Random Thoughts: Is It Time to Fade the Mainstream Media?
That path is for your steps alone.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
Ripple in still water; when there is no pebble tossed, nor wind to blow.
-- Grateful Dead
It's been a lazy overnight session as the masses look to the tape for direction (the buyers are higher and the sellers are lower). Given oversold conditions can be worked off as a function of time or price, the meander, which is all you can say about the price action since yesterday, hasn't offered much in the way of near-term clues.
Clues that do matter? The DAX is nearing the 5800 price target (which was 14% below where the German proxy was trading when we fingered it a month ago), the financials acted like pooh yesterday but they're getting oversold (as go the piggies, so goes the poke) and high beta stocks have been acting punky with VMWare (VMW), LinkedIn (LNKD), Apple (AAPL), and F5 (FFIV) fielding supply; again, I don't know if Facebook (FB) is the catalyst for the multiple compression but it certainly hasn't helped. (Note: I wanna be a long-term buyer of LinkedIn at the right price.)
I continue to watch Google (GOOG) as a potential short candidate, but I haven't re-pulled that trigger yet, and I'll dip a trading toe in Facebook should it enter my nonsensical $23-$25 zone. All the while, it's vuja de all over again as the Battle Royale: Part Deux takes shape, with central banks on one side and cumulative imbalances on the other.
As a wise man once sang, "If I knew the way, I would take you home." As I don't -- nobody does, with certainty -- we'll continue to monitor the forward probability spectrum and look for advantageous risk-reward; and as much as I wanna take the other side of the sudden "DEATH WATCH!" for stocks, the bears maintain possession of the ball under S&P 1285 and BKX 44.
There will be fits and starts both ways; the onus is on us to find good stocks at the right levels, while managing risk rather chasing reward.
Some Random Thoughts:
S&P 1285 (the 200-day) -- former supports -- is near-term resistance; S&P 1300 lurks above that. S&P 1200-1250 still tingles my antennae (as a potential pivot to get long for a trade) but that's more "hair on the back of my neck" than scientific equation.
I was "scary bearish" as we entered May (better lucky than smart). Now, with global markets significantly lower (BKX -17% and DAX -14% since that article and the SOX -21% since mid-March), many mainstream media pundits -- some of whom cheer-leaded for Facebook (FB) and practically dared investors not to fully invest -- are now screaming from the rooftops how bad it is out there.
Earth to Matilda, do your own work; you're the one who will reap the rewards or shoulder the losses.
At these levels, I'm respecting both sides, exercising patience and remaining opportunistic. I have a few price targets in my crowded keppe but know we're one headline away from an unexpected surprise. I am not mandated to be in risk assets and often times the ability not to trade is as valuable as trading ability; if my greatest loss is one of opportunity, I will consider myself lucky.
T-Minus seven days until I move my family from the belly of the beast; I sure hope this happens before OWS 2.0 arrives!
I'm psyched to see the Thunder on a roll; Gavi (my eight-year-old bonus son) is a monster KD fan and when he's happy, I'm happy. As it stands, my two favorite teams still in the playoffs are OKC and anyone playing the Heat!
If you monitored my Twitter feed this weekend, you would have thought that we were here -- the precipice of real pain. We still may be -- check the time-stamp on that link; it was the calm before the storm, so don't mistake quietude for safety, but rather use it to your advantage.
- For those who asked (or are otherwise interested), here are the media hits I've done since Friday:
Bloomberg Rewind (co-host with Matt Miller on Friday, June 1)
Yahoo Finance (Why Lower Crude is Bad for the Economy, June 4)
Yahoo Finance (Market Declines Possible as European Crisis Continues, June 4)
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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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