Random Thoughts: The Bailout Bounce or Ursine Trounce?
Will the specter of government aid prop the markets before the deal is announced?
- As fantastic as last year's David Tyree-inspired Giant victory was, this may have been the Super Bowl I've ever seen (not to mention a rocking performance by the Boss). It's nice to know that in our uncertain world, there are certain elements of normalcy we can rely upon.
- With a conscious nod that the path of maximum frustration is typically littered with false breaks and empty promises, please keep half an eye peeled to INDU 7875. Through a broader lens, S&P 800 also remains a level of lore.
- Well the first days are the hardest days and the best fades are the toughest trades.
- After paring some exposure late Friday, I again dipped my wick on the long side this morning-discussed real-time on the Buzz & Banter-adding Mother Morgan (MS), Wells Fargo (WFC), the juiced S&P (SSO) and Bank of America (BAC) into the abyss.
- The mechanics of the swing trump the result of the at-bat. As such, as I "caught fades" (read: at lower prices) on the opening, I've slapped trailing stops on that incremental exposure at my entry points and will trail them as a function of price.
- Might as well face it I'm addicted to cusps! For years, as the financials were at all-time highs, I took the "other side" for a trade.
- Now, with the entire industry being fitted for toe tags, I'm playing the mirror image or that scrimmage. Many of these names may indeed be nationalized, I simply don't foresee it happening right out of the West Wing gate.
- Early eyes? "N's over S's' (semis and beta over banks and industrials).
- As discussed, expected and on par for the course, there are glitches and twitches with the new and improved Minyanville. Please give us a few days to bang 'em out.
- Wasn't it Jeff Saut who said at Ojai that the next World War would be fought over water rather than oil?
- The Great Debate in the marketplace these days seems to center on where mark-to-markets will be, uh, marked when they're transferred from private hands to the government balance sheet.
- Given this is a "bail out," my sense is they should be marked in the ballpark of where they can currently be sold. Appreciation from these levels should have a claw back for the banks but, ultimately, benefit the taxpayers whose money is at risk.
- You'll never catch a clean fish in dirty water.
- Goldman (GS) came out on Friday saying that the market is 'dead money' until a comprehensive plan was passed. I would counter that the market, as a forward-looking discounting mechanism, will rally ahead of a perceived catalyst. Considering that everyone now believes these plans are futile-and they well might be, with time-the notion of a sticky lift increases in kind.
- Note the relative traction in the master beta complex -- Amazon (AMZN), Google (GOOG), Research in Motion (RIMM) and Apple (AAPL) -- all trade with a decent bid. It's early-and NYSE internals are 2:1 negative-but it's a data point worth noting through the lens of "N's over S's."
- Speaking with a friend of mine who works with a "best in breed" NYC hotel, I'm told that occupancy rates are at all-time lows near 25%. Not a shocker, perhaps, but it speaks to the ripple effect of our new world order and the "reverse industrial revolution" that is forcing every sector of the economy to rethink their model.
- Without doubt, this is one of the greatest tributes ever assembled. Rock on, Stevie Ray!
- I wonder if Sally Struthers, er, Suzanne Somers would approve?
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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