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Random Thoughts: Homies and Banks Year-End Trade


The most obvious trade is laggage in the homies and banks into year-end and a trading bounce thereafter.

  • The most obvious trade is laggage in the homies and banks into year-end and a trading bounce thereafter. The question, quite naturally, is whether it's too obvious.

  • For my part, so it's said and so you know, I'm trading less as a function of my looming respite (next week) and the Beta launches of Minyanland and The Exchange. I will, as always, share my eyes with hopes they lend value (just please give them back so I can find my way to the airport).

  • My niece and nephew Maia and Bradley are in the 'Ville today punch-testing Minyanland. I'll tell ya, there just aren't many things better than the sound of children's laughter. I've gotta get me some of those one day.

  • How important is this juncture in the S&P? Through a technical lens, pretty important considering the confluence of moving averages and the trendline of lower highs. It's but one of four primary metrics, we know, but in the absence of alternative catalysts, traders tend to pay more attention.

  • It's alright to have a big picture bent and equally cool to trade the short-term nuances. Just don't confuse the two as the syncing of time horizon and risk profile is one of the tricks of our trade.

  • First there was the boom and then there was the real estate boom. Would you really be that surprised to see virtual real estate follow suit?

  • The single most bearish thing on my screen? VXO 20. We talked through why volatilities are coming in this morning but it's starting to edge towards "disconnect" territory anew.

  • In Tellsville, we've got 2:1 negative internals, a weaker dollar (which could be good for asset classes such as energy and metals), beta perking up and little pink houses for you and me.

  • I would also keep an eye on Goldman (GS), which is all-of-a-sudden acting dry.

  • Citigroup $30 should be tossed on ye radar as a level of lore into year-end. If this breaks, the banks will follow. And as goes the piggies, so goes the poke.

  • If you haven't seen Hoofy and Boo's CEO gift list, check it out!

  • Answers I Really Wanna Know…

    • What show had a catchier theme song, Different Strokes or The Facts of Life?

    • Are you trading or forcing?

    • How far will foreigners allow the dollar to fall?

    • After all, given the choice between hyper-inflation and watershed deflation, isn't it clear which way our policy makers will steer?

    • Have you turned on your little ones to Minyanland yet?

    • What will the other side of zero-percent financing look like?

    • How long can one person possibly have a cold for?

    • As sovereign funds have money, banks need capital and the dollar is off 36% since 2002, don't these capital infusions make sense?

    • But what happens when another round of money is needed?

    • Isn't that when this political hot potato will begin to mash?

    • And how long will it be before hedge funds start acquiring investment banks?


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