Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Trench Town Rock

By

Please be careful not to trade equities purely as a function of the energy action.

PrintPRINT

Good morning and welcome back to the saddle. Perhaps a time out was just what we needed as traders absorb the week that preceded. There's a lot going on as the world continues to spin and, as the critters touched down in the states a few short hours ago, we're gonna share some quick vibes to kick off our fresh set of flickering ticks.

There is a growing chasm of interpretation regarding in the aftermath of Hurricane Katrina. The Matador Crowd staunchly believes that the rebuilding effort will buoy an already vibrant economy and add some zest to Hoofy's quest. On the other side of the tracks, the Red Dye contingent views the (dual demand and supply) shocks in energy as a potential tipping point between perception to an increasingly uneasy -and some say, unavoidable--reality.

As we discussed last week, the bear side of the equation is predicated on two tenets-economic drag and the structural underpinnings. The trick to this unfolding trade is allowing for the potential for both while understanding that neither will be immediately apparent. There's little doubt that the stealth tightening (crude) will weigh on an already taxed consumer but that won't manifest in today's headlines. Likewise, if forced selling (by the insurers) is needed to finance claims in the Gulf Coast, we'll likely witness that in the price action rather than the media coverage.

Brian Reynolds notes that a large surge in corporate bond issuance will begin later this week. That, among many other hints and haunts, will provide clues as we collectively figure out this latest bout. I'll be watching our mainstay short-term tells-the internals, the financials (BKX 98/BIKX 100), beta, small caps and the macro migration-for guidance. And, as a framework, our technical levels remain very much in tact as we emerge from the summer bummer that was August.

I powered into Labor Day with a few thoughts floating around my crowded keppe. I sensed that crude might have exhausted its '05 rally near $70ish/brl (a vibe that was a day early but thus far in tact). I also mused that the dollar could be facing multiple headwinds and further devaluation. And I offered that, while the Minx is exhibiting impressive moxie in the face of uncertainty, the onus is on Hoofy to once again prove that he's got the upside Motts (read: rallies may be fadable).

On a more important note, I would like to thank ye faithful for the outstanding effort in aiding those suffering in the wake of Katrina. We began a drive on Thursday (100% of any money raised by the Ruby Peck Foundation in September will be donated directly to the cause) and the response has been incredible. No pledge is too small and each gesture is greatly appreciated as Minyans continue to do our part and give something back.


Thank you ever so much and have a fantastic week!


R.P.

< Previous
  • 1
Next >
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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE