Freaky Friday Potpourri: Of Jobs and Jobs
Headlines collide on the final fifth of a freaky week.
The final fifth of our freaky week begins with a bang as dualities of jobs collide on Wall Street. To the left, we've got payroll data that significantly beat expectations and to the right, the visionary of Apple (AAPL) returns to his rightful helm. There's lots going on so let's dive in and see which side of the critter equation is gonna get jobbed.
Yesterday afternoon on the Buzz, I offered the following vibes as we edged through contra-hour:
There's no denying that the "eyes" are constructive-there's been a steady underlying bid, we've spoken about performance anxiety, central banks are creating kitchen sinks to throw at the tape and the improvement in corporate credit must be respected regardless of your bias. Adding spice to the mix is my (and other professor's) sense that an upside surprise is possible tomorrow as conventional wisdom is dour on unemployment.
There are two schools of thought with regard to short-term exposure. Get out of the way and let the market do what the market will do (I would rather short good news tomorrow) or hold steady with an eye towards the technical construct (which could be flawed with many people are now focusing on it). Where you stand is a function of where you sit.
I've been schooled to sell hope and buy despair. When Hoofy was stopped out against Armageddon in March, my trading bent was as bullish as can be (although I was penny wise and pound foolish with my long-term holdings). Now, with the S&P up 11 out of 13 weeks (that's an .850 batting average for those keeping score at home) and critical resistance above, I'm suspect of the up, up and away scenario (which doesn't mean it can't happen).
Bottom line, if you're in doubt, wait it out or trade a bit "in between." That's how I'm approaching this juncture, leaning short but no great shakes as a percentage of my overall portfolio. As an active trader who makes his living in the nuts and guts, there are plenty of opportunities to stick and move and find a groove. Not all Minyans employ the same stylistic approach, but we're hopeful that sharing our fare in real-time lends value to your decision making process.
Fast-forward to today's Breakfast with Beeks. Non-farm payrolls only declined by 345,000 vs. estimates of 520,000 and higher whispers. The trick to the trade is whether one of Wall Street's oldest adages comes into play.
News that's bad (but not horrid) is bought in oversold tapes while news that is good (but not great) is sold in extended markets. Toss in the proximity of S&P 950 (drawn with a crayon, not a pencil) and we've got more to this market than meets the eye.
I want to watch the action this morning, particularly the dollar, which is jamming higher. While "asset class deflation vs. dollar devaluation" is a big picture bent, it warrants consideration as edge together down this prickly path.
We also need to watch the financials, particularly with the aforementioned pennant formation percolating. With a "walk off" brewing at Citigroup (C) and a shake-up at Bank America (BAC), we mustn't forget the fragility of the system itself.
While I have a sense of what 2009 will look like, discipline must always trump conviction. One of the costliest lessons I've learned in my career is never to let an opinion get in the way of making money. That can take many shapes and forms but at the end of the day, the definition of an investment can never be a trade gone awry.
Keep your head up, thoughts positive and eyes open for this Friday could very well get freaky.
Some End-of-Week Answers I Really Wanna Know...
Is it possible to share how proud I am of Pepe Depew's evolution as a writer without coming across as condescending?
Is the meaning of life to have a life of meaning?
Isn't it ironic that when one of our young summer interns walked into my office yesterday to tell me there's pizza in the conference room, I responded by saying "I need a slice of pizza like I need another hole in my head?"
And I actually have another hole in my head?
(Courtesy of Minyan Medha): "Did you see Jim Rogers on CNBC say he has zero shorts? Fleck and Fred Hickey have no shorts either? What does that say? Kinda hard to go against these guys; or is it that everyone has given up and hence a contra indicator?"
Do you see the flags flying in the homebuilders (which were little pink houses yesterday?
If you were listing the top five movies of all time and had a choice of Fletch, Animal House, Princess Bride, Fast Times at Ridgemont High, Caddyshack, Uncle Buck, Young Frankenstein, Goodfellas, The Jerk and Dirty Rotten Scoundrels, which ones would be left on the cutting room floor?
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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