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Tuesday's With Story


Hit 'em hard!


Good morning and welcome back to the icy shack. A shivering chill has swept through the 'Ville as traders get ready to hike up the hill. The ranks are now thin (and it'll get thinner) as critters get set to declare a winner. "I've bided my time and waited till now," said Hoofy the bull to Daisy the cow, "if we weren't nervous and dabbing our brow, we wouldn't be worthy of chewing our chow!" Can Turnaround Tuesday lift as they think or will Boo's motley crew push this tape to the brink? We'll know soon enough as we unwrap the layers and settle on in with the rest of the players!

As we turn the final pages of 2004, traders are watching the tape as a young child would eye presents under a Christmas tree. Indeed, both share an anxious optimism as we tick towards baby new year and neither knows what awaits until after the gifts are unwrapped. Alotta Ralphies are wishin' for the official Red Ryder Carbine-Action Two-Hundred-Shot Range Model Air Rifle. And they just might get it. The more pressing question, for those of us warming our cockles beside the fire, is whether they'll shoot their eye out with that thing!

There is a fine line between optimism and recklessness and the rising yule tide rests somewhere in between. While the weather outside is frightful, the bulls will stay delightful as long as they can get through this morning's double barrel broker peril. Yes, the thinning and thawing ice is creaking (not cracking) but the cold front has fortified their footing for now. And as long as the pond fondness permeates, traders will look to mark stocks higher. Please pay particular attention to the BKX 100-104, Google (GOOG:NASD), Citigroup (C:NYSE) $46.50 (200-day), the cyclicals (acne?), retail, small caps and the macro influences as we fuse the clues.

I entered this past year cautious on mainstream equities and was "waited out" by the bovine clout. The oft-mentioned concerns remain in play and, in my view, become more dangerous with less credibility. Most folks fail to make a distinction between a "strong economy" and a "debt-fueled, stimuli driven" environment. Why? They don't care--as long as the markets lift, they can borrow more (cheaper) and facilitate their lifestyle. We'll eventually hit an inflection point where supply exceeds demand but that juncture will only be recognized (accepted?) with the benefit of hindsight.

I've been trying to wrap my head around 2005 but a lucid assessment has yet to crystallize. The conditional elements of the pain trade are in place and, out of respect, we must include "down hard" into the probability spectrum. There is also the potential that the M&A activity and share buybacks (that the Horse has nailed) continue for a while and produces a giant sucking sound (final blow-off). Could that coincide with the "speck" on the horizon that is actually a mountain of corporate debt? Perhaps, but I'm not sure that's next year's business and, therefore, isn't allowed in today's column.

I will offer that opportunities remain outside the box and traders should remain "aware" and open-minded of tertiary opportunities. The metal and energy migration is still in the early innings, I believe, although both are sure to be volatile at times and hated at others. Indeed, my "situations" are in this arena and I've made a conscious decision NOT to trade those core positions. Perhaps an old dog can learn new tricks as I sail along without constantly jerking the rudder around!

Finally, and obviously most importantly, the Minyanville Holiday Auction ends today (4pm) and one lucky Minyan (and a guest) will take center stage for tomorrow's rage! As Mr. Macke and Mr. Succo can attest (and if the "pre-game" is any indication), Festivus is gonna be some sorta humdinga this year. We've got Minyans flying in from all over the country to toast the critters and celebrate friendship and family. And with the proceeds to benefit The Ruby Peck Foundation for Children's Education, everyone is certain to walk away with a face full of smiles and a head full of memories!

Good luck today.


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