Buzz on the Street: All News Is Good News for This Market
A look back at the happenings on Wall Street this week, as seen by Minyanville's Buzz & Banter.
The banks still matter as a predictive tell, as they encapsulate many of the macro issues in the marketplace. And high-beta remains a proxy for performance anxiety, as discussed yesterday. I am watching them in tandem.
I spent a few days in Cuba at the end of last week; it was like stepping in a time-warp back to 1957. When the embargo is lifted--and I think that happens within the next five years -- there are going to be a ton of opportunities there. Unfortunately, many of those seeds have already been planted and cultivated by insiders.
If and when Twitter retraces, I plan to buy it for my long-term account, much the way I bought Facebook (NASDAQ:FB) at $19 (which I unfortunately treated as a short-term trade). Maybe the trade is to buy Twitter (market cap of $23B) and short Facebook (market cap $114B) on a pairs trade?
As year-end edges closer, emotion will jimmy higher; remember to stick to your knitting regardless of what's going on around us.
Sniffing around the street, I continue to sense that 'flat' is the new 'short.' Prolly for good reason (the bears have been burned every time they've gained a semblance of confidence this year) but worth noting nonetheless.
The Ruby Peck Foundation for Children's Education will be donating 100% of net proceeds raised through the rest of 2013 to the Typhoon Haiyan Disaster Relief Fund. Every little bit helps so thanks kindly for your consideration.
May peace be with you.
Searching for Resolution
The market appears to be falling from a two-day consolidation off of Friday's key reversal. I would pay less attention to the broader indexes and focus on single issues. We are seeing tech momo generals cool off as money is rotating into the original tech giants Hewlett-Packard (NYSE:HPQ), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), along with another round of buying the nifty 50. This is likely institutional players putting money to work as the perpetual rotation out of the long end of the curve continues.
I have held a bullish bias on the market for the entire year. Though the tape that has traded in a straight direction, you certainly wouldn't say it has been stress-free. The target laid out in the spring was 1780-1820. After the reversal witnessed Friday, I willingly suggest that we saw the high for the year on Thursday. Every move needs confirmation. Bears have not received it all year. Maybe this time is different, and it's the bulls that fail to follow through.
The keys remain the same. Semis look like they want higher. Banks were poised to break out and provide continuation. With Morgan Stanley (NYSE:MS) at a 52-week high, I wouldn't be shorting the stock. The market tends to find a bottom near Thanksgiving and trade flat to higher into year end. Let the market sort out what it wants to do here. If you are having a profitable year, protect your gains, be opportunistic, and pick spots. Don't press here. My gut has been saying we see rates tick up, metals weaken, and the market begrudgingly move towards a bull market top in the spring. You can have an opinion and a plan, but if the winds change, so must the sails.
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