March Madness: The Quarter-End Bender

By Todd Harrison  MAR 14, 2013 12:50 PM

Money managers are getting squeezed.

 


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

The quarter-end bender is upon us, with everyone and their sister expecting strength into month-end and April inflows thereafter. While I've tapped the tape a few times this year (read: tested the short side), I certainly haven't been fighting it, so I have no ax to grind. While we've spoken to the price points that matter through a technical lens, there are two determinants of profitability: price, of course, and time.

This is my 23rd year of trading—I'm shaking my head in disbelief—and while my crystal ball is in the shop, I will offer that there is an nonsensical tendency for the quarter-end mark-up to stall (or reverse) a few days prior to month-end. Looking at my calendar, with a nod to Good Friday, this would suggest the upside window could extend another nine sessions (of course, it need not be a straight line).  

IF that window happens to coincide with our S&P (INDEXSP:.INX)1580 price point—and the fact that I'll be away from the fray those few days taking my family to Disney for the first time—the stars, as they say, would seemingly align. Much like Turnaround Tuesday, the “Out-of-Office” indicator is right up there with the “Sleep-O-Meter” and the “First Move is the False Move” (after the FOMC) phenomena.  

Now, that and $2.75 will get you one ride on the subway, and when trading, much like in life, the destination we arrive at pales in comparison to the path we take to get there. So file the above vibe in a corner of your crowded keppe as we continue to take our journey one stair-step at a time. We don't need to know where the market will be in nine days—we don't even need to know where it will be later today—we simply need to manage risk, as the mechanics of our swing always trump the results of the at-bat.

In sum, and with sentiment levels as they are, we must remain conscious of hidden trap doors that can—and would—catch market players off-sides. With fund managers in catch-up mode and expecting a rally through quarter-end (they have performance anxiety that would make Bob Dole blush)—the tape is ripe for a yellow flag (read: off-sides) as the world climbs hand over fist for results.

Random Thoughts:
R.P.

Disclosure: Minyanville has a business relationship with BlackBerry.

Twitter: @todd_harrison

Position in BBRY.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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