Editor's Note: Todd posts his vibes in real time each day on
Buzz & Banter
I'm learning to fly but I ain't got wings; coming down is the
Stateside equity markets opened in the hole today; a confluence of
factors contributed to this, including:
), the world's largest retailer, cut is annual profit forecast
after higher payroll taxes reduced customer traffic in the second
quarter. We've been talking about stagnant wage growth vs.
inflation in things we need (and deflation in things we want) for
quite some time; we should keep an eye out for other indications of
) cut 4,000 jobs; not exactly the type of move you would expect as
mainstay market proxies tickle all-time highs. They're not alone;
expect Wall Street to embark on an "epic layoff" that will shed
upwards of 100,000 jobs, or 15% of the total workforce over the
next 18 months.
George Soros is
making a monster bet against the
(INDEXSP:.INX). He is bullish on
) -- and dumped gold, as well as chunks of
(NFLX) -- but the
(NYSEARCA:SPY) bet is a downside wager, not a hedge against long
stock positions. His 13F reveals that
his SPY put position
is his single biggest exposure at roughly 13.5% of his entire fund.
-- the trend line that has been in place since November (barring
the false breakdown in June) -- is now broken, which removes the
long-bias crutch for the technical types among us.
Egypt is getting ugly (the government headquarters was torched; the
death toll now exceeds 500),
consistent with our tricky trifecta
of societal acrimony, social unrest, and geopolitical conflict. On
this topic, I've given much thought about the third phase of this
continuum and believe it may arrive in digital form. Remember, the
goal of cross-border conflict isn't death or physical destruction,
it's economic upheaval. Given our digital dependency,
cyber warfare remains a legitimate threat.
In terms of technical support, S&P 1650 -- the 50-day moving
average, as well as former resistance from June -- is where the
bulls need to circle their wagons. The 200-day moving average
resides down at S&P 1550, for purposes of perspective, and I
wouldn't be surprised to see us get there. I continue to hold a
handful of (underwater) December SPY puts (
the proverbial snake eyes
) as we continue to find our way.
The Twitter Revolution, Part Deux
Yesterday, I wrote the article
Twitter Legalizes Front-Running in Stocks
. Not surprisingly, there was a lot of feedback on the column. A
random sampling is shared below.
Carl Icahn, to my knowledge, is not a broker. How is this
I was not talking about "front-running" in the traditional sense,
as this is no longer a traditional tape. There are seismic digital
shifts afoot and this is simply an extension of that prevailing
How is [what Icahn did] any different to PMs going on CNBC and
talking about their top picks, or you and I posting our trades?
I suppose the answer lies in
interpretation of REG FD
("full and fair disclosure"). To quote, "On August 15, 2000, the
SEC adopted Regulation FD to address the selective disclosure of
information by publicly traded companies and other issuers.
Regulation FD provides that when an issuer discloses material
nonpublic information to certain individuals or entities --
generally, securities market professionals, such as stock analysts,
or holders of the issuer's securities who may well trade on the
basis of the information -- the issuer must make public disclosure
of that information. In this way, the new rule aims to promote the
full and fair disclosure."
Mr. Icahn is not an issuer --
technically, he did nothing wrong
-- but this opens a Pandora's box in terms of what defines
"selective disclosure" (to 52,000 Twitter followers), whether
you're an investor or an issuer. Don't think for a second that a
LOT of funds didn't sit up and take notice of this situation; what
precludes them from touting their positions after they buy them,
and then selling into the frenzy?
The issue for
the integrity of the markets
is that they move in real time, while any legislation aimed at
stemming this emerging pattern will take time to implement and