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The Third Quarter Arrives: Hold On to Your Hats!

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The second half of 2013 is upon us.

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Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

The third quarter cometh and not a moment too soon; you could almost hear hair follicles hitting the trading desks last week as fund managers put the final touches on the first half of their year.

While June was a volatile month, 2013 is shaping up just fine, thank you: The Dow Jones Industrial Average (INDEXDJX:.DJI), S&P 500 (INDEXSP:.INX), and Nasdaq (INDEXNASDAQ:.IXIC) are all hovering at or near 13% which isn't too shabby, all things considered.

We covered a lot of ground last week; on Monday we asked if Shibor Will Become the Modern Day Sub-Prime.

On Tuesday, we offered that China Is Trying to Teach the USA Free-Market Capitalism.

On Wednesday, after the paltry 1.8% GDP, we discussed the difference between a Stock Market Rally and an Economic Recovery, and gave a Pop Quiz: Will the Stock Market Rally Last?

Thursday, we highlighted the technical landscape in The US Stock Market: Highway to the Danger Zone and Friday we asked if Gold Was a Leading Indicator of Equities before offering that Gold could see a $100 rally the before Friday (as I write, gold has traded $68 off the low print).

We began this abbreviated holiday stretch-flush with Q3 agendas, thin skeletal ranks manning trading desks, and all sorts of technical influences-on a positive note after Japan set the global tone (+1.3%) and Chinese equities edged higher (Shanghai lost over 20% in June alone; the bounce, thus far, is all of 7%).

All eyes turn to the United States of America to see if the country will indeed have a happy birthday.

Random Thoughts:
  • The stateside tape opened higher, testing the 50-day moving average at S&P 1623. Thus far, S&P 1600-past resistance and near-term support-held two tests of that level.
  • The banks, breadth, gold, and tech should help guide us as we together find our way. Goldman Sachs Group Inc (NYSE:GS), Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), Deutsche Bank AG (USA) (NYSE:DB) and Barclays PLC (ADR) (NYSE:BCS) remain our primary single-stock tells.
  • With unregulated over-the-counter derivatives tying the world together-not just still, but now more than ever-we must respect the unexpected. Risk has not disappeared; it has simply changed shape.
  • Stocks have rallied, as has gold (+ almost $70 since we sniffed a bounce on Friday; who was it that said to never let an opinion get in the way of making money?). Either way, the updated S&P vs. Gold chart is pasted below for your review.
R.P.

Twitter: @todd_harrison

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