I don't see a new Bull Market leg and I am sticking to my investment blueprint.

And I am back to "shorting the rips and not covering the dips."

The rise in yields was stunning today -- and, as a result. I pressed my homebuilder short (The Trade of the Week).

On the long side, I continue to favor the banks as my #1 sector.

Still in meetings.

• Midday musings from Sir Arthur Cashin:

Some vague rumors claim that ISIS types talk of a possible cyber event this afternoon. It does not appear to be a factor in the market so far and is not widespread.

Run rate at noon projects to a final NYSE volume of 650/730 million shares.

Floor conversation begins to shift a bit more toward yield levels.

Dueling market views.

Bret "Meet George" Jensen's "I Find it Hard to be Bullish" addresses the significant role of buybacks on stated EPS. This is something I have written about in "Peak Buybacks." 

By contrast, Ed Ponsi "Scheme" sees "Three Big Positives for the Market."

Game on!

Given the expected rate backdrop, I am bidding across the board for my package of regional banks stocks.

Mid-morning musings from Sir Arthur Cashin.

Apologies!  Communications impaired by computer problems overnight.  Equities continue to confront the virtual iron ceiling that has restrained them for several weeks.  Volume so far feels somewhat indifferent.

I picked up on my short exposure a bit this morning via SPY 210 puts.

Seems like there is a CHANCE that Friday's move was exhaustive. 

Otherwise, kind of quiet.

I tried to get a lot of posts out as I will be traveling today.

I hope to post between meetings.

My Ludicris Forecast is that the market is making a peak this morning for a few days to come.

From Sentiment Trader

Of the nine times the S&P index has gapped up big on a payroll report and has been near a 52-week high, it closed the gap within three weeks on seven of the nine occasions.

My average on my XHB short is $35.84 so far.

Bidding below.

I added small to my SPY June 210 puts at $3.20 this morning.

Bidding for more.

Still only modestly net short, out of respect for Mr. Market.

I am in motion in today's Trade of the Week, shorting XHB.

In response to my opener, "The Gospel According to Paul Tudor Jones," my friend/buddy/pal Raymond James' Jeff Saut sent me this.

Thanks, Sir Jeff!

Jesse Livermore's Trading Rules Written in 1940

1. Nothing new ever occurs in the business of speculating or investing in securities and commodities.

2. Money cannot consistently be made trading every day or every week during the year.

3. Don't trust your own opinion and back your judgment until the action of the market itself confirms your opinion.

4. Markets are never wrong -- opinions often are.

5. he real money made in speculating has been in commitments showing in profit right from the start.

6. At long as a stock is acting right, and the market is right, do not be in a hurry to take profits.

7. One should never permit speculative ventures to run into investments.

8. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.

9. Never buy a stock because it has had a big decline from its previous high.

10. Never sell a stock because it seems high-priced.

11. I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction.

12. Never average losses.

13. The human side of every person is the greatest enemy of the average investor or speculator.

14. Wishful thinking must be banished.

15. Big movements take time to develop.

16. It is not good to be too curious about all the reasons behind price movements.

17. It is much easier to watch a few than many.

18. If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole.

19. The leaders of today may not be the leaders of two years from now.

20. Do not become completely bearish or bullish on the whole market because one stock in some particular group has plainly reversed its course from the general trend.

21. Few people ever make money on tips.  Beware of inside information.  If there was easy money lying around, no one would be forcing it into your pocket.

My trades of the week have been doing well of late (short QQQ, short IWM, long JP Morgan (JPM), etc.).

Let's try to keep up the skein!

Here is an outline of my general thoughts and objectives in delivering the Trade of the Week. 

This week's Trade of the Week is to short the SPDR S&P Homebuilders (XHB) at $35.80.

