Randoms: Is Ben Bernanke a Contrary Indicator?
Take the Beltway with a grain of salt.
Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also How Many Are Hiding in Gold and A Slice of Humble Pie.
Gate Sniffage! - 9:55 am
- Have you sniffed Jeff "Coops DeVille" Cooper's excellent morning report? He makes some salient points with regard to buying strength vs. buying weakness, along with downside targets if Hoofy can't hold the fort.
- Is the emergence of "short tutorials" a precursor to a rally?
- Every day's a new day, that's what I've been told (even though I can't for the life of me find Don Henley's Shangri-La on YouTube).
- Still, with that tune in mind and lessons in tow, I'm approaching today's trade with a fresh P&L and an open-mind. That includes "buying dips and selling blips" vs. yesterday's close as opposed to my entry point.
- The single biggest fly in this try? General Electric (GE). We've been warning Minyans about financials in drag for years--and I again flagged this name yesterday on the panel--and it trades like it's got more issues than my therapist's notepad. I'm not touching it either way but I'm most certainly watching it.
- Elliot Wave International's Robert Prechter is advising clients to cover their shorts. I can't for the life of me decide if that's very bullish or extremely bearish.
- I'm jammier than a Smucker's factory. I'll be back.
Parliament? Big Ben! Parliament? Big Ben! - 10:30 am
Soooo, Mr. Bernanke offers that we'll see a 2010 recovery "only if" markets and bank stabilizes.
In other news, I'll weigh less than 200 lbs "only if" I eat better and work out.
The Raiders will win the Super Bowl "only if" they beat other teams.
Syracuse will win the National Championship "only if" they don't lose in March.
The sun will shine..."only if" there are no clouds.
He went on to offer that "signficant stresses" persist in many markets (thanks Scoop), the full recovery will take more than 2-to-3 years (this Minyans know but it's the first I've heard him admit it) and the Fed is committed to using all available tools (and inventing more if they don't work).
In terms of the tape, we've retreated back to the flat line as the markets watch American Grandstand. I made some sales into the lift (again, I'm trading today's P&L, not trying to make back everything lost yesterday in one swing) and I'm keeping a watchful eye on S&P 741 as per Pepe.
As it stands, N's over S's with General Electric (GE) playing Jeff Goldblum as The Fly in today's try.
I'll be back.
Two Questions I Really, Really Wanna Know... - 10: 55 am
First, and perhaps most importantly, does anyone else sense that President Allison Taylor's Chief of Staff Ethan Kanin is crooked?
Does anyone remember April 24th, 2007? The S&P was trading at 1483, the Dow Jones was at 13,060, the NDX was at 1883 and the BKX was at 117.
It was also the day that Minyanville's Kevin Depew recapped the chorus of policy makers who offered that sub-prime mortgages were contained. And I quote:
"I'm waking up less at night than I was [over the slowdown in housing]. So far, there's been remarkably little effect [from housing] on the rest of the economy." --Jannet Yellen
"At this juncture...the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained." --Ben Bernanke
"The damage from the subprime market has been largely contained." --Richard Fisher
"I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained." --Hank Paulson
"We do see some stabilization of demand in the housing market ... there is some indication that the market could be bottoming out." --Frederic Mishkin
What's my point?
Take everything you hear on the hill with a grain of salt, including any sudden sounding of alarms. The Chairman of our Federal Reserve--along with numerous other government officials--assured us that there was nothing to worry about when the banks were 80% higher than current levels.
"Hear" it all but think for yourself. That's been the steady beat of Minyanville through the years and it will continue to serve you in good stead.
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 email@example.com.
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