I took my lumps on the last day of the month today, as I set up my portfolio for the end of the world tomorrow: I am short on gold (DZZ), short on the euro (DRR), short on the S&P 500 (SPXU), and short on small caps (TZA). Come on, snake eyes…

DRR: -0.83 to $42.40 (-1.92%, 0.24% overall)–bought at $42.30
DZZ: -0.02 to $4.48 (-0.44%, -0.44% overall)–bought at $4.50 today
NNVC: -0.04 to $0.66 (-5.71%, -14.29% overall)–bought at $0.77
SPXU: -0.16 to $13.85 (-1.14%, -1.14% overall)–bought at $14.01 today
TZA: -0.66 to $28.20 (-2.29%, -2.29% overall)–bought at $28.86 today

OVERALL: -0.45%

In the immortal words of that great philosopher, Meat Loaf, “Now I’m praying for the end of time…”

Right now, I am not feeling comfortable about tomorrow, the 1st of December. The 1st of the month has not been kind to the markets this year, and it has been a mixed bag for December 1st in recent years.

I have a limit sell order on my full Google position at $597.00, although I will chase it later today. I know the old rule about “you shouldn’t try to time the market”, but my gut says get out of equities. I could very well be wrong about this, and the markets could have a perfectly wonderful day tomorrow. But they will do it without me. (except for NNVC, but that’s a teeny position)

UPDATE: Google sold at $597. The final line:
GOOG: +14.07 today, +6.88 overall to $597.00 (+2.41% today, 1.17% overall)–bought at $590.12

Let us play a game. I call it “Solve the world’s problems”. First, I will give you a list of all the major problems in the world, and then a list of news stories which are contributing to the run-up in the markets today.

First, the problems (in no particular order):
1. Europe’s debt
2. Europe’s economic woes
3. U.S. debt
4. U.S. economic woes
5. China’s economic “hard landing”
6. Japanese debt
7. Japanese economic woes
8. Oil prices
9. Iranian nukes

Now, the news stories that the market views as solving the problems above:
A. Central banks lower currency swap rates
B. China lowers bank reserve requirements

ANSWERS (no peaking!): If you matched “B” and “5”, you would be correct, except the Chinese markets were down significantly in overnight trading. On the other hand, if you matched “A” with anything, you win! As the markets are telling us, the cost of currency swapping is really the only problem in the world today. Thanks for playing!

If you need a lesson in why you should never hold daytrades overnight, take my SPXU…please! (with apologies to Henny Youngman)

Seriously, after the news came out about the world’s central banks opening the swap spigots, thereby increasing liquidity in the world economy, the markets were off to the races. I had to dump SPXU in pre-market, because I think the markets could have a monster day today. I sold SPXU at $14.60, for a 7.5% loss. Actually, I got off cheap on that, as I expect the S&P 500 could easily pop for 3% or more today.

My guess for today is the S&P 500 will easily make it past 1205 and 1215, and close around 1230. This is legitimately good news for the world economy, but don’t overrate it. We could easily return to the dumps tomorrow.

I have an early meeting this morning, so you folks will have to settle for an abbreviated notes for today. Sorry.

1. It just got cheaper to swap currencies, as the world’s major central banks cut the swap rate. Markets applaud.
2. Businesses plan for the end of the euro
3. Samsung beats Apple in Australian court
4. It could be time to get into gold mining stocks
5. Good news as fewer job cuts were planned in November

I decided to keep my daytrade on SPXU for another day. Although I could have sold it at the end of today for a small profit, I prefer holding it into tomorrow’s opening. Surely Europe can find something to disagree about overnight?

Mon portefeuille:
DRR: -0.06 to $43.23 (-0.14%, 2.20% overall)–bought at $42.30
GOOG: -5.26 to $582.93 (-0.89%, -1.22% overall)–bought at $590.12
NNVC: 0.01 to $0.70 (1.45%, -9.09% overall)–bought at $0.77
SPXU: 0.03 to $15.81 (0.19%, 0.19% overall)–bought at $15.78 today

OVERALL: -0.14%

If Facebook’s IPO goes off as planned, Facebook will have a starting market cap of $100 billion. A lot of people are questioning this valuation, saying Facebook will then have a greater value than Cisco (CSCO) at $96.8 billion. Facebook is expected to make an estimated $4 billion this year, as opposed to Cisco which made $43 billion as of the trailing 12 months ending in October. But let’s see what other companies would fall under Wall Street’s version of the ”Mendoza Line” (with their market cap/gross revenues in parentheses, in $ billions):

Pepsico ($98.4/$64.5)
McDonald’s ($95.9/$26.4)
Anheuser-Busch InBev ($93.4/$38.6)
Schlumberger Limited ($92.9/$37.6)
Rio Tinto ($92.1/$61.0)
QUALCOMM ($90.6/$14.9)
Amazon.com ($88.2/$43.5)
Citigroup ($73.2/$65.7)

This begs the question: If Citigroup was “too big to fail”, what happens if Facebook ever goes bankrupt?

