Random Thoughts: Are Transportation Stocks Forecasting a Decline?
Fundamentals and psychology square off into quarter-end.
- They threw a LOT at yesterday's tape—fundamental softness, China trading at 2009 levels (it was flat last night), overbought conditions—but you could almost hear the bulls burp at the end of the session (as they digested the supply).
- The only potential fly I can see—other than the Federal Reserve trying to corner the global financial markets—is that expiration influences are in play. Still, the bulls will argue that it just doesn't matter and at the end of the day, price is the ultimate arbiter of our financial fate.
- I resisted the urge to punt my QQQ (NASDAQ:QQQ) puts into yesterday’s slippage as I sensed expiration was pulling the QQQ toward $70 (pin action).
- I also resisted the urge buy back the Facebook (NASDAQ:FB) (that I sold as a trade) as it seemingly has favorable risk-reward relative to the high-fliers (although on a P/E basis, it's still more expensive than many of said high-fliers).
- When it doubt, sit it out, and that's what I did while maintaining my buy-stop above.
- There is a very fine line between stubbornness and patience—it's called the bottom line. Remember to respect—but never defer to—the price action.
- Last August, we asked, "Will the Next War Be Bulletless?" This morning, The Telegraph reports Beijing is hinting at a "bond attack" on Japan. This isn't the same type of escalation I anticipated but the direction of social mood is most certainly consistent.
- France's richest man has applied for Belgian citizenship—as a large tax increase for the wealthy approaches. While he promises to still pay French taxes—including the planned new 75% tax rate on incomes of more than €1 million—the timing is more than curious. You can never cage free will, right?
- Take care of the minutes and the hours will take care of themselves; good luck today, and have a great weekend—you most certainly earned it!
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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 email@example.com.
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