By Todd Harrison Oct 11, 2005 12:11 pm
T-minus six hours till the U-Tuesday Succofest!
- Imagine what this looked like before midnight?
- $8,000,000,000,000 here, $8,000,000,000,000 there...
- The fly in the "financial domino" thesis remains the pesky brokers. I'm at a loss to explain their relative strength given their exposure to the rest of their punch drunk brethren. While XBD 173 is acne support, please note that we just edged through the trendline from the May low.
- Will Saucy Santa put the kabosh on Hoofy? Remember, the market is a discounting mechanism. If heating costs are gonna crimp the consumer, the tape will begin to price that in.
- Vibes from Dr. Minyan Marc Faber.
- "Looking at the hourly charts, it's easy to try and anticipate a bounce scenario given the market's free fall. However, using more quantitative measures of internal stress associated with mean-reversion calls, this environment looks less robust for the bounce call than the lows of last spring, or August '04. For starters, the sentiment around this weakness has been uncharacteristically complacent, with a modest increase in implied volatility, and little change in surveys or forecasts. We would also note that up-volumes on a 10-day basis have not contracted to the levels consistent with other interim lows for stocks (usually up-volumes will drop to less than 38% of total). Finally, the market has done little to resolve the seemingly oversold condition, which in and of itself suggests something suspicious." -- Lehman sage Jeff DeGraaf
- So long Sammy? (10:49 Buzz)
Before I scooted to Israel, there were several discussions regarding a pending volatility pop. I sensed it, Pepe sensed it, Succo sensed it. It just, well, made sense.
The question, of course, is one of degree. The VXO is up 40% from the September lows albeit from a very low base. This is a far cry from the angst levels of periods past--VXO 20, 30, 40...heck, I remember selling the VIX in the mid-50s back when Russian Rubles and Thai Bahts kept me up at night.
Point being--and yes, there is one--volatility has alotta room to run. It may not happen today (and it isn't necessarily a call to arms) but we should remain conscious of the potential. With the compression we've seen the last few years (traders replacing vol with size in hopes of capturing return), this uptick may have unforeseen and unintended consequences.
- Keep JP Morgan (JPM) $33.30 on your radar (there now) as it's a triple bottom and an '05 low.
- Don't you just hate underachievers?
- "Our fundamental and historical work suggests no change in opinion is necessary, although the market apparently doesn't care what our opinion is since we have clearly been wrong of late. We found that while folks are focused on the near-term support issues, the intermediate-term trend of higher lows and higher highs in the indices continue to be in place. Unfortunately though, we would also note that despite the recent pain, most indices likely have a bit more room for pullback as trendline support is lower (except for the SPX), while the daily oscillators are not yet extreme enough to suggest THE low - yet. This is a good news/bad news situation. The bad news is the indicators tend to reach an extreme with downside action, while the good news is it tends to happen very quickly. In other words, further downside could be nasty, but brief." -- Snoop Tony Dwyer of FTN Midwest Securities
- Hi ho, hi ho, silver is on the go...(+1%)
- There isn't a day that passes that I don't take a moment to be thankful for my blessings. That wasn't always the case but, after several tough gut checks, my perspective is in check.
- Hey Red, where you going with that borscht in your hand?
- Market internals just flipped the Red Dye switch.
- Is this the probe we discussed this morning? This is a probe. With the semis off another percent, the banks making fresh lows, the NDX through 1550 (the 200-day is at 1535) and the nets dancing in Red Dye, that call is dicier than a Vegas vacation.
- The bears will only take so much.
- Please circle Sunday October 23 on ye calendar for a little NYC Minyan Footballfest. Nothing fancy, just some greasy grub and a big group hug at our brother Lionel's snazzy hub. Please let us know if you have an interest!
position in jpm
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