Tuesday Morning Quarterback
There's nothing wrong with a tanned hide!
Nibblin' on sponge cake,
watchin' the sun bake;
All of those Minyans covered with oil.
We had a humdinga of a Minyanfest Sunday in South Florida. As Minyans mingled against the sunset, I was again reminded of how fantastic our community is. Queen Vanessa set the stage. Bennet Sedacca held court with his queen. Doug Kass talked entertainment with Wendy Wanderman. Julio Beaton and the TradeStation folks chewed the fat with Gator traders. And through it all, the Maven slowly sipped strawberry margs and told tales of times past. It was the perfect tune-up for MiM3 (August 10-13) and, from what I gathered, anticipation for our mountain mingle is already zesty!
Last week's expiration may have exacerbated the price action as traders went bowling for dollars. With the "pin action" gone (removing potential stickiness), look for a truer tone to emerge mid-morning once the hangover subsides.
While I respect the potential for outright deflation to emerge as an "issue," I don't believe it will arrive in the traditional sense. To wit, we've already experienced a slew of deflation in things we don't need--cell phones, laptops, toasters--in tandem with inflation in products and services we need--healthcare, education, energy. This makes for a messy mix but, to arrive back on point, I don't "see" a deflationary spiral with the transports and brokers at all-time highs.
In that vein, we eyed CRB 320 last week as the 200-day moving average (multi-year trendline support) for the commodity proxy and opined that energy and metals were ripe for a bounce. Steve Nash would be proud.
Minyan Donald Bull passed along this interview that recently appeared on another financial website. We share it for four reasons:
1. It was conducted by fellow Minyan Barry Ritholtz.
2. Our goal isn't to compete with other forums. Rather, we aim to feature and brand content that adds value.
3. Paul Desmond of Lowry's is a respected technician and offers good food for thought.
4. Our mission is to provoke thought rather than shape it.
If I was the leader of the free world, I would have a lot to worry about. If he was "us," however, he would be worried about interest rates.
Move over George Costanza, volatilities are experiencing a fresh spate of shrinkage. In that vein, and as the VXO toggles with a ten handle, I'll again offer that outsized movement may be on the way. We're seeing it in commodities and we're starting to see it in other asset classes. It makes intuitive sense that it'll roll into equities and, when it does, a few folks might be surprised (read: no income is "free.") Please remember that there are alotta ways to use this "disconnect" to your advantage regardless of your posture or style. Just make sure you're well versed in the risks (both ways) before you dabble in derivatives.
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