Random Thoughts: Black Swans and Confused Crowds
Two for volatile Tuesday!
- The inter-connectivity of global financial markets is the true black swan. As we're apt to say in Minyanville, FDR didn't know what a derivative was. We've talked about the critical crossroads for a long time and for good reason; proactive preparedness puts you one step ahead of the confused crowd.
- I wrote last week that I sensed 4:1 risk-reward (S&P 1120 vs. S&P 1030, where the 200-day comes into play) and I'm trading 'em that way, albeit a tad smaller due to a bevy of unknowns (or, as my brother Bennet would say, I'm trading "Todd-lots.")
- The most bullish thing on my screen? Granny Goldman (GS), which is thumbing her nose at the continued stream of negative press.
- "Allan Greenspan says the U.S recovery is "extremely unbalanced?" Isn't that like the chef of a restaurant lamenting that this souffle caved in?
- If you haven't read the latest on the "secret" American International Group (AIG)documents," have at it Hoss.
- The most bearish thing on my screen? Hmm... Deutsche Bank (DB) (-4%), 3:1 negative breadth, lethargy in the energy patch (note how yesterday's "eyes" in Weatherford (WFT) proved true) and the Art Carnage in tech.
- That doesn't mean we can't rally, of course, but the Quack Count doesn't support it.
- Consistent with our stair-step stylistic approach, an inability to recapture the S&P 1100 flag will point the compass towards S&P 1080. Viewing the big picture as a series of little pictures allows you to limit your stumbles and fumbles.
- If we've been injected with fiscal and monetary drugs that are masking the symptoms rather than curing the disease, will this Neil Young anthem become the serenade of the season?
- Chart of the day? How bout this beauty of the Dollar Index. Note what happened the last few times the 50-day crossed through the 200-day moving average, and see that it has again.
- Aw, Falk... lands.
- "Son, you ever heard of a little fella named Ahmad Rashad? Uh, you mean Ahmadinejad? Yeah, whatever!"
- Two for Tuesday? Why the heck not!
- I shared the Hayek vs. Keynes "Boom and Bust" Rap last week but wanted to circle back for those who missed it. It's pretty awesome.
- The lost decade? According to the chief economist of the IMF, we should be so lucky!
- Can we sidebar for a moment and pay homage to the brilliance of Bob Dylan?
- The tradition of Minyan March Madness will of course continue. The winner will receive some snazzy snaps from the Critters while the "non-winners" will have the option, but not the obligation, to help the kids through The Ruby Peck Foundation for Children's Education. Details to come as we edge closer to Selection Sunday.
- Things I've learned.
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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