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Post FOMC Lift a Head Fake?

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With the first move typically being the false move, is this lift shaping up as a massive head fake?

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Editor's Note: Check out Todd's thoughts, posted this afternoon in real time. They are being republished here in the hopes that they benefit Minyans everywhere.


They're fueling their birds, we don't have time to mess around! - 1:29 pm

  • It's a market of stocks, not a stock market. Or, at least that's what I'm telling myself as I chew through my book ahead of the Fed. I'm leaning long but my concentration is in names I'll add on weakness.

  • 50/50 will provide a pop (to S&P 1405). Anything less will likely drop. Either way, I'm not gonna chase the race on the headline as a few deep breaths will go a long way.

  • You know what names have been pretty strong tells? Ambac (ABK) and MBIA (MBI), both of which are off 10% today (after a heckuva run!).

  • Hey, remember many moons ago when I used to talk about bringing the critters to life and creating a financial fitness franchise? It took a heckuva lot longer than I thought it would (and much more coin) but dreams do come true. Minyanland, baby, more steam!

  • Why is it that every FOMC day, I think of that scene in Crimson Tide? "May I have your attention please. Mr. Hunter has brought it to my attention that morale may be a bit low. That you may be a bit…on edge. So I suggest this. Any crew member who feels he can't handle the situation can leave the ship right now! Gentlemen, we're at DEFCON three, war is imminent. This is the captain, that is all."

  • And remind me to tell you about the "top of the market" moment I had with Gene Hackman in 2000. True story!

  • Fare ye well.


I Said A Boom Boom Boom, Lemme Hear Ya Say A-Yo, A-Yo! - 2:29 pm

  • Fitty-fitty, as they say in the sway, and it's game on in the City of Critters.

  • While I'm positioned for "this," I'm seasoned enough to ask "why?" rather than "what?"

  • That may not matter today but it's worthy of a ponder as we collectively find our way.

  • Be that as it may, this was the "safest" approach by the Fed and one that could conceivably spur the herd to S&P 1405.

  • I'm positioned that way for a pure trade and, with the benefit of time and price, I'll employ trailing stops. All I need now is to see some jig in the Schering Plough's (SGP), Merck's (MRK), Yahoo's (YHOO), Elan's (ELN) and Coca Cola's (KO) of the world!

  • These thoughts in the context of my firm belief that we're in the early innings of a multi-year debt unwind. I think it'll get much worse, I'm simply trying to dance between the elephants.

  • Time, price, perception, reality. My entire existence is a 4-D experience. With cartoons, for purposes of a little spice.

  • And yeah, so you know, I pulled the plug on the Phoenix trip. I couldn't justify it in my crowded keppe and I've got 120" of pure plasma pleasure ready, willing and able.

  • Go Raiders... er, Jints!


A Tale of Two Banks - 2:39 pm

See Bear Stearns (BSC) (-2.5%), which is acting like a spoiled redhead.

And note JP Morgan (JPM), which is (gasp!) looking at some acne.


Click to enlarge


Just in case you weren't confused enough...


Answers I Really Wanna Know... - 3:24 pm

  • Did Hank Paulson really just say that a strong dollar is in the nation's best interest?

  • Is a bad season in the Raider's best interest?

  • I mean, at least Oakland would get a draft pick?

  • If you looked up "frustration" in the financial dictionary, would you find "having the right feel on the market but the wrong vehicles to capture it?"

  • Outside of Schering (SGP) and Elan (ELN), which are starting to perk up?

  • Keep your winners, sell your sinners?

  • With resistance now within striking distance---and the first move typically being the false move--is this lift shaping up as a massive head-fake?

  • Are you reading all the excellent grist on The Exchange?

  • Will Citigroup (C) $30 once again act as resistance?

  • Man, did I pick the wrong month to quit smoking or what?


R.P.


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