• Mortgage Rates Are Risingand Housing Will Likely Sputter in 2015's Second Half Last week I wrote about the U.S. housing industry's vulnerability to higher interest rates.
• Sell Side Optimistic on Homebuilders As we enter warmer weather in the country and the seasonally-important home-selling season, most analysts are high on the homebuilding sector. I believe the optimism is misplaced. I expect, away from the silliness in the high end, for the average home price to flatline and for activity/turnover to disappoint throughout the balance of the year.
• Diverging Charts (REITs and Homebuilders) Over long periods of time, the REIT and Homebuilder indices tend to move together on a directional basis. But over the last three- and six-month periods, the Homebuilder Index has materially outperformed the REIT Index (IYR). I believe that the Homebuilder Index can move back towards the REIT Index and that the gap should narrow, as both are rate sensitive.Here is the comparison (XHB vs. IYR) on the three-month chart. And here is the comparison (XHB vs. IYR) on the six-month chart.
• Lower Highs, Lower Lows A classical negative technical picture.
• Lower Lumber Prices As noted by Bobby Lang (to me in an e-mail just now), the price of lumber is back to three-year lows. Over history, lumber prices correlate well to residential housing activity in the U.S. (see chart below).

I will be shorting XHB today.

Peter Boockvar asks: Goldilocks?

The 25bps rate cut from the PBOC over the weekend was the 3rd since November outside of the two RRR cuts. Also of note, there was a further liberalization of deposit rates. China expanded the deposit rate range to 1.5 times the benchmark rate from 1.3 times. The news comes after a benign 1.5% y/o/y CPI print vs the estimate of 1.6% and another deflationary PPI which fell 4.6% y/o/y as excessive overcapacity continues to squeeze prices. The PBOC said this, "the economy faces relatively large downward pressure...the overall inflation level is low, the real interest rate level is above the historical average, for which there was room to use the interest rate tool." The question for China, as its been for all central banks that continue to believe in the effectiveness in monetary policy, is whether the cost of money will matter much in generating growth (banks increasing lending to business) for an economy that is already so over indebted. Or will we see another case of savers bailing out the over leveraged via refi. Either way, after selling off last week the Shanghai index celebrated another round of easing with a 3% rally while the H share index in Hong Kong was up by 1%. The A-H premium is at 30%, thus making the H shares so much more attractive. Copper is down slightly but has had a big rally over the last few weeks that has put it near 5 month highs.

European sovereign and US Treasury yields are getting back almost all that they lost on Friday after the BLS payroll report. Are bond rallies now to be sold? Yes I say because central banks are beginning to convince markets that after all the easing, they have arrested the decline in inflation and inflation expectations and commodity prices have bottomed (these reasons in addition to the many others I listed a few weeks ago). The 5 yr 5 yr euro swap inflation breakeven in particular is back above 1.80%. The low was 1.48% in mid January and was at 1.67% the day before the ECB announced plans for expanded QE.

With respect to the ongoing annoyance that is Greece, the Eurogroup head said today's get together with Finance Ministers will not result in a deal as more time was needed. The Greece owes the IMF 770mm euros tomorrow but will make that payment but only after pillaging local government and agency coffers. Schaeuble and Varoufakis will meet today too.

I heard "Goldilocks" too many times on Friday from people explaining Friday's payroll number. For those who don't remember, "Goldilocks" described the strong growth, low inflation environment of the mid to late 1990's. Now, people are using it to describe the mediocre growth, Fed won't hike rates environment. Either way, however one wants to describe "Goldilocks" the environment has left us with bubbles in many different places, the biggest of which is in fixed income right now of course that is now showing signs of a trend change. People also forget that Goldilocks was trespassing and when she was caught, she fled and never returned.

This weekend, I spent alot of time at Home Depot (HD) to get my East Hampton, Long Island home in shape.

The crowds were large and based on the number of bags of mulch I purchased myself, the company should have a heckuva quarter!

After the frigid winter, the refurbishing, planting, gardening cycle is likely to be in full gear around the country soon. Moreover, winter's damage will also encourage additional purchases associated with needed renovation.

Last year I purchased some Home Depot in the $80s for a trade. I should have kept it as an investment.

