Buzz Bits: Dow, Nasdaq Close Higher
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Goin' home, Goin' home, by the plasma screens I will rest my bones... - Todd Harrison - 3:40 PM
And so it is, another freaky expiration week is winding down. It was a winner for the bulls, who were no doubt helped by the performance anxiety and option influences (S&P 1425). As far as today? A few key themes of note:
- The dollar, which continues to exhibit traction. If it continues, I don't foresee it as "equity friendly" but this, you know.
- Silver. It got thwacked for 7% today. If volatility rolls through asset classes, as it's been known to do, that could a "wink" from Sammy that the last few weeks could flicker quicker.
- The financials. The piggies are above BKX 115 (all-time highs) and, as go the financials, so goes the tape.
- Syracuse Magazine. Hitting the stands today, complete with a full critter expose.
- Emerging Markets. Brazil and Russia are saying that Ecuador doesn't matter...yet.
- Mindfulness. Tis' the season for giving back and taking stock. The holidays are always reflective so please take the time to take care of those less fortunate. As Ruby used to say, "What goes around, comes around" and, as usual, he was bang on.
I'm off like a prom dress so I'll see all y'all blurry eyed and bushy tailed on Monday morning.
May peace be with you
Position in financials
Get a load of this chart! - Bennet Sedacca - 12:47 PM
Thank you to Minyan Conor for sending me this chart. it is a graphical representation of foreign purchases of our equities, Treasuries and corporates on a 12 month trailing basis.
I note a couple of things. They are becoming more brazen and ramping their purchases of corporates over Treasuries-almost $1/2 TRILLION in the last year. Dude, that is a lot and explains the tight spreads and why I don't own any corporates. As I alluded to at Minyans in Manhattan a couple of weeks ago, the problem is that the Central banks are 'crowding out' the private sector. In other words, they are making my life miserable trying to prudently build portfolios.
Next, note how their peak in buying of equities marked the peak of the bubble in stocks here and the trough of buying came as the current cyclical bull began. Not the best of timing I would say. I wonder if they aren't top-ticking this market as well.
Lastly, the action in stocks like General Electric (GE) and Citigroup (C) seems like indiscriminate buying to me. If I were a Central Banker I guess those are the names I would buy too. And they don't care what they pay, further crowding out private sector buyers. Succo and I were pinging back and forth on it and we came to the same sad conclusion-socialism.
Position in C and GE
A gap Letterman would be proud of! - Jason Goepfert - 9:25 AM
If the currently indicated gap in the Nasdaq 100 Trust (QQQQ) holds until the open, it will be the largest gap since April 2004.
Looking at any opening gap of greater than +1.5% since the bull market began a few years ago, buying the open and holding until the close resulted in 2 of 7 winning trades for an average of -1.3%. Meaning those who chased the open got burned more often than not.
In the history of QQQQ, there have been 6 gaps of greater than +1.5% on an expiration Friday. Buying that open and holding 'til close resulted in 1 winning trade with an overall average return of -0.9%. The one winning trade was +0.15%.
It'll be interesting to watch the first hour of trading, as QQQQ should open right at the November high.
Clear insanity... - John Succo - 9:09 AM
As bulls race to buy futures pre-open after a CPI of zero thinking the Fed is now free to come to the rescue, I can only say that the fort has already burnt.
Illinois Tool Works (ITW), Black & Decker (BDK), and YRC Worldwide (YRCW) all guiding lower says the economy is buckling. Zero CPI says there is no pricing power.
90% of all gains in the history of the stock market have come during times of dis-inflation, low inflation where there is pricing power for companies.
Stocks have performed terribly during times of high inflation and deflation.
The struggle continues. But risk is now super high for those not paying attention.
My fingers are sore from hitting the sell button.
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