Venice Surf Report 07/10/08 Dead Cat Bounce

Wow - what a huge waste of time this morning.

I was up extra early as i wanted to be in the office by the time the market closed and therefore had some extra time to watch the three dudes out at the pier for dawn patrol. Imight as well have stayed in the car.





In a solid 15 mminutes of watching I didn't see a single wave over waist high and not one guy scored a ride. And Ronnie was out there! He can catch anything, but not even he could get in front of the dumpy little closeouts in any soert of way that made sense.



So, I say stay in bed.

Three out on the north side, dead calm, overcast and cool. Maybe later with the tide push but I REALLY doubt it.

There was some sort of a shoot for something or other going on at the pier at first light.



Ooooh, be still my beating heart!

Saw Tommy for the first time in a while as well this morning.




I asked if I had missed anything while I was away.

"Oh, yeah!" said Tommy.

"Like what?" I asked.

"Well, let's see, there was the uh, thing with what's that guy's name? That was pretty cool. And then there was....uh, no. Oh wait, I know, one night there was this car that came flying down Washington and then....shit, that was last year. I don't know, I guess you really didn't miss anything."

"Sounds like it. What was with all the cops on the pier yesterday eveniing? I saw what musta been a group of 8-10 of then out there around 6:30 or so."

"Oh yeah! Well, the boyos (that's what they call themselves now) were out on the pier having a little party as that's pretty much the only place we can party when one of us gets some money, so Kenny and Randy and Jingles and everyone was out there getting really wasted when all of a sudden about 5 cop SUV's come flying from all directions and go running out onto the pier. It was pretty cool."

"I know, I saw them from the water when I was surfing. They bust anyone."

"No, everybody ditched their beers before they could get to them. If they had just snuck up instead of bringing the S.W.A.T. team they probably would of nailed everyone."

"Bad tactics, then?" I asked.

"Pretty much".

So I bid him farewell and said I would see him this afternoon.

I think a drinking session with the boyos is long overdue, and since I am riding solo this weekend, I am even thinking of doing the HobOlympics 2008. I will see if I can find them this afternoon and see what they think; I know Randy and Christian are in, it's just a matter of finding a new spot now that the cops seem to be onto the pier. Stay tuned for details.

Okay, well, I stuck it out and I am glad I did. SDS and SRS are up $5.00 and $4.10 repsectively and I have gained back ~ 3.00% of the 10% hit I took yesterday.

You may have heard the phrase "dead cat bounce" before and may wonder what it means. Basically it is describing how if you drop it from high enough, even a dead cat will bounce, once it finally hits the sidewalk. The allegory is that if a stock or sector falls very far, very fast, it is very likely that you will see an occasional "bounce" in the price as people try to pick the bottom and get back in just as it starts to rise again.

This is a very, very tough way to pick stocks. Fundamentals are what matter, and sometimes you have to ride these things out in order to get to where you want to be. And to prove this, the street is once again bearish on financials - again selling into any rally - and Iran decided to test it's new 2,000 Km range missile capable of carrying a one ton warhead yesterday, which of course means Israel is in range, bringing oil right back up.

So, it wasn't a hurricane (unless that is what Iran calls the missile) but you can see that any news of any tension in the Gulf shoots oil up and can bring the markets down. Also, keep an eye on oil inventories released at 10:35 EST. If they show a drop, which is expected, you could see another couple buck spike.

The day ain't over, and if I were you and owned any SDS or SRS I would keep adjusting those stop limits up should it continue to rally. With this much volatility you almost have to treat it like you are a (I can't believe I am about to use this term) a day trader.