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Cold Season


I know I'm cold but this weather is bbbbbrutal!


Twenty years from now? I like to look at the world through my 2020 vision. What do I think will matter to me in the year 2020? I suspect it will have a lot more to do with family and friends (and possibly myself) being eye-to-eye with the grim reaper, with wishing the world were better for my yet to be born grandkids, and with regretting what I haven't done more than regretting what I have done.

Philly Minyan Cathy

Good morning and welcome to the Snapper clapper. Yesterday's green picked up some steam as the trading stream kept to its theme. "Let the bovine regime continue to scheme," said a bitter Boo (it was more like a scream), "while I may lack some self esteem, my ursine team will reign supreme." Does anyone care what's said by a bear? Will Hoofy dance on a wing and a prayer? You know the drill (and the thrill of the kill) so join us now in Minyanville.

Mr. Brodsky touched on the angst in the marketplace during his afternoon snack and hit the nail on the head. One might think that performance anxiety would abate with the calendar flip but the fear of missing remains palpable. I got similar calls yesterday from friends--the type of friends who don't touch stocks--begging me to give 'em a name. While nobody likes collective suffering, it seems that missing a party is even more disturbing.

2003 taught us the caveats of selling hope and buying despair--a stylistic approach that coined money in prior years--and, as such, the question is begged: what pops the piñata? There are two conversations to have in this regard--one relates to near-term trading and the other to longer term investments. They're not mutually exclusive, mind you, but you've gotta define the time horizon of your exposure. That, as much as anything else, was painfully proven by this latest rally.

In the near-term, the most obvious concern (aside from nose bleed overbought conditions) is earnings disappointment. Good news (that's not great) is sold in an extended market and bad news (that's not horrid) is bought in an oversold tape. If--huge if--any of the major bellwethers offer bad news (on the heels of this ramp)--with everyone leaning the wrong way--we'll see some red spread in a hurry.

That type of disappointment is more likely to "surprise" investors than a economic downtick. While both are inevitable and a function of time (in my opinion), the latter will require a series of data points. Identifying market "cusps" is one of the hardest aspects of trading and is potentially hazardous to one's financial health. That's gonna be our challenge as we trade ahead, however, and is our mission should we choose to accept it.

Big picture, the caveats are clear. The dollar and gold are basically screaming that something's amiss although they've been ignored (as they've yet to matter). I've heard some chatter that a dollar bounce could spark a stock shock but I don't have a strong feel on that (although the correlation is stunning). The debt bubble, deficit damage, insider sales, complacency and crowded bull camp have almost become embarrassing in their confusion inclusion but we would be remiss--bull or bear--to discount them entirely (if at all).

Still, stocks act great and if trading phases usually follow the denial-migration-panic cycle, Hoofy will argue that we're still finding our way through the tail ends of that process--and it's that portion that is typically the most violent. The industrials (cyclicals) appear further along than some of their sister sectors and, in my eyes, that's worthy of a nose scrunch. Techs, as we know, are the master betas (in more than one way) and while they're more prone to hard hits (or pops), many of those charts remain relatively constructive.

Don't anticipate the anticipator, please, but do keep an uber-keen eye on the wires as we edge into earnings. Relative expectations are lofty and current levels reflect that optimism. That certainly doesn't mean we can't continue--timing is everything--but, more importantly, this is no time for blind faith. If you're unsure, do a bit less. If you've got conviction, balance it with discipline. And if you're on the east coast, wear some layers---it's fra-eezing ova here!

Good luck today.

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