|And In This Corner...|
By Todd Harrison AUG 22, 2007 1:41 PM
It's "credit crunch" versus "coordinated global agenda" and the stakes are about as high as you can get.
The following article appeared on the Buzz & Banter today at 1:18 PM and is now being offered in the hopes it will benefit the broad Minyanville community.
The tug-o-war continues with the 800 lb. gorilla on one side and the elephants in the room on the other. Indeed, it's "credit crunch" versus "coordinated global agenda" and the stakes are about as high as you can get.
As we digest and weigh the current fray, I'll offer that the $500 million droplets by the biggest banks in the land are likely a gesture. I would be willing to make a bet ($1, our usual wager) that someone in Washington made a call to ask for support. "At this point," they likely said, "we're all in this together." All indeed.
Conspiratorial? Come on now, the only difference between intervention and manipulation is communication.
To suggest that there aren't behind-the-scenes things in the works would be, in my humble opinion, myopic. THEY know the stakes--heck, Minyans know the stakes--and they're fully aware of the nuances of the trading game, from the negative gamma on expiration Friday to the levels of lore for trader's galore.
So, does it matter for today? I was just pinging with Succo saying that the internals are still buff (3:1 positive) and the S&P futures have a curious bid. Again, I don't know any more than you do, but it sure feels desperate out there. The question, and the point of today's column, is when sentiment will shift.
I'm not being saucy Bernaise--not after what they did to me in 2003--I'm just sayin'. I respect the powers that be because, well, they be in power. But I also want and need to map out the risks such that Minyans see both sides of the trade. The risk is psychology. The risk is sentiment. The risk is that the FOMC built a monster and Igor has already left the castle.
As we cast our gaze into the home stretch, obvious tells include Goldman Sachs (GS) (the most important stock in the universe), market breadth, the homebuilders (Toll Brothers (TOL) continues to stand out but others, including Ryland (RYL) and Lennar (LEN), are soft), and beta (Ebay (EBAY), Research in Montion (RIMM) and Under Armour (UA) flipped the switch, Google (GOOG) remains well bid).
From a trading perspective, I am gonna nibble against the puts I bought on the opening (discipline over conviction) and "trade around" the core short (with BKX 111.50 as a stop level). That poke in the piggies, so you know, is looking more and more like a "churn" under resistance.
Gotta hop and trade this slop. As always I hope this finds you well.