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Random Thoughts


Timing is everything!

  • The critter compass is pointing west by southwest (negative breadth under S&P 1270) although, given the jig in the net space, the potential for performance anxiety and the proximity of financial acne, we must remain on our toes.

  • Pharma (paced by a 10% pop in Pfizer (PFE)) and the XAU (buoyed by the bounce in the metals) stand out in sector action. Does anyone else get the sense that this will be a recurring theme in '06?

  • Can you spot Louis Winthorpe in this picture?

  • "The final full week of trading for 2005 has set-up to look eerily similar to that of 2004 as sentiment indications remain optimistic within the positive uptrend. The difference between 2004 and the current environment is the internal picture, which we find quite a bit weaker than last years'. Equities surged in the 4th Quarter of 2004, after the election, but that surge was accompanied by an expansion in breadth and new highs suggesting an underlying force supporting the move. The price action of today's market may appear similar, but the underlying foundation is far less robust, a nontrivial circumstance that is likely to have a greater impact on the 1st quarter of 2005. We would also point out that using recent data or history as a template to the future is fraught with biases and prone to error, and a reliance on the trading pattern a year ago, while proving popular, is likely to end in disappointment after the Holidays." -- Lehman technician Jeff DeGraaf.

  • Strange daze indeed.

  • "Looking at the Morgan Stanley Consumer Index (CMR), there's definite resistance at the 600-617 area (currently 599.30) but we like the current breakout from the tightly formed one-year consolidation. With momentum turning up and the index above upward sloping 10- and 40-week moving averages, we're looking for this index to work higher." -- John "if it ain't" Roque (don't fix it) of Natexis Bleichroeder.

  • Baruch atta ata bra?

  • Note the Russell as it slips under previous December support at RLX 680.

  • They're always welcome in the 'Ville!

  • "Toddo and I have been pinging each other about Pfizer (PFE). If you read our posts over the last couple of weeks, we both believed that PPH would greatly outperform the market going forward. I think the very slight difference of opinion is that of time horizon. A trader will sell this news while an investor will embrace all pullbacks. We continue to believe that big pharma, with their excellent cash flow and negative news likely fully discounted will have a great 2006. PFE's 25% dividend increase, followed by the Rambaxy win on Friday may be the catalysts needed. Technically, PPH has built a large base and will likely face some short-term resistance, which from a trader's perspective, might be faded. But longer-term, the upside to downside risk is heavily to the upside in our view." Bennet Sedacca on today's Buzz (he has a position in PFE and PPH).

  • While "overowned" in the fund community, my eyes keep drifting towards Microsoft (MSFT) as the stochastics edge to the "volume control" of my sixth screen.

  • "Yogi Berra said "The future ain't what it used to be;" and, regretfully, we agree, believing 2006 is going to be a difficult investment environment. Eerily, just like 2004, this year's performance has been jammed into the last few months of the year. Fortunately, we anticipated the rally and have benefited from it. However, the time to be aggressively bullish was nine weeks ago . . . not here! While we continue to think the S&P 500 can trade into the 1280 - 1300 area, the risk/reward ratio has gone from LOW in mid-October to higher-risk currently. As the invaluable "" service said in its weekend blog, "The S&P 500 continued to consolidate and has basically moved sideways for four weeks. The setup for a run into the time cycle high, expected the week of January 13, 2006 (plus or minus a week), is about complete. Overhead resistance is at 1300 - 1315. Support is at 1225 - 1240." We continue to invest/trade accordingly. Happy Holidays to y'all!" Jeff "As Good as it Gets" Saut of Raymond James

  • "2/10 spreads are testing the reflation cycle low here (~6 bps). There's no change to our inversion call---seems to be a matter of time. What is so interesting is how so many trends are coming to fruition simultaneously: yield curve, corp spreads over treasuries, stocks, gold, silver, USD, foreign equities, etc. This strongly suggests that they are all a function of liquidity and psychology. Something to watch as we tread ahead." -- Scott Reamer on today's Buzz

  • A few housekeeping items into year-end
    • If you would like to offer your firm/network a gratis trial of the new and improved 'Ville (coming in a few weeks), click here and we'll gladly hook it up!
    • If you wanna loop your college or university into the UMV syndicate and affect positive change in the academic arena, please connect with Dean Wormer, er, Ford.
    • I'm expecting some serious monkey business next week and I'd be lying if I said I wasn't looking forward to it! We work to live--we don't live to work--and those are just words if we don't actually act on them.


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