Freaky Friday Random Thoughts
Keep an eye out for those four witches!
- A bond bear speaks.
- Was S&P 1225 holding Hoofy down yesterday (into September expiry?). Quite possibly--but with so many crosscurrents still in play throughout the day (S&P rebalancing), today's flava will feature further unforeseen ingredients. Watch our mainstay tells and remain respectful that alotta the motion will be triggered by stealth catalysts.
- We've been discussing gold of late and, in particular, the potential that it would take the sector leadership baton from the energy patch. Well, since the last week in August, Texas tea is off almost 10% while the yellow metal is 7% higher (and at a 17 year high). I continue to feel that these two teams will be perernial post season favorites for years to come. That doesn't mean that they won't slump--particularly when they get too popular--but the secular winds should remain in play.
- For the week ending Sept 14, AMG Data reported net equity inflows of $1.472 bln, or $833 mln ex-ETFs.
- Frank Barbera, a respected thinker in Minyanville, makes a case that a downside reversal is coming up quick.
- The apple doesn't fall far from the Beeks.
- The Federal Reserve Bank of New York met with representatives of 14 banks yesterday to discuss the credit derivatives market. There were $8.4 trillion such credit derivatives contracts outstanding at the end of last year, up from $919 billion just three years earlier, according to the International Swaps and Derivatives Association, a trade group, the New York Times said. The Federal Reserve called the meeting yesterday to address both a backlog in processing these trades as well as something called assignments, which refers to who holds the contracts at the time they are due. One banker who attended and insisted on anonymity because of the confidential nature of the meeting told the New York Times: "Regulators wanted to get everyone together to make sure the industry knew they were concerned. It was left to the industry to come back with solutions."
- Do you come from the links down under? Laurie shares a link with precious intentions.
- "Before the obvious causes of a sticky situation in equities develop, there is usually a shift, at times subtle, at times not, in the relationship between Gold and Financials. The environment supportive of one is usually of some detriment to the other, and though our indicator signaling such events is far from perfect, it has triggered a cautionary condition for stocks. The multi-year breakout in gold on Thursday has a little something to do with that, but so too does the weakness and potential head-and-shoulder formation developing on the Bank Index. The environment supportive of gold's strength is rarely good for financial assets, and that reflects itself most consistently in financials. The price action of financials is often reflective of price action in equities generally, so we believe it becomes an obvious, though often overlooked path." -- Lehman's aptly named Jeff DeGraaf
- From Russia with Love.
- In the wake of Katrina, from Washington to Wall Street.
"For many bankers, 30-60% of loans are in jeopardy.", C. R. (Randy) Cloutier, President and CEO, MidSouth Bank, NA, representing ICBA
"If the insurers have to pay, they may become insolvent. This is dangerous territory. The collateral and customers of banks may be gone. I'm afraid this will go on for decades.", Rep. Richard Baker (R-LA)
- Whadaya Shay?
- Mini-Minyan Mailbag
"I was watching the pre-market activity this morning and saw the ES was walked up over yesterday's high during the overnight session. At 7:30 the SPY was trading in the middle of yesterday's range and continued to do this as I send you this note. I am surprised by this big discrepancy and wonder if it has to do with option expiration or if the pre-market futures are just being gamed? Thank you for an informative platform! Minyan Tom"
And the SPY is still trading at a nominal price of 123.15, which was yesterday's close. This is because the SPY is trading ex-dividend of $.52. The SPY trades ex-dividend each quarterly expiration. So the SPY is really trading up .52/123.15 or .42%, in line with the ES.
- Warts are extra.
- The Texas Two-Step.
- BKX 96, if and when, is the trendline from early 2004 and the right shoulder of some broad based dandruff.
- "DeMark Indicators: I've had quite a few emails asking for resources on DeMark indicators. For those looking for an initial overview of DeMark indicators, this article is useful. Otherwise, the best resource is the man himself through his books, The New Science of Technical Analysis, and New Market Timing Techniques: Innovative Studies in Market Rhythm & Price Exhaustion." -- Pepe Depew on yesterday's late Buzz.
- Watch the Mother Chip (INTC) as she dances at her 200-day.
Last night's final Buzz (because it's important):
First things First...
S&P 1225 is the loop around today's fruit and it seems as if we'll finish the fray not far from that level. The "cuffs" will come off the indices tomorrow morning before the bowling game starts in individual issues.
Please keep in mind--again--that August was a tough month for the fundies so preannouncements wouldn't be a complete shocka.
And then there's this...
Alotta folks were intrigued by the link we shared earlier and the overwhelming question was "So what should we do?" It's a question I ask myself often and while I don't profess to have any answers, I'll share my intended course of action.
Enjoy each day.
Take nothing for granted.
Tell those close to us how we feel.
Don't be so hard on ourselves.
Act in a manner consistent with who we believe we are.
Have no regrets.
Be kind to strangers.
Give something back to those less fortunate.
Don't let petty differences affect great friendships.
Dream big and reach high.
The purpose of the journey is the journey itself, Minyans, so take a deep breath and enjoy it. I know it's hard out there--you see it, I see it, we all feel it. But if we spend our time stressing rather than balancing, we have only ourselves to blame for lost opportunities and missed smiles.
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 firstname.lastname@example.org.
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