Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Tongue Twisters


The Fed is absolutely certain that they're uncertain. That's certainly comforting!

"'I slit the sheet, the sheet I slit, and on the slitted sheet I sit.' There. I've never been relaxed enough around anyone to say that."
--Navin R. Johnson, The Jerk

Alright, let's cut to the chase. Yesterday afternoon's FOMC minutes, which is a peek behind the Federal Reserve curtain, suggested that U.S. central bankers are, well, confused. But not just confused. They went so far as to say that there was increased uncertainty behind their decision to drop the tightening bias at their last meeting. And then-and this is the kicker-they offered that further policy firming might be necessary.

OK, we understand it's a tough nut to crack. Heck, we've been watching this Box Trot for a few years in the 'Ville. We've got inflation in things we need to power, educate and feed the world and deflation in things we want, such as plasmas, cell phones and laptops. Juxtapose that against a two-class society of "haves" and "have nots" and it's easy to understand why there is such a wide yawn between disparate points of view.

To add spice to the mix, the steady devaluation of the greenback (-30% since 2002) has been the catalyst behind the global asset class dance. That's a serious bummer to foreigners (they've made NO money holding dollar denominated assets) and it's likely the reason the Fed is attempting to placate those players. It's an intricate game of chess and the Queen is on the run.

I was having dinner last night with the lovely and talented Stephanie Pomboy from MacroMavens and offered that one of the first things I learned on the Street was to sell uncertainty. That, when in doubt, we're taught to wait it out until clarity emerges. She responded, tongue in cheek, that the uncertainty of the certainty is certainly certain. So, in that regard, we can take solace. The Fed is absolutely certain that they're uncertain. That's certainly comforting!

Marie Kimble Johnson once said that she didn't care about losing all the money, she just cared about losing all the stuff. I told her that she would be wise to carefully watch the market as we edge through earnings and towards expiration. We've been monitoring four levels of late-S&P 1450, GS 210, BKX 113.50 and HGX 118. The first two failed at resistance, the latter matters broke support (their 200-days). That's not technically healthy, nor is it particularly comforting during uncertain times when charts seem to self-fulfill.

What am I watching today? The banks and homies, again, along with breadth, the IYR (real-estate) dandruff, the retailers (reaction to same store sales), the dollar (slippy), emerging markets (they've been en fuego) and signs of rotation station (as opposed to outright migration). I do believe that there is gonna be some whippy trading in front of expiration and, as a slew of my S&P puts expire next week, I'll likely roll some of those out and remove the proverbial gun from my head.

Good luck today, Minyans, and stay away from those cans!
Position in SPX

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

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos