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No Watershed Solution For the Market

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Opportunities are made up easier than losses.

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Some would say I was a lost man in a lost world
You could say I lost my faith in the people on TV
You could say I'd lost my belief in our politicians
They all seemed like game show hosts to me

(Sting)


It's nosty out there, Auntie Em, as the Minx melts into the weekend. I had to do a double take when I looked at my trusty charts because it felt like this has been a fugly five session span when, in reality, the price action in the mainstay fray has been marginally negative.

While we've seen more swings than a Hedonism vacation, the S&P has exhibited textbook churn under previous support and current resistance at S&P 1490. I, for one, was gonna lean against that level (on the short-side) but it didn't arrive. Ce la vie and new things next. Opportunities are made up easier than losses.

I was huddlin' with President Fish this afternoon about Minyan matters and stepped back to my turret to find a plethora of emails and instant messages about people "panicking" on financial television. As I wasn't watching, I can't comment on what was said but will offer is that the time to understand the credit conundrum was in the days, weeks and, yes, years before it began to manifest.

Yes, we're often early in Minyanville but we like to say that we offer the financial news you need to know before you know you need it. With Bear Stearns (BSC) off 30% this summer, it's easy to point fingers and make accusations. The time to proactively position, however, was in front of that move. Like, say, May, when Professor John Succo started a long thread of education on the risks of CDO's and mortgage debt.

We're not taking a shot or rubbing salt---that's never been Minyanville's style--we're just asking that you keep things in perspective. It's wild, wooly and very thin out there, a marked difference from the conditioned complacency and low volatility that alotta traders and investors are used to. Adapt your style to the tape and play a bit smaller until the smoke clears.

In response to queries about whether the Fed can "save" us, I'll offer that, while we would likely see a sharp knee-jerk Snapper, there is no watershed solution. We, the people, have made our bed with massive spending, incessant borrowing and no saving. It's the "other side" of the immediate gratification, A.D.D society. The Fed simply served to prolong the prognosis by shocking the patient through fiscal and monetary stimuli.

Look at it this way, the dot.com bubble burst and it left tech in its wake (NDX 5000 anyone)? Real Estate was next and the ripples are still being felt by homeowners. If the debt bubble has indeed cracked--like it feels it has--it's gonna be a long and arduous process. I'm don't wanna be a Debbie Downer, I'm just trying to be realistic. The FOMC isn't without blame but they're certainly not the cause.

Please make your own decisions as you're the one who will reap the reward or bear the consequences. It's one thing for someone to scream that the DJIA will be 1000 points higher in one breath and suggest financial armageddon a few days later. It's an entirely different thing to base your financial decisions on those assertions.

Have a mindful weekend and make the most of our requisite respite. Tomorrow, as they say, is promised to nobody.

May peace be with you.

R.P.

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No positions in stocks mentioned.

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 todd@minyanville.com.

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.

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