U.S. index futures are slightly positive this morning, with the S&P 500 leading the big three at +0.5%. Right now, we are looking at the S&P to open up 5 points at 1197.

The key levels to watch on the S&P 500:

1. 1205: If the S&P breaks the 50 day moving average, I would feel safe in calling the markets decidedly bullish.
2. 1170: On the P&F charts for the S&P 500, this is where the bottom resistance is. If it breaks this level, the next stop is clearly…
3. 1158: The most recent low.

My guess is we may flirt with 1205 today, but I would be surprised to see the markets showing enough strength to push through it. I am going to look for shorting opportunities (with SPXU) around 1200.

S&P to fry the French?
If you need a reason to worry (and don’t we all in these happy times?), the rumor mill is churning with reports that Standard & Poor’s is getting ready to downgrade France’s outlook to negative, possibly within the next 10 days. Ah, la joie de vivre…

Mister Softie goes “Yahoo!”
It seems Microsoft is pursuing a bid for a stake in Yahoo. Mind you, they aren’t looking to buy a controlling interest. From the surface, it looks like they are just protecting their current agreements with Yahoo.

I must admit I am tempted to buy some Yahoo, although not because of this news. Frankly, Yahoo is well-positioned to become a leading tech company, if they could just clean up their act and get some real leadership. Yahoo’s financials are fairly clean, even if their performance lately hasn’t been much to cheer about. If I had $20 billion and was looking to buy a company, Yahoo would be at the top of my list.

In case you doubted the U.S. government is corrupt…
If I told you that former U.S. Treasury Secretary Henry Paulson warned hedge funds about the collapse of Fannie Mae and Freddie Mac BEFORE he alerted the public, and even went so far as to lie to the New York Times about the security of Fannie and Freddie on the same day he informed the hedge funds about it, what would you think? That is what Bloomberg is reporting. While I can’t claim to be surprised, I am no less angered by this.

The mother of all IPO’s
It looks like the long-anticipated initial public offering of Facebook may be in the works. bloomberg is reporting that Facebook will make a filing with the SEC before the end of this year, with the actual IPO date unknown at this point. They expect to raise $10 billion on a partial offering which would put the value of the company at $100 billion. If they pull it off, it would make it the largest IPO ever. By comparison:

Google Inc., one of Facebook’s chief rivals in the Internet advertising market, raised $1.67 billion in its IPO in 2004. It is now valued (GOOG) at $190.4 billion.

Can you say “overpriced IPO”? I knew you could…

Iranian missile site destroyed quietly
How do you quietly destroy a nuclear missile site? I don’t know, but that is what happened in Iran on November 12th. Iran claims there was an accident there. As for the Israelis, I am sure they don’t know anything about what happened…

Fitch negative on U.S.
Fitch Ratings still gives the U.S. a AAA rating, but now their outlook is negative. On the bright side, Fitch gave the U.S. until 2013 to get our fiscal house in order. This is why the markets responded with a collective yawn at the news: Markets don’t typically respond to something that won’t happen beyond another year.

Cyber Monday rocks!
Is the world economy collapsing? You wouldn’t be able to tell it by the American consumer. After Black Friday’s increased sales were belittled by analysts who said it was just retailers reducing prices to draw in traffic, we now have a bit more proof of the return of the American consumer: Online sales yesterday, aka “Cyber Monday”, were up 18% over last year. Sales from mobile devices yesterday were up 7.4%. Somewhere in Asia, a manufacturer is saying, “God bless America…”

DRR: -0.53 to $43.29 (-1.21%, 2.34% overall)–bought at $42.30
GOOG: -1.93 to $588.19 (-0.33%, -0.33%overall)–bought at $590.12 (dollar cost averaged today)
NNVC: -0.02 to $0.69 (-2.82%, -10.39% overall)–bought at $0.77

OVERALL: +0.26%

The two things that put me in the black today: My previous Google holding was up over 4%, and my daytrades were both profitable.