Minyanville Midday Alert: A Bull in Headlights!
Pay attention -- you will own your decisions.
Anyone involved with, or following, US financial markets has known the drill. All-time highs, almost every day. Performance anxiety into quarter-end as fund managers attempt to keep up with the Dow Joneses. Sentiment levels at historic readings. It's been a circle smirk to put it mildly; everything's funny when you're making money!
While I was glued to my computer this weekend, digesting the potential ramifications surrounding the confiscation of deposits in Cyprus (call it what you will; that's what it is), I was struck by the lack of coverage in the mainstream media.
It had to make the New York Times Sunday Business section, right? Nope.
How about the New York Post, which always loves a juicy story? Absent.
Any of the online financial publications? Barely.
In fact, the only place it got any play was Twitter and, once I had a moment to focus, Minyanville.
True to the script we mapped — which doesn't always happen, but this time it did — the tape got whacked hard and bounced sharply. On cue, market pundits uniformly pooh-poohed the news: Cyprus doesn't matter.
Perhaps we can't blame them; Greece didn't matter, despite the press it received, so fool them twice and shame on them. In the MSM (mainstream media), there are career risks to variant views, particularly with the market trading at all-time highs. Therein lies the potential problem; if the first mouse gets the squeeze, the second mouse could score the cheese.
I like to Question Conventional Wisdom; I can't help myself, it's part of my DNA. And while "timing is everything," as evidenced by the timestamp on the column I just linked (declaring that the financial crisis was over), I would offer the only way the financial crisis is over (I don't think it is) is if a social crisis emerged, which would lead to, yep, the next iteration of the financial crisis (truth and trust are the grist of bull markets).
I just got out of my chair and bowed my head to the Trading Gods, as I respect that quarter-end animal spirits are bouncing off the walls and the government mule is pouring liquidity into the market hand over fist. We know this, however; it's why the Dow Jones (INDEXDJX:.DJI) is/was at all-time highs. And while it can continue — the market can do anything it wants — I'm reminded of that night in September 2008, when I was at BLT Steak in NYC and wanted to jump on the table and scream, "PAY ATTENTION TO WHAT IS HAPPENING!"
I'm not saying that history will repeat itself; I'm simply asking — no, begging — that you see both sides, manage risk (rather than chase rewards), and don't fall prey to the blind ambition that is consistent with markets trading at or near all-time highs, for a smart man once said, "Buy low, and sell high."
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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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