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Monday Morning Quarterback: The Post-Expiration Hangover

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No rest for the weary.

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Good morning and welcome back to the flickering pack. With the weekend in the rear-view mirror and Memorial Day straight ahead, we power up this frisky pup to see what Hoofy has in his tank. I hope for his sake it's full for even the most brazen bovine would wince if forced to fill up!

The bulls have been looking for technical affirmation and last week was a strong-albeit far from omnipotent-step. The four corners of resistance (S&P 1405, NDX 2000, DJIA 12000, Russell 735) have morphed to support and they'll be levels to watch should the wheels wobble on the wagon.

Boo is quick to note that expiration may have played a hand in the stickiness and that bears watching as we shake off the hangover. He would also draw your attention to the lower highs in the mainstay averages despite the steady uptrend that began in March. There are two sides to every story, we know, with the residual grist setting the price and shaping the news.

While some follow through wouldn't shock me in front of Turnaround Tuesday, the meat of my current positioning is skewed short the energy complex. Nothing crazy, mind you-catching cusps is a dangerous way to make a living-but that's my hand as we kick off the week. I'll delve a bit deeper into the thought process in the days ahead with a conscious nod that I'm typically early.

Away from those positions, which include Halliburton (HAL) puts, USO puts and Continental (CAL) calls, I continue to "trade around" the papers (Gannett (GCI)) and McClatchey (MNI)) from the long side (I pared in the former after the nice run and nibbled anew on MNI late Friday). I've also got a snivlet of Apple (AAPL) puts (just trading with a tight leash), VIX calls (just trying) and other "situational" risk.

Lots going on and no rest for the weary so lemme share some Random Thoughts and we'll get this party started right.

  • The NASDAQ finished the week above the 200-day moving average. If the S&P and DJIA can follow suit, it would be another feather in the Matador City technical headdress.

  • Alotta folks are pointing to the Mid-Caps and Trannies as bullish signals for the broader tape. You can't argue with how well they've acted but you should note that resistance looms into 890 and 5450, respectively.

  • Consumer confidence at the lowest level since 1980! 1980? To put that in perspective, Jessica Simpson, Gisele Bundchen and Michael Vick were born that year!

  • Somebody call Meredith Grey! An old fashioned 'Fest is scheduled for next Tuesday at 4:00 PST at the Revolution Bar & Grill at the Experience Music Project. Area Minyans are welcome for some hugs and handshakes!

  • Does anyone else think that the NASDAQ futures should be higher given the Goldman Sachs upgrade of the semis? The fact that they're not my be telling with the benefit of hindsight.

  • The VXO is at levels last seen in October. Volatility is the opposite of liquidity, we know, and the trillion dollar (plus) Federal infusion is certainly factoring into the equation. Still, I remain of the opinion that "long vol" is a winning trade at these levels.

  • Long metals may be a good hedge against short energy for those looking to mitigate geopolitical risk.

  • Mas Snaps to Laurie Peterson, GM of MV Family Entertainment, and everyone on her team for blowing estimates on Minyanland. Critter population, as of this morning, is 103,550 and growing by the minute. Our vision is to promote financial literacy with a smile from the ABC's to 401(k)'s and we're well on our way!

  • Funny, I was thinking of buying Amazon (AMZN) with the thought that folks will shop online rather than drive as a function of energy prices.

  • In housekeeping news, Alice doesn't live here anymore. Further to that, I'll be out Friday through Friday on a left coast swing as I commingle some business with a few smiles. Let's put some jingle in our jeans and hit the ground running into the unofficial start to summer!


R.P.

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Position in hal, uso, cal, gci, mni, aapl, vix
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