Randoms: Trade Today, See Tomorrow
By Todd Harrison Jul 21, 2009 12:20 pm
Asking "why" is more important than accepting "how".
- If you haven't read Mr. Practicals take on the state of earnings and the implications going forward, please do so-and pass it along to people you care about. It's no longer enough to ask "What?" Minyans are conditioned to ask "Why?" and this sniff hits the nail on the head.
- Is Turnaround Tuesday too obvious? Perhaps, but we'll trade it until it stops working. With a conscious nod that nobody has seen me and Clark W. Griswold in the same room at the same time this past week, my plan is to "trade around" my short-side bias, mitigate some risk (get smaller when you're not seeing seams) and slip back into the steady groove of discipline that served me in such good stead this year.
- I wasn't gonna say anything but as long as Jeff "Coops DeVille" admits to watching "Trannies", I'll share the same. Keep in mind that no one indicator-not "Dow Theory," not stochastics, not put/call, not levels, not breadth, not tells-will consistently tell the tale. That's why trading remains more of an art than a science.
- Is it me or are memory spans extremely short? I remember thinking after 9/11 that Wall Street was gonna pull together in a united fashion (which lasted a month or two).
- I remember thinking last winter that the Age of Austerity arrived like a clap of thunder and the point of recognition permeated (there's still a lot of denial out there).
- And I remember thinking that Wall Street, after years of financial engineering that brought the world to its knees, would emerge with new-found humility.
- Apple (AAPL) is up 85% from the March lows. While they notoriously sandbag their outlook, how much of the "fantastic, stellar" quarter (I'm projecting) is already baked into the cake?
- Pull this leg and it'll play Jingle Bells.
- "I sincerely hope that once we are past this recession, we will be able to restore some of the funding that was cut," said Senate President Darrell Steinberg, a Democrat from Sacramento, in response to the California budget deal, according to Bloomberg.
- What if this recession lasts a lot longer than anyone expects? What if "the probabilities of a prolonged socioeconomic malaise entirely more depressing than a recession are higher than most folks have factored into their risk assumptions," as we posited at MIM3 in Vail in 2006?
- While it may not "matter" given the mainstream perception of earnings (many of which were skewed by cost cutting, one time gains, tax breaks or inventory builds), shouldn't we keep that in the back of our keppe lest the dreaded double dip arrives?
- I mean, even if they bought the cancer and sold the car crash, won't recovery-by definition-take a lot longer than it otherwise might?
- In other news Calpers (The California Public Employees Retirement System) just announced that they lost 23.4% in 2008, the worse single-year drop ever, which feeds into the "Pension Panic and Puny Munis" we spoke about in this year's "Ten Themes."
- My mistake-no, the lesson-from last week was to call an audible and defer to mainstay market resistance rather than the defined risk levels in my underlying vehicles. I know I've mentioned this a few times but there's a reason for that-we learn more from what we've done wrong than what we do right.
- And we won't sweep it under the rug as some other financial platforms do. I'm a big believer that truth and trust are precious commodities and if you do the right thing long enough, someone will eventually take notice. That, in large part, is why the leaders coming out of this crisis won't be the same as those that enter it.
- Today's trade? There's a camp out there that believes "if they can't get 'em down, they're gonna jack 'em higher (and trigger the 'buy stops' on the other side of S&P 955). You don't have to agree with it, you just have to see it, respect it and factor it into your probability spectrum.
- While I "do, will and have," I'm not opposed to keeping some "underneath" September puts on the trading side of my pad. As I've been in "hit it to quit it" mode lately-and being honest, that's when I've performed best-I wanted to communicate the slight shift in stylistic approach.
- That doesn't mean I can't trade 'em both ways, of course, it simply means I sense risk is rising (and yes, I'm typically early).
- As always , I hope this finds you poppin', stoppin' and hoppin' like a rabbit.
The following was posted on the Buzz & Banter at 12:55 pm
- Is there something seriously wrong with me that the first thing I do when squaring off with my (black belt) kick-boxing trainer at 6:00 AM is provoke him to whack me? (it wakes me up)
- Did you know that Caterpillar (CAT) and Merck (MRK) are precisely 30 upside points in the DJIA today?
- But are you watching that former storm as they "temper" third quarter enthusiasm?
- Are you in a position to nibble lower and feed ducks higher?
- If KRS-1 was just the guy to lead a crew, wouldn't the crew still be rollin?
- How bout some snappage for our new Editor-In-Chief Kevin Depew on his latest vibage?
- Where are we in the denial-migration-panic curve?
- Is this yet another prime example of having a face for Radio?
- Y'all see NYSE internals edging 2:1 negative?
- Why does misery love company?
- Did you know that William Goldman (the talented dude that wrote Princess Bride) also wrote Misery?
- Will retail tell the true tale of the consumer?
- Old School Minyans will tell you the tape likes to get trippy when I'm away from the fray. Through that lens, what will Thursday and Friday bring?
- Just as the sharpest sell-offs occur during oversold conditions, don't the harshest updrafts happen while overbought?
- If the mechanics of your swing are sound, won't we be in the game long enough to earn a spot in the Hall of Fame (read: find our way to better days and easier trades)?
No positions in stocks mentioned.
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