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The Worldwide Window: Is the Invervention Finally Working?

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After an endless array of false starts and pity fits, the tape has that feel to it this morning.

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World, hold on
Instead of messing with our future, open up inside
World, hold on
Wonder you will have to answer to the children of the sky


(Bob Sinclair)


Hey there, you… yeah, you… the one sitting in front of that screen! Are you ready? Do you see it? Can it be?

After an endless array of false starts and pity fits, the tape has that feel to it this morning.

A certain, how shall we say… je ne sais quoi.

Some Gestalt
, if you will.

Like something has changed, if only in perception.

I awoke with pep in my step and, after the requisite beat-down by my kickboxing trainer, I scoured the rags looking for some stories to validate the gut feel. I have, as Minyans know, been dancing between the elephants lately with tight-leashed upside tries in the context of bigger, broader badass concerns.

And there it was, the first clue in the Financial Times, which opined that fears of a year-end liquidity squeeze were abating due to the recent emergency operations.

Geez, after last week's Global Coordinated Liquidity Injection and the more recent $500 billion flush by the ECB, I certainly hope so!

And then there was an article in The Independent, which offered that "Central banks appear to have had considerable success in restoring activity to the credit markets, according to evidence yesterday. The interest rates at which banks are willing to lend to each other fell sharply – in some cases recording their biggest drops in four years – as the caution that had threatened to paralyze the financial system abated"

Now, we talked through this process backwards and forwards, starting this summer when we sensed something ominous was afoot.

And we know that, going forward, the other side of zero-percent financing awaits in credit card delinquencies, auto loans and consumer credit. There's no escaping that reality, unfortunately, there are simply degrees of magnitude in which it will manifest.

Be that as it may, the question on everyone's mind is, right here and right now, will we hold or will we fold? We walked through our primary metrics on Monday and they didn't paint a pretty picture but, alas, these are unique times with motivated agendas in play. Toss in tomorrow's option expiration and you have the recipe for mas vol.

There are no easy trades these days and the risk is substantial both ways. I plan to wait for the first dip and nibble anew, with tight stops, and watch our tells (breadth, banks, beta), along with our technical levels as a contextual backdrop.

From there? World, hold on…

Good luck Minyans, I'll see you on the Buzz!

R.P.

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