Will Bulls See A Retest of Recent Lows?
Is this the comeuppance that has been building since the back of the tech bubble?
Editor's Note: This content was conjured by Toddo this afternoon in real time. It is being reposted here for the benefit of the Minyanville community.
Lunch Meat! - 12:24 pm
- Yeah, I'm a New Yorker. Sure, I despise the Pats. If you cut me, however, I'll bleed silver and black.
- I remember when I was in San Diego for the Raider Bowl and found out Barrett Robbins flew the coop (not to mention witnessing some late night antics of Charles Woodson)... and the line didn't budge from 14.5. I almost laid mas wood on the Bucs but couldn't pull the trigger. Sigh and sigher.
- As I pull together some vibes for tomorrow morning's "1998 vs. 2001" column, I came across this article from December. It's as pertinent now as it was then.
- In this corner, we have the action in MBIA (MBI) and Ambac (ABK), with their entourage of homies. In this corner, Daaaaaaaaa Cruuuuuuusha that is the banks. They've been offered all day which, when coupled with 3:1 negative internals and overhead resistance, puts the ball in Brandon "Boo" Jacob's paws.
- American Express (AXP) is playing hardball with its fees. Homeowners are walking away rather than paying. I overheard someone in the gym saying that he was just offered his house back at $350,000 after recently selling it at $500,000. All of these are anecdotal assurances of the social mood and risk appetite changes we've been talking about for a while.
- I sold enough pharma to be in a position to add lower. Given DRG 320, however, I'll only do so if I have some shorts (financials) against 'em. You can't spend relative performance.
- Back on the hamster wheel. As always, I hope this finds you well.
Hit me again Ike, and this time put some STANK on it! - 1:53 pm
Deep breaths abound as we slip and slide to session lows. I'll tell ya, this writing thang takes up time! If I focused squarely on trading and stayed away from the light, I would likely have more jingle in my jeans. I'm not complaining--I made a commitment to the 'Ville--but my risk profile is muted. That's a good thing, but it can also be a bad thing.
I offer these thoughts as I've spent a fair amount of time weighing the current fray in front of tomorrow's opener. The tetherball in my head is whether this is 1998 (before lift-of) or 2001 (into the abyss). Minyans likely know which way I'm leaning but suffice to say that another year has crept into my consciousness. It's not likely (outliers never are) but, if the stars align, it's certainly possible.
Alas, I wouldn't wanna spoil the surprise so I'm turning my attention back on track. As it stands, the laws of inertia remain in play as the funky financials are validating our vibes that the latest lift, snazzy as it was, is bear market action. Narrow leadership, straight shot to resistance, sucking everyone in. Brutal, brothers and sisters.
I offer that, of course, in the context of light and tight exposure. I haven't sold any of my Citi (C) puts today but as I just mentioned it, I must honor thy maiden and feed some ducks. As mentioned earlier, I sold enough pharma (into DRG 320 and S&P 1405) that I'm comfy with the stems and seeds that remain on my sheets. And no, I haven't started adding back to that shack either.
Discipline over conviction, Minyans, and never let the definition of an investment be a trade gone awry.
Answers I Really Wanna Know... - 2:55 pm
- Where oh where has the PPT gone, oh where oh where can it be?
- Have you taken the MV Slacker Quiz?
- Is the best case bull scenario a successful retest of the recent lows?
- With positive non-confirmations?
- And the election year and Olympics moving into the mainstream consciousness?
- Or is this the comeuppance that has been building since the back of the tech bubble, masked by debt dependency, hidden by the lower dollar and skewed by a slimming margin of society?
- Why does dancing on the head of a pin come to mind?
- More Minyanland press?
- How the heck did Ahmad Bradshaw recover that fumble?
- Are you enjoying the journey?
- Am I?
- Does anyone still believe that lower crude equates to higher equities?
Bell Buzz - 3:42 pm
Oy vey is meir, it's Nosty (with a capital "N") out there today. While we "saw" this script--the lift off the lows and the rally straight into resistance--it doesn't alter the fact that it's a very difficult tape to trade. If you're a half a step ahead, you're too early. Half a step slow, you're lunch meat. Just right? You're Goldilocks, complete with the three bears.
A few quick thoughts as I juggle and jump and try to sneak in a haircut. And no, I'm not charged by the follicle, although I wish I were.
- This is the third time Baidu (BIDU) is testing the 200-day and you know what they say about subsequent probes and the alleviation of demand.
- The chatter on risk appetites and social mood continues to build. We've been ahead of this curve and collectively believe we've got a long road ahead. Just keep your head on--don't feel too good (bullish) after a rally or too negative after days like this. Toss the ball back to the mound and jog to the dugout.
- I have a AMEX black card (AXP) from back in the day and I'm flipping it for something entirely more austere. It has nothing to do with the fact that they're trying to enforce the $2500 annual fee, even for grandfathered members such as myself, it has to do with the shift in perception and my desire not to be 'that guy.'
- It took eight days to recapture 50% of the recent downdraft and one session to give back a third of that. Hey, it could be worse--we could be Europe, which is swinging upwards of 5% per session and is squarely in the first trimester of denial-migration-panic.
- Some odd lot just "took" 200,000 QQQQ February 41 puts. So you see it.
- On to the important stuff, we're sending mas white light to Minyan Jerry Mansbach.
- Avec celui, je vais me déconnecter et apprécier le voyage. J'espère que vous le frappez durement aujourd'hui et, l'une ou l'autre manière, celle vous apprécient le voyage cette soirée. La paix de mai soit avec toi.
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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