Naked Hedge Fund

Well when you have the SEC busy prepping their resumes and fighting off congressmen its easy to let some things slip by. This could be the case today when the AA ramp up started around 3:30pm right before the close and their surprise “in the black” EPS numbers. You can really see the big gorillas in the last minutes loading up on this with the volume spikes. Im guessing that right about now they are enjoying a nice steak at Luger’s.

One thing that I find funny is that if you look at the Alcoa numbers year over year:

* Q3 revenues are down 34% from last year
* Q3 EPS is down 90% from last year (q3 2008 $0.33 vs q3 2009 $0.08)
* Q3 Profit down 71% from last year
* Stock price last year $14.71 … after hours tonight $14.99

Well I guess we can throw them the ol “the market is forward looking” bit to get the market pumping on this.

Well after much anticipation the 3rd quarter earnings season is upon us. There has been endless talk on both sides of the tape. The bears have beaten to death the “lack of earnings” argument, while the bulls have done the same with the “things are getting better” argument. Starting with Alcoa we will see what kind of reaction the market will have with the results…. and thats all that matters is what the market thinks.

This post has some charts that will help you get up to speed with the expectations.

Just to touch base with everyone some charts are below showing where we are from the last post on the downtrend. The NHF sidebar portfolio is short still even though the 50 day moving average bounce is in full effect. The longer term trend is still pointing down, but will announce if there is a change with our position. The charts below have some notes pointing out items of interest to keep in mind.

Video from the Jon Stewart Show on High Frequency Trading. Hilarious

During this amazing rally since March there have been several head fakes to the downside and the million dollar question is if this current pullback will lead to something significant. At the current point the short term uptrend has been broken, but we have not changed the NHF sidebar portfolio yet to start shorting the SPY.

There is definitely a potential for a very large pullback based on technicals. We have not seen monthly stochastic levels this high since the very beginning of the stock market thrashing back in 2007. Below are three charts showing these technical items of interest.