Hello fellow traders. Hope your Thursday was a good one. Well, stocks just posted their third straight day of gains. For some folks, that's convincing enough to merit piling back into the market. For me though, it's the exact opposite - this week's bounce has set up a perfect opportunity for the bears to pull the rug out from underneath the market, right when most traders don't expect it. There's a very specific reason, however, I suspect today's rally was the end of the line. I'll explain why for you in a second. First, I want to get on the soapbox about Men's Wearhouse firing its founder and now-former executive chairman George Zimmer. All I can say is, are you freakin' kidding me? Thanks For Nothin' I don't know how many of you have been following the story, but I'm willing to guess most of you are at least aware that George Zimmer - the founder, former CEO, and the now-former executive chairman of Men's Wearhouse (MW) - has been let go for being, as the board put it, "obstinate." He denied their assessment, and even denied that he insisted the company be taken private. He also jabbed back, saying "the directors were more concerned with protecting their entrenched views and positions than considering the full range of possibilities that might benefit our shareholders." It's turned into a bit of a schoolyard fight, but more than that, it's left investors wondering which side of the table is telling the truth, and which side of the table is being difficult. My guess? I'm willing to bet George Zimmer really did come across as obstinate at times. But, I'm mostly willing to bet the board of directors is cry-babying and trying to justify change, and rather than just accept his guidance and experience, decided to get him out of the way be getting him completely out of the board room. For various reasons, George Zimmer reminds me a lot of the late Apple (AAPL) chief Steve Jobs. Jobs liked things done his way, and it seems Zimmer did too. Jobs also made a point of surrounding himself with very smart people, even if a few of them were so-called "yes men." Zimmer had a reputation for getting talented, bright people working for him as well. Steve Jobs was an absolute jerk/nightmare to work for, so even at his worst I can't imagine Zimmer being anywhere near as irritating in a workplace setting... even if he really was obstinate. Where I think Zimmer differed from Jobs - in a good way - is that he had a sincere desire to provide a great customer experience. Jobs just wanted to make a great product that consumers loved. The thing is, Steve Jobs was almost always unequivocally right about his direction. Considering George Zimmer took his company from selling rain coats out of his trunk to an enterprise that does $2.5 billion in annual sales, I think the guy knows what he's doing too. That's not to say Men's Wearhouse is going to fall off a cliff here. Like Apple without Steve Jobs, it could probably coast for a few years without Zimmer's involvement. Let's call a spade a spade though... it's pretty clear Apple's already lost a lot of its magic without Jobs at the helm. I mean, how many different sizes do the iPad and the iPhone have to come in before the market starts to admit it's not an innovative, new product - it's just a reiteration of an old one? Even the rumored iWatch is just another repackaging of the iPod. Perhaps most interesting about all of this is Zimmer's response. In his words (written in a letter posted publicly yesterday): Over the years, as CEO, I consistently encouraged the company to take a longer term approach of investing most of our profits back in the company, delivering value to our customers and building a loyal and dedicated workforce totally committed to service, rather than pursuing shorter term strategies based on financial engineering. Inside the Boardroom, we often had spirited discussions about how best to achieve these objectives. Regardless of whether the Board eventually sided with my point of view or not, I believe this dialogue and discussion led to better decisions that contributed to the success of The Men's Wearhouse. Unfortunately, this dynamic seems to have changed.... ....The reality is that over the past two years, and particularly over recent months, I believe that the Board and management have been eroding the principles and values that have made The Men's Wearhouse so successful for all stakeholders. Earlier this year, concerned with the Board's response to the short term pressures of Wall Street, I encouraged the Board to at least study a broader range of strategic alternatives beyond simply selling the K&G division, including the possibility of a going private transaction. Rather than thoughtfully evaluating the idea or even checking the market to see what value might be created through such strategic alternatives, the Board quickly and without the assistance of financial advisors simply rejected the idea, refused to even discuss the topic or permit me to collect and present to the Board any information about