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Minyan Mailbag: The Ramp Thesis


As we know, "bullish" and "bearish" are relative terms and dependent upon a multitude of variables.


Your thoughts and insights are always well appreciated and I can't disagree with your analysis on weakness going into the fall, but my gut tells me we are going to ramp into the rest of the year. Of course, with that being said, discipline trumps conviction and if things turn sour I will switch sides in the blink of an eye.

I came to my ramp conclusion for a couple of reasons. First, years ending in 5 are always years with double digit positive returns, expect 2005 broke the pattern (to confuse me of course). The market does go down on average of 19% after the Fed finished tightening 75% of the time, but it does go up 25% of the time. I recently reviewed over 50 years of chart data and found several tells in the data which lead me to conclude that we ramp into the the rest of the year. I just want to put this out to you, thinking you could give me some good counter points.

Minyan Brent

Minyan Brent,

I'm not a big fan of the 'things that end with a 5' thesis--it sounds like a question on Jeopardy! And, so ya know, the "weakness into the fall" was the conclusion of the technical panel at MIM3 as opposed to an independent thought of mine. I'll always own my vibes but that one doesn't belong to me.

As far as the ramp thesis, yes--it could happen. As we know, "bullish" and "bearish" are relative terms and dependent upon a multitude of variables. For instance, is it bullish for the S&P to rally 15% and the dollar to drop 30% (as it has since 2002)? I suppose, in conventional terms, the answer would be yes. But in absolute terms, the equation becomes a bit murky.

In the spectrum of probabilities, a strong rally is a possible outcome. IF it happens, I would think that the CRB holds this line, the dollar drops further and the homebuilders lead (after the organic 2:1 split we've seen). Am I betting that way? Nope. I'm trading a bit more tactically (long gamma at these levels) and my gut, for what it's worth, is that the meat of this rally (or this leg of the rally) is behind us.

Thanks--and good luck cookie.


No positions in stocks mentioned.

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

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