Randoms: The Box Trot!
The bulls try to rally the troops anew
Have you ever wondered why A.D.D. people aren't championship fighters? I may have figured it out this morning while kickboxing at 6:00 AM. After warming up, my trainer and I sparred a few rounds as we usually do and sure enough, my mind began to wander.
The pre-market S&P futes are up a dozen, I thought to myself. THWACK! A hook to the ear.
I shook it off, grunted and got back to basics.
Was the "first move" lower (after the FOMC) or given the market ended higher, will that pave the way to a reversal today?
POP! A poke to the nose.
"Dude, stop hitting me," I said as I shook my head, sweat flying to the floor.
"Pay attention then," he said with no hint of levity.
I went on the offensive and pulled together several combinations. Jab, jab, cross, hook, uppercut... Wal-Mart (WMT)? ZING! Right in the eye.
To say there's a lot going on now would be an understatement. To let it consume you at all hours? A waste, and a painful one at that.
Alas, here we are, strapped in and in the moment. Now is the time to focus, and focus I will.
First and foremost, if you were away from the fray yesterday, lemme quickly catch you up to speed in terms of my Hump Day content. There was:
- Memoirs of a Minyan: Sign of the Times, where I spoke about reaching my personal tipping point with Jim Cramer. I will say that as a person, I care greatly for the man but as a partner, the situation was untenable. Bubbles and bipolar conditions rarely mix and please understand I am coming from a place of empathy rather than acrimony.
Three Ways to Manage Risk, where I chewed through my current trading posture and offered alternatives on how to approach this critical technical juncture. There was also vibage on China, the dichotomy between credit and equities and some color on social mood and risk appetites.
We spoke about the Curious Action into the FOMC and raised an eyebrow at the parabolic frolic out of yesterday's gate. The tightrope fastened between what stateside investors wanted to hear and foreign holders of dollar-denominated assets needed to hear.
With that context in place---to appreciate where we are, we must understand how we got here--I offer the following top-line vibes as we edge into the Thursday Dew.
- John Paulson is a sharp cookie, no doubt, but I would venture to guess that his purchase of 168,000,000 shares of Bank America (BAC) is (at least partially) responsible for the one-month 35% gain. Keep that in mind if you're following the smart monty.
The FASB will discuss fair-value accounting at their meeting today and while most don't expect any accounting modifications to "hit" until late 2009 or early 2010, we've seen this movie before. Remember, Minyanville caught a lot of heat for suggesting the world's largest banks and brokers were insolvent in November 2007. It's always a conspiracy theory until it's not.
Seeing both sides, Hoofy continues to monitor the tech channel (let's use NDX 1480-1630) as a bullish basing that's working off the overbought condition as a function of time rather than price.
Through objective eyes, the longer we slither sideways, the better it is for the bulls (year-end performance anxiety will soon begin to creep into the collective consciousness).
While I'm clearly concerned about the human toll of the swine flu, I'm equally conscience of the economic toll. Case in point India, where thousands of schools, colleges and cinemas shut down in and around Mumbai.
The dollar--a necessary precursor to, but no guarantor of, higher asset classes must also be factored into the mix.
For my part, I'm attempting to keep a loose grip on the handlebars, which is easier said than done in this high stakes game of chicken. In the two weeks since I slapped on this position at COMP 2007 (precisely where we are now), I've twice nibbled on exposure at NDX 1600 and tethered it back out at 1630. Just tradin'.
As always, I hope this finds you well.
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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