By Todd Harrison Jul 29, 2003 3:01 pm
You aint seen nuttin yet!
Baby please, squeeze me tight
Now don't you want your baby to feel alright?
I said baby (baby), now it's for sure
I got the fever baby, and you've got the cure
Another day, another dollop. Indeed, after the whipped trip around today's ship, the cream is thick in the Minxy shtick. Dips, blips, slips, whips, gips...you name ip, and we've had ip! While not much has changed in the overall dynamic (with the notable exception of more bond rejection), I wanted to put some thoughts "out there" with hopes that it adds to your process.
From a purely objective view, there's little edge in gaming the next leg of our journey. The sideways action of the last month has placed us smack dab in the middle of a trading range. With the aggregate economic data showing an "ever so slight" improvement, the bulls are again proclaiming that we've only just begun. With the liquidity injection and "plunge protection" supporting their view, there is the potential that the next leg is higher.
While I respect the bull's pull--they've earned it--I am growing increasingly concerned that the brazen bovine will soon have egg on their face. Nothing "new" has emerged...the complacency, bullishness and bravado have been in place for a while. However, I keep coming back to the multi-year head and shoulder neckline (resistance), sentiment that's manicy and panicky, valuations (that have historically accompanied tops rather than bottoms) and hopeful masses who are convinced that this time is, indeed, different.
Yes, the action has been fabu. Sure, the fundies weren't a horror show. Granted, the world is a more peaceful place. That's all well and good and it can't be ignored. Still, if the market is forward looking, haven't these elements already been baked in the cake? And, if real estate is a lagging indicator, isn't it safe to say that the bear market hasn't even begun in housing? That's a staggering thought--if real estate goes, it's gonna take the consumer out of the picture faster than you can say "Wasn't Fannie Mae (FNM:NYSE) a $70 stock one day?"
I know--this is anecdotal and it hasn't mattered yet. My goal isn't to project my view and, as you're aware, this is simply one trader's humble opinion. I just needed to express this as I genuinely care and, if I didn't share, it would be inconsistent with the mission and scope of Minyanville. That doesn't mean I'm right--but it is surely how I feel.
As I pen this rant, the futes have taken another dip into the crimson tide. This particular column isn't just about today, per se, it's about keeping our eyes and minds wide open. We've all seen the carnage before and none of us want to revisit those gruesome times. Hope isn't a viable investment, however, and each Minyan should take a long, hard look at your time horizon, investment goals and risk profile. The answer will be unique to each of you, but regardless, it can't hurt to ask the same questions.
I'm gonna flip lids and tickle ticks as we edge into the home stretch. Before I go, I wanted to thank all of you who have taken the time to spread the critter word. Our readers are our lifeline and we appreciate the efforts of ye faithful Minyan. I would also like to thank you for your patience regarding the looming announcements. There's a heckuva lotta leg work going on behind the scenes and I trust you'll understand once we let the kitty out of the bag.
Have a peaceful night.
position in fnm
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