its possibilities and feasibility, and instead took steps to marginalize and then silence me. Such behavior by the Board does not strike me as consistent with sound principles of good corporate governance or the core values of The Men's Wearhouse, but instead suggests that the directors were more concerned with protecting their entrenched views and positions than considering the full range of possibilities that might benefit our shareholders and indeed all our stakeholders. His assessment isn't hard to believe. Heck, it's par for the course anymore. How many boards these days like to think they know how to create value for the long haul, and end up destroying it? Answer: A lot more than you might remember off the top of your head. Hewlett-Packard (HPQ) comes to mind. So does Radio Shack (RSH). Both had great potential, but both were misguided - into the ground - by boards that didn't know nearly as much as they thought they did. Folks, the guy built the company from nothin'. He is the company. The board really should be willing to defer to his judgment on some matters. He's a huge shareholder too, and is very much sitting on the same side of the table as shareholders. My guess is Zimmer was just a political and psychological threat to current CEO Doug Ewert and his cronies, and this is how the dynamic finally materialized. We've seen it happen before. So now what do current MW shareholders do? There's no need to run right out and dump it today, but I do think the new Men's Wearhouse regime is going to miss the boat on the things that made the company great, and as such the company will suffer a slow - almost imperceptible at times - disintegration. Oh, the company may look good on paper for a couple more quarters, but I just don't see this board making the company the standout that Zimmer made it, in much the same way Steve Jobs' missing greatness has undermined Apple of late. To plan on holding MW indefinitely means lost opportunity in other stocks. Just my two cents. With that being said, I'd be curious to hear what you guys think. Let's make Men's Wearhouse today's stock-rating guinea pig. Click on the link to the MW research page at the site, and rate it a buy or a sell. More than that, though, I'd really like to hear what you have to say about the company's future without Zimmer at the helm. You can post lengthier comments at the site as a blog entry, but if you just want to post a short sentence, you can add that note by "Adding a new pick" to your portfolio (which is a slightly different process than rating the stock a buy or a sell... it's still easy though.) Speaking of stock-picking, knotfree is coming on strong, jockeying his (her?) way onto the stock-picking leader board. I don't recall seeing his moniker before today, but with six of his seven picks well into profitable territory, I'll be watching for his picks in the future. Think you can do better? Start picking. OK, moving on. Stocks Just Bumped Into a Ceiling Yes, stocks posted a third straight gain, but care to guess where the rally effort fizzled? Today's high was 1620.07, which happens to be right where the 50-day moving average line is, and just a tad above where the 20-day moving average line is. The 20-day moving average line fell under the 50-day line yesterday, which -like I mentioned in the newsletter- presents a ton of technical problems for the S&P 500. Today's up-ended rally underscores that premise. You can also see that the volume behind today's rally effort was once again weaker than the volume behind Wednesday's effort, which was weaker than the volume behind Tuesday's rally effort. You get the idea. The higher the market goes, the less and less newcomers want to get into it. The bottom line is, we're at an inflection point. If the bulls can carry the index above a huge resistance level around 1620, that would jump-start the longer-term rally. It's a ridiculously-high hurdle though, and I just don't see it happening.... not with six months' worth of gains (of about 20%, if not more) begging folks to keep taking profits. I'd love to be wrong, but I've got to be honest with you - my gut says the rally over the past three sessions is going to open the door to a lot of sellers who were regretting not selling before last week's implosion. I know it looks and feels against the grain, but so did getting long on Monday, and so did getting short on the 18th. Both of those trades would have panned out nicely, however, as each reversal was as big as it was surprising. If you're not sure, my advice is simply to wait and see what happens on Friday and/or Monday. If we fail to clear the 1620 ceiling and make a decent downward move on strong volume, take that as a sign that the next bearish leg is underway. For me though, I've already seen enough to take a bearish swing. We'll see. Oh, and on a side note, yesterday I suggested gold needed one more good 'down' day to finally become buy-worthy. Today's near-2.0% dip should have done the trick. You might want to go shopping here.