May peace be with you!
"A lot of holes in the desert, and a lot of problems are buried in those holes. But you gotta do it right. I mean, you gotta have the hole already dug before you show up with a package in the trunk. Otherwise, you're talking about a half-hour to forty-five minutes worth of digging. And who knows who's gonna come along in that time? Pretty soon, you gotta dig a few more holes. You could be there all friggin' night."
--Nicky Santoro, Casino
A most freaky Friday is wrapping up tidy as we edge through the muck and trade 'em two-sidey. This week has been chock full of action and I think we all got the puffy eye thing going. Imagine my surprise when, as I was cleaning up my sheets and chewin' on some treats, the critters bum rushed into my office for a week ending chat. The conversation went a bit like this:
Daisy: If you keep eatin', Toddo, we're gonna have to declare a two-for-one stock split! Hey, in this environment, that's prolly a smart thing to do!
Boo: Just another sign of the casino mentality that is now passing for money management. The hedge fund community has become a hot space again (despite supposed regulatory scrutiny). That just goes to show ya that nobody will ask questions as long as the screens are green. As soon as the tide turns, I'm pretty sure the finger pointing will start anew.
Hoofy: Hey, Boo's bitter. Shocker! Must be a rally on Wall Street!
Sammy: Yes Hoofy, there's a bounce--particularly in the beaten down financials and S&P type names--but it's still been a pretty sloppy string for the bulls. Early in the week, the better economic data fueled rising rate concerns (and the Fed Fund Futures started pricing in rate hikes). As the week wore on, earnings weren't as robust as some had whispered and the aggregate reaction was to sell the news. Now the Minx has everyone going the wrong way as stronger--I mean weaker--I mean growth--I mean rates--I mean earnings--I mean technical analysis is the collective focus.
Snapper: What about into today's bell? Don't you guys think that I'm due to unleash a rally of pleasure relief that would make a horse blush?
Hoofy: NYSE breadth supports it. So do the banks. I mean, if the market holds in the face of punk piggies--and rallies when the financials are firm--what does that tell ya?
Boo: It's a crowded short?
Hoofy: Or the market is enduring a rolling correction on a rotational basis.
Daisy: I like to roll!
Sammy: The only way you'll know which path we're on is with the benefit of hindsight. I will simply offer the following food for thought. We've got a schvitzload of earnings (again) next week, Elmer will be stepping on his soap box, the geopolitical arena continues to swirl and expiration is surely coloring today's action. Plus, the market rotation (within and around) is fierce as portfolio managers shift their asset class (and sector) weightings.
Boo: I don't know, yesterday, when it looked like they were gonna spill, we spoke about the ability of Citigroup (C:NYSE) to pin $50 (and how that could potentially buoy the Minx. Now that it has (steadied the tape), let's not forget from where we came. Besides, there could be some square dancing (of positions) into the weekend.
Hoofy: I love ya Boo but sometimes the negative vibe gets a bit old. Good luck into the close and may the best critter win!
With that, the menagerie filed out of my office and I turned my attention back to the flickering ticks. It was, after all, expiration Friday and there was an hour left before our requisite two-day respite. On behalf of all the critters, I would like to thank you for chillin' in the 'Ville and being part of the Minyan adventure.
Have a fantastic weekend and I'll see you on Monday!
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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