Random Thoughts: A Bear Runs to Daylight

By Todd Harrison  AUG 24, 2011 9:30 AM

Where you stand is a function of where you sit.

 


The earth, moved, under our feet yesterday, and Wall Street took it in stride

Perhaps I'm sensitive to these seismic shifts given the last time I felt an earthquake was almost ten years ago on another beautiful Tuesday in Manhattan... but it wasn't an earthquake.

What's even spookier (in terms of timing) was the back-of-the-envelope analysis I did yesterday morning when I realized that the S&P was off 13.6% in the three month period prior to 9/11 and... 13.6% (on the nose) in the three month period entering yesterday.

I didn't mean to plant that seed, but it was too freaky not to share.

Want another trippy statistic? The Dow Jones Industrial Average has endured more than 10,000 points of intraday swings thus far in the month of August -- and you thought the summer season would be a relaxing stretch!

There’s no rest for the weary but that’s alright, and it’s better than the alternative! Those of us left to navigate the price action, read the policy tea leaves, finger the pulse of psychology, and fit together the interwoven pieces of our global financial puzzle will operate with a competitive advantage.

The market often speaks. The question is, are we listening?

I’ve written several columns in recent weeks that speak to various scenarios within our forward probability spectrum as we navigate the second side of the financial storm.

I’m genuinely enthused to “see through” to the other side for the first time in years, although I’m bridling my enthusiasm given:

  1. There’s a lot of “stuff” between here and there.
  2. I was early in foreseeing the crisis and it stands to reason I’ll be early on the recovery (as the point of recognition -- what we’ve long warned of -- permeates).
  3. The next few years will likely be profoundly painful and we must prepare for that.

Where do we go from here in the near-term? Tell me what the regulatory landscape looks like (short-sale ban, CDS), share the forward path of the greenback, and lemme know if the powers-that-be will let the free market trade free. Then I'll offer an educated opinion.

In the absence of that, I'm keeping my right hand up, making trades to take trades, and traversing this process of price discovery with steadfast discipline and an eye towards opportunity.

Random Thoughts

R.P.

Twitter: @todd_harrison

No positions in stocks mentioned.