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.

Random Thoughts: Wait, the Russell IS Down for the Year

By

Given we've got a financial fabric woven together with upwards of $500 trillion in derivatives it's sorta just a matter of time.

PrintPRINT
  • S&P 1490, former support, now becomes the attic floor. Technicals are but one of our four primary metrics but it's a context with which to view the dew and define risk.

  • Buck Melanoma, Moley Russell's Wart! There's alotta acrimony out there given we're still a stone's throw from all-time highs, eh? Imagine if the indices were down for the year.

  • Wait, the Russell IS down for the year, which is consistent with one of the ten themes we've been mapping.

  • What other themes are tracking? Gulp... alotta them. The Biggie that remains to be seen--other than Christopher Wallace--is whether the Hump Back market will play out.

  • While it has in the Russell, it hasn't in the broader proxies. I would venture to say, however, that if we see any sustained lift in the greenback, Boo will be going, going, back, back to Cali, Cali.

  • I did, as discussed, punt my S&P puts into the close yesterday as a function of discipline. The first probe was intuitive (following yesterday's Art Carnage) and now, well, it gets harder. Risk definition and proactive patience will serve you in good stead no matter where today's fray ends.

  • Minyan (and soon to be Professor) Peter is eyeing the Baltic Dry Index as a leading indicator for global economic growth. "If we are at the top of the global expansion," he offers, we could see an enormous seas change from here."

  • This, in a nutshell, sums up the risk vs. reward: The muck we've seen has been primarily related to residential real estate. Where this gets nosty is when it creeps into commercial real estate and consumer credit. Remember, the consumer is 70% of GDP.

  • Given we've got a financial fabric woven together with upwards of $500 trillion in derivatives-not to mention the fact that we're in a finance-based economy-it's sorta just a matter of time. Which is a lot easier to say versus nailing the timing!

  • Yes, we've been eyeing this for years but that's part of the problem. The effects have been cumulative, not transitory. And while we'll surely see sharp rallies and harsh sell-offs, we've perhaps reached the fulcrum where trading from the short side (selling to buy, vs. buying to sell) is the new tailwind. I think it is, at least until the bulls recapture the technical flag.

  • More Park Sausages Mom... PLEASE?!?!?

  • The Following Buzz took place between 10:00 AM and 11:00 AM…

    S-T-A. Why? Because we fear you. G-F-L When, I'd like to know. A-T-E

    Pop Quiz Minyans.
    Whataya get when you mix inflation (in things we need to feed, power and educate the world) with deflation (slower economic growth)?
    Stagflation*, which is to say that we're well on our way but historical precedence need not apply.

    Big Ben chimed in on the state of the world and, while he gets snaps for his honesty, he's not helping prevelent psychology. Not that he should, mind you....it sorta gets my craw when I hear that we "need" him and he should "save" us. Nobody--no one man, no one agenda--is bigger than the tape. It is what it is, and the sooner we recognize that, the better we'll be able to properly prepare.

    So what did he say? There are "important upside risks to inflation," that "strains have persisted," there are "downside risks to the growth forecast," "business and household spending may noticeably slow" and "mortgage deliquencies are gonna ride." He also said he would "act as needed," which needs to be noted as it'll be flown far and wide if the bulls can hold this wave of supply and turn the tide.

    I continue to see
    S's over N's (first time in a while) as money seems to be rotating out of high beta and tech. Along those lines, circle NDX 2060 for schnitz and giggles, if and when, and remain conscious that Hoofy is vulnerable under S&P 1490 (and S&P1483, which is the 200-day).

    I'm not pressing or guessing in here as I'm "long corks, short forks" for the time being. I continue to feel that risk persists but I'm trying to wrap my keppe around the timing of it all. I will offer that I'm looking at (but have yet to pull the trigger on) HBC puts with defined risk above $92. So you know.

    As always, I hope this finds you swell. How swell? Sweller than pork chops and applesauce.

    Swell.

  • Answers I Really Wanna Know...


    • If Giselle is gonna trigger a dollar rally, do we have to wait for a double bottom?

    • How's that gorilla that bought 200,000 QQQQ puts doing?

    • Aren't lower highs and lower lows considered a trend?

    • Did we need to see this flush in Google (GOOG) (-4%), Reasearch in Motion (RIMM) (-2%), Apple (AAPL) (-2%) and Baidu.com (BIDU) (-5%)?

    • What does the 30% downdraft in Sotheby's (BID) say about the resilience of the "haves"?

    • What is the thus far persistent positive breadth telling us?

    • Who knew so many people loved Grease?

    • And seriously, why hasn't John Cusack been in more movies?


R.P.


Holiday Festivus is here! Come join us and support the Ruby Peck Foundation For Children's Education at an old-fashioned Southern-style hoe-down in the heart of New York City on December 7th. Click the image below to learn more!

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