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Random Thoughts: Tiptoeing Towards Resistance!


The tape approaches S&P 950.

  • Much has been made about the recent rise in Treasury yields as an alternative investment option and potential headwind for equities. Seeing both sides, we must respect the attendant appetite for corporate credit (resulting in lower yields) as the summer heat thaws that space.

  • It looks like someone is playing the other side of our long watched Wishbone World.

  • My vacation reading material? Man's Search for Meaning by Viktor Frankl, which I highly recommend.

  • As the S&P extends into the meat of our aforementioned and long-watched resistance zone, it's worth noting that the financials (including Goldman Sachs (GS), JPMorgan (JPM), Wells Fargo (WFC) and Citigroup (C)) are struggling to find their way.

  • I don't do whippets but I would imagine they feel something like trying to equalize while you've got an ear infection. Seriously, crank up some Jerry, toss me a tie-dye and grab my Birkenstocks. This is trippy, dude.

  • While I'm playing smaller (knowing thyself, it typically takes me a few days to establish a rhythm), I've nibbled on some downside exposure in the S&P and Amazon (AMZN). Entry levels are "around" 940 and $81, respectively, and my vehicles are October paper for pure trades.

  • The risk for Boo and his bearish crew is that we've entered the final phase of denial-migration-panic as investors weigh corporate credit improvement and their underweight posture. I wouldn't know about being underweight but I know enough to manage risk rather than chase reward.

  • That baby monkey you saw in my opener is named Ollie and I miss him already. I'm tellin' ya, he and I could do some damage in the big city.

  • Trade to win. Never trade "not to lose."

  • As discussed this morning, a sharply higher Monday that takes the tape straight to S&P 950ish into Turnaround Tuesday is seemingly a spot for Boo to lick his paws. It might prove too easy but those ducks are starting to align.

  • I learned in 2003 that nobody is smarter than the market and I carry that lesson with me daily. That is why the mechanics of the swing always trump the results of the at-bat.

  • Over in Tea Leaves R' Us, breadth is 9:1 positive and beta holds a bid but the banks, while near session highs, continue to trade with distinct lethargy. And I'm watching the dollar, for we know that while a grubby greenback is no guarantor of higher asset class prices, it's a necessary precursor to them.

  • It's nice to be included behind the red velvet ropes of the DJIA but from a pure supply-demand standpoint, indexers won't need to buy all that much. Something to keep in mind.

  • Rugs are meant to be cut! NYC area Minyans be advised that we'll be gathering in force this Thursday at The Red Lion at 9PM to celebrate MV CMO Charlie Mangano's and MV COO Tom Eggers dual birthdays. Feel free to swing by but be forewarned--with all those candles, we may have a fire hazard!


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Positions in SPX, AMZN
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