: Well Played Mr. Buffet

It is kind of crazy to think that someone would shell out billions in this environment to buy a railroad when loads are way down. This purchase also saved the transports index from a complete breakdown which would have, according to Dow Theorists, a broad decline in all of the markets. Whether or not this was a good move, I do not know since I do not follow the railroads, but I do know that it temporarily saved the transport index as it is up pretty big today.

If one wants to draw a conspiracy theory to all of this, they could very easily. After all, Mr. Buffet is very close to the Obama administration and he did invest heavily last year knowing things were very bad, worse than he let on. He also did this on the day that the transports were about to meltdown as well, so, as I said one could very easily draw conspiracy theories from this purchase. However, I believe the transports will still meltdown, it will just take a bit longer than expected.

As for the ISM data yester, as David Rosenberg put it, you got 55.9 from all those regional readings. Right, that is believable. Rosenberg also called into question the GDP number as well, which I did as well, as we had a decrease in hours worked, but a 3.5% print. Well, with the government steroids, sure it is possible, but if you knock out government forget it as the historical average is -.5% GDP growth with that type of hours worked. However, that ISM number did scare this bull and I did knock out my January puts, at only a 205 profit, only to have a reversal in the market.

So, my point is if this market was for real it would have rallied on yesterday’s huge ISM number and what happened? It fizzled out and almost posted a negative day, that should scare you if you are long. As for the rest of the week, the FOMC might change its language in its decision, but other than that don’t get too excited. The ADP number will give you insight into Friday’s number, but when Friday comes around, check out the BLS.gov’s birth/death model to see what voodoo they added to the number, I know the government never would stretch the truth or anything. Thursday, if we do not crack below that 500K initial claims, there is no recovery, sorry.

Again, nice play Mr. Buffet.