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Here's the Best Way to Play a Weak Payroll Report on Friday
At the beginning of the second quarter, utilities and other defensive stocks will perform well against weaker economic data.
Michael A. Gayed    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Stocks as of this Buzz post (2:15 p.m. EDT) are ripping higher, with oversold US small caps bid up the most. Traders looking at their high beta trades may think things are all clear now, but this is a highly defensive environment. Utilities, health care, and consumer staples are all up powerfully in a way not suggestive of confidence in the general move higher. Long-duration Treasuries are also well bid. Don't discount the importance of this leadership potential. In the 2014 Dow Award-winning paper "An Intermarket Approach to Beta Rotation," my colleague Charles V. Bilello and I show why utility stocks in particular are historically a harbinger of higher volatility. Does that guarantee a correction? Of course not, but if Friday's payroll report is weaker than estimates, which bonds seem to think will be the case, the defense playbook will end up being the best way to start the second quarter.

Twitter: @pensionpartners

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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.

Here's the Best Way to Play a Weak Payroll Report on Friday
At the beginning of the second quarter, utilities and other defensive stocks will perform well against weaker economic data.
Michael A. Gayed    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Stocks as of this Buzz post (2:15 p.m. EDT) are ripping higher, with oversold US small caps bid up the most. Traders looking at their high beta trades may think things are all clear now, but this is a highly defensive environment. Utilities, health care, and consumer staples are all up powerfully in a way not suggestive of confidence in the general move higher. Long-duration Treasuries are also well bid. Don't discount the importance of this leadership potential. In the 2014 Dow Award-winning paper "An Intermarket Approach to Beta Rotation," my colleague Charles V. Bilello and I show why utility stocks in particular are historically a harbinger of higher volatility. Does that guarantee a correction? Of course not, but if Friday's payroll report is weaker than estimates, which bonds seem to think will be the case, the defense playbook will end up being the best way to start the second quarter.

Twitter: @pensionpartners

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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.

More From Michael A. Gayed
Here's the Best Way to Play a Weak Payroll Report on Friday
At the beginning of the second quarter, utilities and other defensive stocks will perform well against weaker economic data.
Michael A. Gayed    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Stocks as of this Buzz post (2:15 p.m. EDT) are ripping higher, with oversold US small caps bid up the most. Traders looking at their high beta trades may think things are all clear now, but this is a highly defensive environment. Utilities, health care, and consumer staples are all up powerfully in a way not suggestive of confidence in the general move higher. Long-duration Treasuries are also well bid. Don't discount the importance of this leadership potential. In the 2014 Dow Award-winning paper "An Intermarket Approach to Beta Rotation," my colleague Charles V. Bilello and I show why utility stocks in particular are historically a harbinger of higher volatility. Does that guarantee a correction? Of course not, but if Friday's payroll report is weaker than estimates, which bonds seem to think will be the case, the defense playbook will end up being the best way to start the second quarter.

Twitter: @pensionpartners

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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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