Buzz Bits: Dow, Nasdaq Slip
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You imagine me sipping champagne from your boot for a taste of your elegant pride... - Todd Harrison - 3:43 PM
I hear ya Bobby, it's pretty hellish out there as Boo turns the screws into the close. While it coulda been worse, it shoulda been better for the bulls who continue to buzz and banter that 'nothing has changed.' Hey, you know my humble take--I think there's alotta hope (denial) in the marketplace--and it sure seems like they're gonna go down fighting.
I tossed out a nonsensical thought earlier--that we'll close heavy, see a counter-trend rally tomorrow and then a resumption of the downtrend. I don't have an edge, per se, but intend to shave some puts into the close and lean long (with gamma) come Turnaround Tuesday. I'm not playing huge, mind you, as I'm hitting for average rather than power these days.
The bring it home tea leaves find breadth off 3:1, the financials heavy (note the brokers as the XBD tests the 200-day), soft commodities (CRB -1.7%), a stronger dollar and troubled emerging markets (EEM -1.5%, TRF -5%). Geez, I sure hope Jack Bauer fares better than this tonight. I mean, Charles Logan? I didn't see that one coming!
Fare ye well into the bell, Minyans, and remember that tomorrow is promised to nobody.
Position in financials
Mini-Minyan Mailbag - John Succo - 2:36 PM
The 30-day realized on the S&P went from 7.2 to 13.2 (83% move) while the Russel (RTY) went from 10.9 to 16.3 (a 49% change). I know that the RTY (in price) has been lagging the move in the broader market leading into the sell off. But I would have expected a high-beta index such as RTY to move more violently in this tape (e.g. Spring 2006). Thoughts?
Ah, great question.
At market tops they go for the most speculative, the most risky. I interpreted the relative out-performance of RTY as a signal of a top more than anything.
Will the Fed change their bias? - Bennet Sedacca - 11:13 AM
Based on economic and market activity, my hunch is that the Fed changes its bias to neutral at its March 21st meeting.
Considering that 3/15 is a short-term 'cycle low' date for stocks (according my best source on the subject), it would make sense that we could see a nice low for stocks by then followed by a rally in stocks.
With the market pricing in such a large percentage chance of an ease by Summer, the Fed would probably upset the market if it doesn't change, ushering in a chance to ease over the Summer.
At least that is how I see it unfolding. The fact that 31 lenders have gone broke this year and New Century Financial (NEW) is on the way, it would give the Fed a great reason to change bias.
Oops...they did it again! - Fil Zucchi - 8:55 AM
Not many changes to the driving forces behind the equity market's moves. The Yen continues to ramp as the carry trade unwinds. I can't put my finger on the reason for the overnight free-fall by the Euro vs. the dollar, except surmising the carry-trade was not being undertaken in dollars only. Gold and silver are taking more hits, and they are now down where I am again interested in putting on longer term positions.
Incidentally, IMHO, the now total meltdown in sub-prime land courtesy of New Century Financial (NEW) et al. is a much more important story for the equity markets than the macro bets environment. NEW's debt is now in default, which presumably would/could trigger all kinds of hedging and speculative positions against such debt. It also creates all kinds of problems for the throngs of homebuyers that were otherwise lined up to purchase homes (...not) and save the homies from the resumption of their collapse.
With the benefit of all kinds of put positions (which until recently had cost beaucoup bucks for beaucoup years) now coming to life and protecting my rear, I will hold my nose and scale into some of the stuff that I am familiar with, and I have often mentioned here, Akamai (AKAM), F5 Networks (FFIV), MRV Communication (MRVC), and maybe even some new and bit more defensive names like CVS (CVS).
As Toddo often reminds us, "breath Minyans," and if your emotions are running way up there, wait out the storm.
For what it's worth, I think it is already priced into bonds.
Position in AKAM, gold/silver/euro futures
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