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Random Thoughts

By

If you're spinning your wheels, put your trading vehicles over to the shoulder.

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  • We flagged Lehman out of this morning's gate and true to form, it's been the torch bearer for its brokerage brethren. Again, these names trade on 'what will be' more than 'what was' although, as we know, we've gotta lotta news coming down the pipe. Tread carefully.

  • S&P 1260 is still the upside hurdle while 1246 is the level of downside lore.

  • We've got a high noon gut Czech for all ye stateside soccer fans.

  • "NYSE cumulative breadth (advance/decline line or net advancing stocks) continues to deteriorate. This indicator peaked on April 5, 2006 and has since put in one lower low and two lower highs. It might already be obvious but the weakness displayed in the breadth indicator says it ain't easy making money on the long side and shorting has become a more profitable endeavor. Plainly, further decay would be bearish. It might sound too simplistic, but this indicator has reflected small and mid-cap strength and has argued for a widely diversified portfolio. The fact that it has now broken below two uptrend lines and has put in one lower low and two lower highs means the environment is changing and investors should be prepared." John "I'll see you at MIM3" Roque of Natexis Bleichroeder

  • Shrinkage? Note the Russell as it slips to session lows (-2%). Other ursine tells include the breadth (3:1 negative), financials (XBD -2%) and the dollar (+30 bips).

  • I'm hearing that large programs have been in play today, unwinding the "long small-cap, short large cap" trade in the marketplace. We're seeing block trades that would support this chatta, in addition to the relative performance (S&P flat, RLX -1.25%).

  • Bovine bits? Pharma (DRG is green), sporadic industrials (GM) and select net names act a'ight.

  • $8 per beer at the Saturday night Petty show in Virginia ? Maybe we should add that to our anecdotal inflation tells!

  • If you're spinning your wheels, put your trading vehicles over to the shoulder. The last thing you wanna do is lose money in a flat tape.

  • Inertia Alert! Lehman is now down 5%. And, for what it's worth, I nibbled a bit on some of my short financials as a function of discipline and consistent with my desire to stay somewhat balanced.

  • T-minus 18 days left in the second quarter. Trust me, that fact isn't lost on a whole lotta investment managers in our midst.

  • And just like that, June expiration is a few short days away. I mean, honestly, has 2006 gone?

  • Lest you missed it Friday, this is an interesting look into the future financial fabric.

  • "Equity patterns have been fairly consistent since May 1 - early highs and late lows. Since May 1, the ND futures are +48 overnight and -210 intraday in points. And coming into today, we've got 6 consecutive lower closes in the ND futures and 6 consecutive closes below the open. This pattern occurred just once before in futes (prior to Oct 2005 low) and just eleven times for the Composite. In each case, there was a solid short squeeze within 1-2 days. Today's open is 1572 and the high morning high is 1574. The market remains vulnerable but a move back above those levels could produce a similar pattern (short squeeze)." Jason Roney on today's Buzz

  • I've done some jockeying this morning--nibblin' on some of my driller faves, taking a short-term flyer in select homies (held for sale by the close) and massaging my metal exposure to sync with my time horizon. And I've been chewing through the piggies, as I'm involved as a function of some late day Friday vibes. "Just tradin'," as I like to say, and trying to make a bit of hay while thy summer sun shines.

  • They may have to close the market soon too.

  • We've been talking about Fed credibility for a few years now and it's interesting to see the mainstream media jumping on the bandwagon as soon as the tape softens. Again, and for what it's worth, I think this is the Elmer effect and we're paying the price for his "past policies". Bernanke? The poor bloke is in the wrong job at the wrong time and simply spoke the truth last week.



R.P.

position in financials, drillers, select pharma, metal equities

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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