Memoirs From Marbella
I continue to favor energy and metals over the widely held tech and financials.
Buenos dias, mis amigos! It's been some time since I've scribed my vibe as I was away in Spain with the Ohayon tribe. As a precursor to my upcoming nuptials, I joined my future bride and her family for a wedding in Marbella. While I've been to España before, this was a completely different energy and experience. This time around, it was all about family, foundation and tradition. I was unaware that I'm marrying into some of the first Jewish settlers in Marbella, the folks who built the first temple in town after migrating from Morocco. It was a very traditional week and I arrive back in the States with a newfound zest for history, theology, linguistics and yes, fútbol!
The flip side of that trade, as it so happens, was that I was offline from the digital world. No emails, no cell phone, no Blackberry and absolutely no flickering ticks. As I completed my 17 hour journey early this morning, I'm playing ketchup in a variety of ways. As such, I'm going to get random on y'all and share my eyes as they graze the haze of my eight screens. Please bear with me as it typically takes a few days for me to fully find my rhythm and find the beat to a profitable path. I'll get there--we'll get there--but these are my first blush, post-vacation ruminations:
- As I left a few piggy puts on my sheets (vs. a spate of situational longs), the first sector I checked was the financials. As it stands, the bank proxy remains nestled under important resistance at BKX 108.
- On the heels of last week's payroll report, stagflation* continues to reverberate in my crowded keppe. I view this as a tug-o-war between the higher costs of things we need and lower prices (and an attendant lack of pricing power) of things we want. Jeff Saut touched on this in his weekly missive yesterday and old school Minyans should be well versed in this train of thought.
- The two major variables in that equation remain the dollar and interest rates. I'll tell you this, fresh from a week overseas, the dollar doesn't have the clout that it used to. And my sense remains that we'll look back at these levels with a nostalgia typically associated with better days and brighter times.
- I read The Great Gatsby again this past week. It's amazing to me that F. Scott Fitzgerald died believing that he was a literary failure. Hey, at least Daisy lives on in the 'Ville!
- After working off the deeply oversold submerging market condition in the middle of June--and enjoying a snazzy mark-up to end Q2--the S&P finds herself sitting anew on the 200-day.
- The more intriguing action, however, may be found in the semiconductor space, which is down 7% in four sessions. Once upon a time, this fact would have been all you needed to know when searching for a leading indicator for the four-letter freaks.
- The wedding I attended was at the same time as the World Cup Final. To get a sense of European intensity, the reception was postponed until after the game ended as the entire 200-person (mostly French) crowd watched the game on the big screen. It's unfortunate that the game had to be marred by a momentary lapse of judgment.
- There seems to be a fair amount of hope floating around that earnings will bail out the bulls. They might, although I continue to favor energy and metals over the widely held tech and financials. This "pairing" doesn't work in monolithic markets (as we saw in June, when EVERYTHING traded in synch as fears of the Phantom permeated) but I believe they'll outperform in a "normalized" market.
- For those looking to play the energy space, Halliburton and Schlumberger report pre-expiration (next Friday).
- One month from today, we'll be deep in the throws of Minyans in the Mountains III. We've already surpassed Ojai in terms of attendance, content, coverage and "special surprises" and we would love to host you in Vail. As I said to a media maven recently, "This is who we are, what we do and how we do it. Trying to explain MIM to someone who hasn't been there is like trying to explain the sunset to a blind man." See for yourself, my friends, and join the growing chorus of Minyans who will soon mingle in the mountains!
- Good luck today, my friends---it's great to be home. I'll see you on the Buzz.
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