeah we're right back where we were in July

Oh, and suddenly we're underwater

Billionaires all hot and bothered

With no cash left to buy again

So come on, Fed be anxious, com-pen-sate

By lowering to negative the fed funds rate

'Cause easy money is a bubble's only friend

And as I watched the indices fall

I received the dreaded margin call

No broker born in hell

Could make me want to sell

But as my gains fell fast into the crash

E-Trade began demanding cash

The talking heads were talking trash

The day the market died

They were singing

Bye bye to my piece of the pie

I poured my paycheck into the Russell

Now my cash account's dry

It's just three weeks from a new all-time high

And now we're right back where we were in July

Yeah we're right back where we were in July

I met a strategist, the market's most optimistic equity muse

I asked him for their earnings news

But he just smiled and turned away

I logged on to the trading floor

Where I made my fortune weeks before

But they demanded to see cash before I played

And on T.V. the ticker streamed

Stifel's Bannister cried and the short sellers dreamed 

Not a bullish word was spoken

The daytraders were choking

And the three stocks I acquired last

GoPro, Netflix and Comcast

Couldn't catch a bid and faded fast

The day the market died

And they were singing ...

Bye bye to my piece of the pie

I poured my paycheck into the Russell

Now my cash account's dry

It's just two weeks from a new all-time high

And now we're right back where we were in July

Yeah we're right back where we were in July

• I remain bearish, mind you.

As I posted over the weekend, I took small long rentals in the SPDR S&P 500 (SPY) and PowerShares QQQ (QQQ) early in the Friday evening session as futures dropped another 5 handles from the market's close -- and this after a God-awful last hour of trading during Friday's regular hours.

I posted my rationale on Columnist Conversations.

During the weekend, the Twitter market-player commentary was almost universally bearish, even fatalistic -- something that's consistent with short-term capitulation.

I was emboldened to add to that trading long as futures roiled lower throughout Sunday evening, and as market sentiment further deteriorated.

Mind you, I remain bearish and of the belief that the Ali Blah Blah Top is in place (referring, of course, to the Alibaba (BABA) initial public offering).

But that doesn't mean the market is moving in a straight line lower.

In my view, there will have been plenty of oversold readings (now) and overbought readings (three weeks ago) on the journey lower.

Most traders and investors should continue to err on the side of conservatism, waiting for the current storm to pass.

To put this all in perspective, S&P 500 futures were down as many as 12 handles in the Sunday night session, and they began to rally on the better-than-expected Chinese trade data.

That rally continues this morning in the futures

My opening missive will be up shortly, but there will be no Market Setup, as I continue to trade actively now in premarket trading.