In front of a three day weekend--and the last work day of 2011 for many, including myself, the main event has finally arrived.
Santa vs. Scrooge, perhaps the most anticipated fight this side of Mayweather-Pacquiao, is upon us.
You know the tale of the tape. Santa has big time performance anxiety (I think I just stumbled on Pfizer's new Viagra campaign!) and knows that if he can push through S&P 1260-1265
, as per the chart below, it will not only trigger all sorts of technical buying (the reverse dandruff 'works' to S&P 1360
) but it will also jimmy the broad market indices--the DJIA
--into positive territory for the year.
Scrooge, scrappy as he is, has honed his focus on the financials. BKX 40
, with the exception for a fake-out shake-out head-fake higher in October, has been constrained by this level since the summer stock market crash
. He knows that stocks like Goldman
(GS), JP Morgan
(JPM) and Bank America
(BAC) above $5 "matter" for the market, as we live in a finance-based, derivative laced global economy.
Meanwhile here we are, stuck in the middle with you
Click to enlarge
Click to enlarge
These levels are important pieces of the year-end equation, one that will dictate the bottom line that measures risk managers in the marketplace. This has, in my view, been the most difficult year I've ever traded; not in terms of performance, but with regards to the process. I once scribed an article for TheStreet.com
called, The Long Hard Road
, which forecast a difficult financial dynamic for many years, not only in terms of trading but with regard to societal perception of the industry. (I would link it, but they erased all my content when I left.)
So that's the two-sided set-up and regardless of which way you're playing, I would encourage you to see both sides. I will say this, for what it's worth and in the interest of full disclosure, I've been in the Second Side of the Financial Storm
camp for some time but I had an epiphany of sorts earlier this week, when I wrote The Smartest Guys in the Room are Screaming "Get Out of the Market."
If so many big gorillas are in cash, and many others are "risk off," the seeds are seemingly set to pave The Path of Maximum Frustration
higher, not lower, at least for a trade. And this ditty, London Brokers “Throw in the Towel” as Crisis Hits Revenue
, adds another anecdotal data point--that of capitulation--to the equation.
With that said, I abhor blind risk and as today's my last stand for 2011, I've wound down my trading for the year, with the exception of my Research in Motion
(RIMM) position, which I continue to "trade around" from the long side (note: I started buying this before the takeover chatter started). I know there are a LOT of bears in the name but that's why it was down 80% YTD. My sense, and I'm not a tech analyst, is this stock trades back to the high teens or low 20's, depending on the broader tape. And lest I'm wrong, I've set a stop below to define my risk--because I learn from my mistakes, not bury them
Closer to home—literally—we just signed the contract for our new home
, with an anticipated close in the middle of June (how's that for a birthday present?). If I sound excited, it's because I am. If you told me eighteen months ago that I would meet the love of my life, have my first child, live with two terrific twins, and buy a home in Long Island -- all by the end of 2011 -- I would have sad, "Yeah, pull this leg and it plays Jingle Bells."
I guess dreams can
come true, despite the economic hardship, political infighting, financial crisis and societal acrimony. Someone once told me to take care of the minutes and the hours will take care of themselves; how true.
While I've made an effort to remove some of the fluff from my commentary—which is very much a function of social mood—I would be remiss if I didn't share this story, for the longer you wait for dinner, the better it tastes
Good luck Minyans, and have a happy, healthy and extremely safe holiday stretch. May peace be with you and your family, and I’ll see YOU on the other side of Baby New Year!