Random Thoughts: Traders Take Your Mark
Market feels like a marathon being run at sprint speed.
The Hump Day Cometh and with it, a slew of new information for Minyans to assimilate. While sharing a cheeseburger with President Fish last night at PJ Clarks, I told him that this market feels like a marathon run at sprint speed. While I consider myself "quick, not fast," the analogy isn't lost on anyone following this fray. It's relentless, and it's all consuming and guess what--we're again at the starting line.
Some top line vibes as we roll up our sleeves and suck down the joe:
- My grandfather taught me that all we have is our name and our word. In that light, I'll offer that this morning's missive regarding whether or not we've seen the 2008 trading low is top of mind for yours truly. Nobody is smarter than the market and our singular mission is to share our thoughts with hopes that they provoke yours.
- Whether that precept proves true comes down to three primary dynamics--the lubrication of credit, the action in the dollar (if it rallies, all bets are off) and the specter for geopolitical strife into the election (an unknown, but on the radar).
- Clues will be provided by the DNA of the tape during the probe lower, including market internals (watching for improvement) and the establishment of a higher low (should it occur, which would provide a technical backdrop with which to define risk).
- The problem with sniffing for a trading low? The cancer is many times bigger than the patient. As such, they should trade lower, perhaps to the S&P 600 level that some of the smarter professors in Minyanville have bandied about. I'm simply trying to focus on the journey rather than the destination, which may be cute but it's what I do.
- With all due respect to Mary Ann, I've been Ginger with my risk. After selling the opening yesterday, I patiently waited and nibbled on starter positions in BHP Billiton (BHP) and the emerging markets (EEM) when they were both down a deuce. Risk is defined and the mechanics of the swing are consistent with getting on base rather than trying to go deep.
- On the credit front, LIBOR (rates banks charge each other for three-month loans) dropped for a third day (9 basis points, to 4.55%), the longest sequence of declines in seven weeks. That's the good news. The not-so-hot news is that it's still 305 basis points above the Fed's target rate. For purposes of comparison, the 'high water mark' was 332 basis points on October 10, 82 basis points when they toe-tagged Lehman Brothers and 11 basis points on July 31.
And yields on overnight U.S commercial paper fell 20 basis points to 1.52%, the lowest levels since September 26.
- If you didn't read Pepe Depew's 5 Things yesterday, you're missing pure brilliance.
- The reaction to news is always more important than the news itself. In that regard, keep close tabs on Intel (INTC), JP Morgan (JPM), Wells Fargo (WFC), Coca-Cola (KO) and the retailers, on the heels of retail sales (widely expect to, uh, "suck").
- Good Riddance! On the bright side our cosmic ride, Mercury Retrograde ends today.
- If you had to pick Shats or Hoff, who would you choose? And no Theal, you can't pick both.
- Congrats to Minyan A.C. Morgan on daring to dream and snatching his vision.
- Deep breath, Minyans, and think positive. It really does make a difference!
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 firstname.lastname@example.org.
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