Be your OWN leader.
Lewis Rothschild: "In the absence of genuine leadership, they'll listen to anyone who steps up to the microphone. They want leadership. They're so thirsty for it they'll crawl through the desert toward a mirage, and when they discover there's no water, they'll drink the sand."
Andrew Shepherd: "People don't drink the sand because they're thirsty. They drink the sand because they don't know the difference."
Good morning and welcome back to the wooly shack. With Dubya and Elmer and Google behind, it's time to dig in for another long grind. While earnings continue to flow freely, the critters have collectively cast an eye towards tomorrow's breakfast with Beeks. Indeed, with Boom Boom's "show me" Fed keying off each economic release, traders will do the same as we play this minxy game. Welcome to the new era, Minyans, where men are men and sheep are nervous.
The standout element yesterday was Google, of course, as the world's largest speculative proxy joined a growing list of bellwethers to wet the bed. You know the list--General Electric, Intel, Citigroup, eBay--but the mood has been surprisingly smug during this collective shrug. One of the first things I learned in trading was that the reaction to news (rather than the news itself) holds valuable clues regarding the underlying supply/demand. With S&P 1275 and NDX 1705 underfoot, the Matador Crowd has to be happy with their showing to date.
Be that as it may--and it may be telling--a whole lotta reasons remain to keep our right paws up. I could delve into the debt dependent recovery (tied to rates) or the compression in the mechanism but Minyans are familiar with those currents. I could speak to the evolving isolationism or the growing domestic chasm but that's not necessarily today's trade. Suffice to say that the disconnect between perception and reality is eye-popping and my risk profile is an extension of that view.
Having been on the metals and energy train for a long time, I recently stepped off to collect my thoughts (they're awfully extended). And while I continue to respect the potential for a strong first half (for the broader tape), I'm content to keep a spate of cheap downside (financial) puts on my sheets as I nibble and tuck my risk. I've discussed my gamma (a risk profile that looks like a "V") as I believe volatility levels will uptick. If I'm wrong and we slither sideways, my risk is defined (which would hurt but not injure me).
Before I hop to the Buzz, I would like to make a quick observation. Anyone chasing pundits, gurus, gospel or all-knowing market prognosticators is in for an unpleasant surprise. For one, nobody can offer blanket advice to a faceless audience without knowing their time horizon and risk profile. Second, being told what to do without knowing the "how's" and "why's" is doing more harm than good as risk manifests.
One thing I've learned in life is that the only difference between lessons and mistakes is an ability to learn from them. Take me at my word, if the schvitz hits the fan, we're all responsible for our own financial choices. Be smart, be aware and above all else, be yourself sir. No matter what happens, they can't take that away from you.
Good luck today.
Daily Recap Newsletter