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Random Thoughts

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The trillion dollar question, from a price action standpoint, is when perception and reality ultimately converge.

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  • The obvious focus today is the FOMC decision which, if conventional wisdom holds, will lift rates 25 bips with "data dependent" vernacular. I dined with Succo and Pepe last night and we arrived at the collective opinion that the rate-hike decisions are out of the Fed's hands. We know that foreigners hold massive amounts of dollar-denominated debt and there are immense external pressures to keep rates on the rise to buoy the greenback.

  • Our belief is that, coincident with the "public persona of hawkish intent," which puts on a brave face on our tightening pace, has been stealth printage of new money. If you're a bit confused, you're not alone--there are alotta mixed signals, jaw bones and competing global agendas in play. We've spoken about the "boxed in" Fed for the last few years and the walls seem to be closing in. The trillion dollar question, from a price action standpoint, is when perception and reality ultimately converge.

  • Has anything "changed" to trigger this convergence? Potentially--the great ARMs race, which was championed by the revered and cheered Alan Greenspan, could very well be the catalyst that begins to squeeze the debt-laden consumer and crimp the "economic recovery." And I don't bring this up to be a Debbie Downer--I bring it up with hopes that she doesn't come into your house, sit down at your kitchen table and give you that look. Wah Waaaaah!

  • Expect a tale of two tapes today--the posturing into the FOMC and the post-decision frenzy. And remember, Minyans, the first move (after the 2:15 giggle) is typically the false move.

  • From a trading standpoint, Hoofy and Boo are at odds on how to interpret our current juncture (shocker, eh?). The bull is viewing this dew as a successful retest (and a higher low) versus the June swoon while the bear believes we're simply churning under resistance while working off the oversold condition.

  • Keep an eye on this hedge fund pebble as it could ripple across the industry. And expect to see a few more rocks if the screens don't return to their green sheen.

  • I told Pepe last night that my inclination is to give Boo the benefit of my doubt but that the DeMark TD-Sequential buy signals (that he pointed out yesterday on the Buzz) gave me some pause in the ursine cause. And if you have no idea what a "DeMark TD-Sequential buy signal is," worry not. Tom DeMark will personally hold two afternoon sessions at Minyans in the Mountains III to walk through his approach and teach Minyans how to fish for themselves.

  • Speaking of Pep, he got a LOT of "feedback" on his Tuesday Buzz regarding wealth redistribution. To be clear, he wasn't being critical of Mr. Gates or Mr. Buffett--they were, after all, giving back which is a central tenant of the Minyanville mission. Instead, he was making an astute observation regarding socioeconomic signposts, societal shifts and social moods. It's an interesting point and I suppose one could make the case that other icons of wealth accumulation have shifted their public persona in recent years. I'll leave the "deep delve" to Woody, Scotto, Pepe and other behavioral sages but I, for one, will be interested in their collective thoughts.

  • Deep breaths, Minyans, for if nothing else, perhaps there really is a light at the end of the tunnel!


  • R.P.
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