That said, the shares of HD have dramatically outperformed the market this year and have likely discounted some of my positive observations that 2015 operating results will likely beat expectations.

There is no training -- classroom or otherwise -- that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. The only way to learn how to trade during that last, exquisite third of a move is to do it, or, more precisely, live it. -- Paul Tudor Jones

Among Paul Tudor Jones' 13 rules, the most relevant (at least to me) are his comments above, which highlight where we might be in the market's confusing current phase.

Paul Tudor Jones is not a man to fade after decades of delivering superior investment returns. His are such good words of advice.

Everyone is in favor of free speech. Hardly a day passes without its being extolled, but some people's idea of it is that they are free to say what they like, but if anyone else says anything back, that is an outrage. -- Winston Churchill

I continue to hold to the notion that the market is in the process of topping out -- perhaps in a major way -- and that we are in the eighth or ninth inning of the bull market advance.

As Paul Tudor Jones extolls, there is often no or little logic to the last third of a bull-market or bear-market move.

Jones suggests "living it." I suggest trading around it!

I will guarantee to all of you, when historians look back at this investing period -- the bad-news-is-good-news thesis, the unparalleled role and confidence in the Federal Reserve, the buy high mentality of share buybacks, the multitude of developing malinvestments, etc. -- they will admit to how stupid investors were to have bought in.

I start the day moderately net short (via a medium position in SPY and a small position in SPY puts) in search of a price momentum change that will provide the right signals (to the downside) and take me to the Promised Land.

Among the legendary hedge-hoggers, Paul Tudor Jones is near the head of the class. Jones is not only brilliant and wealthy, he is one of the most charitable Americans, having founded The Robin Hood Foundation. Here is a compilation of his 13 most important lessons (hat tip to Ivanhoff Capital for sending this to me).

You might consider reprinting this list and taping it next to your stock monitor on your wall or on your refrigerator!

1. Markets have consistently experienced "100-year events" every five years. While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape (and proud of it).
2. Younger generation are hampered by the need to understand (and rationalize) why something should go up or down. By the time that it becomes self-evident, the move is over.
3. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. (Why work when Mr. Market can do it for you?)
4. There are many more deep intellectuals in the business today. That, plus the explosion of information on the Internet, creates an illusion that there is an explanation for everything. Hence, the thinking goes, your primary task is to find that explanation.As a result of this poor approach, technical analysis is at the bottom of the study list for many of the younger generation, particularly since the skill often requires them to close their eyes and trust price action. The pain of gain is just too overwhelming to bear.
5. There is no training -- classroom or otherwise -- that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. The only way to learn how to trade during that last, exquisite third of a move is to do it, or, more precisely, live it.
6. Fundamentals might be good for the first third or first 50 or 60 percent of a move, but the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic.
7. That cotton trade was almost the deal breaker for me. It was at that point that I said, 'Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?'
8. If I have positions going against me, I get right out; if they are going for me, I keep them... Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.
9. Losers average down losers
10. The concept of paying one-hundred-and-something times earnings for any company for me is just anathema. Having said that, at the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE's?
11. The normal progression of most traders that I've seen is that the older they get something happens. Sometimes they get more successful and therefore they take less risk. That's something that as a company we literally sit and work with. That's certainly something that I've had to come to grips with in particular over the past 12 to 18 months. You have to actively manage against your natural tendency to become more conservative. You do that because all of a sudden you become successful and don't want to lose what you have and/or in my case you get married and have children and naturally, consciously or subconsciously, you become more conservative.
12. I look for opportunities with tremendously skewed reward-risk opportunities. Don't ever let them get into your pocket -- that means there's no reason to leverage substantially. There's no reason to take substantial amounts of financial risk ever, because you should always be able to find something where you can skew the reward risk relationship so greatly in your favor that you can take a variety of small investments with great reward risk opportunities that should give you minimum draw down pain and maximum upside opportunities.
13. I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.