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Random Thoughts: A Wild Fourth Quarter Ahead

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Equities and commodities have rallied tick-for-tick. Either this is a fabu equity ursine wink or we're about to see a divergence.

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  • THE question going forward is whether the slippage in commodities is a rest or a reversal.

  • If the whole "asset class deflation vs. dollar devaluation" thing is in fact true-in the context of a relatively strong dollar--it will portend a leg lower for stocks.

  • Think about that. Equities and commodities have rallied tick-for-tick. Either this is a fabu equity ursine wink or we're about to see a divergence.

  • The udder side of that trade? Rotation into the laggards that are the financials and homies. That's the bull case and, thus far, that's what we're seeing (HGX +2.5%).

  • How am I doing when the highlight of my day is the anticipation of my matzah ball soup?

  • This fourth quarter is shaping up to be the nuttiest strut of my career. Not complaining, just explaining. Time management has never been my strong suit but it's never to late to learn, eh?

  • Minyan Michael muses that nobody--NOBODY--is expecting the ECB to cut rates on Thursday.

  • Would that spark the tape higher still or rally the dollar which, according to our oft-mentioned lens, would be asset class negative?

  • Minyan Peter, the former treasurer of one the biggest banks in the Midwest , concurs on the dollar lens. He's a sharp cookie and I, for one, am glad that we're pitching our thought tent in the same camp.

  • Interesting how quick folks were to ignore Elmer's bubble vibes yesterday. You don't gotta twist my arm to question his deity status---his legacy is living on borrowed time, in my view--and, after irrational exuberance (1996), previous China worries (May) and the summer recession impression, the legend is fading.

  • Still, the very fact that folks have put the China Rider in the 'pay no mind' club may be reason, in and of itself, to pay attention.

  • Particularly with the FXI up 73% since August.

  • The most bullish thing on my screen? That would be the banks and homies.

  • The most bearish thing? Commodities and the dollar. The flattish thing? Breadth.

  • The Sweetest Thing? Sa-weet!

  • Minyan Mailbag

    Toddo:

    In November 2004-was that really three years ago?-I bought to the Ville's attention the story of Julianna Wetmore, a then 2 year old little girl who was born with Treacher Collins Syndrome. This is a disease where a child is born without all the bones in his or her face. Julianna's case is the worst case ever recorded, lacking 50% of bones.

    You were gracious enough to put her story on the Ville' and the community responded as a caring community should. In one week, we raised $2900 that was mailed to the Wetmore family. Well here is an update (please be warned, the video can be a little bit disturbing).

    It is very heartwarming and extremely pleasing to see how well she it doing.

    To keep up with the situation on a more constant basis, Minyans can click here.

    Thanks for MV and congrats on 5 years!

    Minyan Neal

  • The following Buzz appeared between 12:00 and 1:00...

    Piggies and the Poke


    We've been highlighting the piggies as a proxy for the poke and, while there are structural (FED), fundamental (the bulls will argue the news is worst at the bottom) and psychological (lower rates, buy banks!) influences in play, technicals continue to offer a contextual backdrop with which to trade.

    Along those lines, please keep an eye on the BKX 111.50 (we have some room) and XBD 242, 243.50 (200-day) and 250 (head & shoulder breakdown) as the next best levels in our midst.

    And while the world feels great--bowling averages are way up, mini-golf scores are way down--remember that unless this pair gets on their horse, the all-important financials will be offering a classic non-confirmation of the recent rally.

    Clues are always most evident with the benefit of hindsight but profits are procured as a function of foresight.


R.P.

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