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Random Thoughts: What Does the Behavior in Financials Mean?


...has the tape acted great considering the financials or does the latter matter portend a slippy abyss?

  • I mean, I've heard of cutting your nose off to spite your face but this is ridiculous.

  • Slow day? Yeah right--pull this leg and it plays jingle bells! Following a brief stint over at AOL (for this weekend) and in the midst of our MV Kids launch, I'm desperately trying to wrap my head around the tape.

  • Jeff Saut the savvy soothsaying sommelier from Raymond James, always tells me that "you can't do two things at the same time." My response? "My brother, if I can get down to two things, it's a huge win!"

  • We don't do rumors in the 'Ville--no, really--but as three people hit me up with "I'm hearing that AIG (AIG) could take a $10 billion write-down in their structured products group" at the exact time the futures got hit for five handles (in the midst of a "slow" day), I felt compelled to share.

  • Facebook is worth $15 bln? I would love to endorse that valuation (ahead of Minyanville's social networking roll-out) but that's alotta dough.

  • Tenor Check? Skewed slightly Boo as breadth is 3:2 negative, the dollar (contra-tell) is lower, energy stocks can't rally with crude (watch this) and the SOX are playing smelly cat (SOX -3%).

  • Speaking of the semis, check out this chart. They're sitting on the trendline from the 2001--yes, 2001--lows.

  • My apologies to Minyan Ken "Big Papi" Klaiman, G-Hill and the rest of our fantastic Beantown Minyans. I simply cannot share your happiness on the BoSox. It's just... not happening.

  • Go Flinch! Are there any bears left that aren't conditioned to cover?

  • While that doesn't mean we shouldn't cover---wait, that's a double negative---er, while covering is often disciplined (see yesterday's forced nibbles), isn't this traditionally very bearish? Sorta like not wanting to buy?

  • Like in, I don't know... 2003?

  • Maybe I'm nuts but I love this week's Critter critique of Bank America. Beard... or no beard!

  • Professor Bennet's vibe on Aunt Ginnie, Uncle Freddie (FRE) and Aunt Fannie (FNM) (the other side of the family) sparked a thought. Remember that we were watching Freddie $55 as an important support level. Textbook technical analysis dictates that the time to initiate a position is on the retest of a level after it has broken either on the upside or the downside.

  • Case in point (and more recently), Merrill $65 was highlighted yesterday as multi-year support. and once breached, as it was like a hot knife through buttah, it quickly shifted from support to resistance. Those two levels now becomes an ursine backstop for those so inclined.

  • Answers I Really Wanna Know...

    • Countrywide Financial (CFC) (-8%) lost its Bar Mitzvah status?

    • Uh, does anyone else smell a $2 billion write-off in Bank America (BAC) coming?

    • Get it? Countrywide? Bank America? Convert at $18? Remember?

    • So... somebody please tell me... has the tape acted great considering the financials or does the latter matter portend a slippy abyss?

    • If the piggies don't lead the tape lower, is this officially a new paradigm?

    • Or just, uh... Suspect?

    • $15 billion? Really?

    • Does anyone else feel like Monday to Friday is one long day?

    • If we trade heavy through contra-hour, are back-to-back Snappers a long shot? (yep)

    • No, seriously... are we there yet?

  • No, But Seriously...

    I get the whole "the reaction to news is more important than the news itself" thing. Heck, I think I may have coined that phrase (I honestly don't remember). But that's not the point. Here's the point.

    The disconnect between perception and reality is massive. News is not good. I mean, I'm sorry--Merrill (MER) writing down $9 billion, Citigroup (C) earnings down almost 60%, residential real estate is crash... no, it's crashed, there's debt everywhere and sentiment was the third highest in history last week.

    I know that news is always best at the top and worst at the bottom but that's sorta the point. The news is worst... at the top. We're near all-time highs. The banks are at multi-year lows. This is a finance based economy. Is any of this making sense or am I eating a silly sandwich?

    So here's the thing. Either this is, indeed, a new paradigm (in that the banks don't lead the broader tape) or we've got a slippery slope in front of us. And, so it's said, I would be quick to offer the latter matter is at hand if it wasn't for the other hand.

    Sorry for the rant but I'm nothing if not honest. Well, honest and a little scared.


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