The M.O.A.H.S is Probably Over*
As a non sequitor beginning to this whole mess, I am finally supporting my genius the right way. Yes, that’s right, new desk chair. I’m pretty damn stoked, and I think Fly would approve.
I also want to take this time to start some rumors about The Fly in a Chuck Norris vein.
The Fly never sleeps — He waits.
The Fly has no “ctrl” button on his keyboard — The Fly is always in control.
The Fly can kill two stones with one bird.
And so on.
As for this market of ours, I feel like tuning out, á la fifth period in May of senior year.
It’s impossible to analyze what really happened on a day like Friday. We opened up several percent, which as anyone with half a brain knows is not the time to buy. Having zero equity exposure following my top-tick of the short trade, I didn’t get squeezed but did not benefit from the blatant market manipulation.
The number of wild prints was something to behold though.
- SKF didn’t open for the first two hours
- ZION printing up 150% from the prior day
Then you have situations like Citigroup Inc. [[c]] making its first test of the 200-day since this jamless credit sandwich began.
So where does that leave me?
The economy is still contracting and the credit problems, even if “solved” (they aren’t) don’t change the underlying economic picture of lower earnings. The economy and the market do not necessarily preform in tandem, so don’t make that mistake, but it’s hard to argue that the best is yet to come earnings-wise.
However, since I have no stake in this, I may be dismissing a meaningful bottom for something more fleeting. I can’t quite tell, which is why I’m on the sidelines. There is no law that says you have to play, although I’ll certainly be plotting.
I think the restrictions on short sales, as pointed out by Shed, Matt, and Barry are going to end badly. I still am bearish over the medium-longterm. I am still waiting for this indicator to bottom — it will sometime.
Short Term
Long Term:
*Mother of all Hank-induced squeezes.
Cool chair. I want one,… as long as it’s not pleather.
Economy is definitely contracting. At the same time, XLF is acting as if it is about to break out. If economy does not recover very soon (in months), who will support financial sector fundamentally?
Government interventions (1. shorts banning and 2. RTC bailout) are tactical in nature. Their impacts should be effective in a very short time frame and meant to work quickly. As such, there would be an upward pressure on the market.
The question is…how long can this last? If economy turns around, then this could be the bottom, but at this point, it does not seem like we have the bottom.
btw what are those indicators in both charts?
I made it, it is proprietary and only found here. And maybe at some point the PPT. It measures the distance of the deviation of the position of all NYSE stocks relative to their 50-day MAs.
Lemme try one of these Chuck Norris things…
The Fly has a decorative spoon collection, and a perm.
How’s that?
-DT