Editor's Note: Todd posts his vibes in real time each day on
Buzz & Banter
On Monday, we flagged
A Signal That Bears Watching
; the vaunted
, which indicated that much of the hot-popper through the top-end
of the trend channel was short covering rather than real buying.
The last three times that happened was April 2010 (the
(INDEXSP:.INX) fell 13% in eight days), July 2011 (S&P fell 19%
in 23 days), and Oct. 2011 (S&P then fell 10.5% in 20 days).
That's a small sample set, but an interesting one nonetheless.
Yesterday, as the S&P romped higher in the early goings, I was
feeling some pain in my shorts (my positions, not pants)-it's tough
to "trade around" a bias when the price action is decidedly
one-sided. I vented that frustration, while noting that
The Chasm Between Commodities and Stocks continued to
. That 'revision to the mean' has begun-the S&P is indicated
down a percent as gold is trading 2% higher-and I've included an
updated chart below for purposes of perspective (it has a ways to
On May 1-the day after my operation, which is sorta nuts-
I wrote a Buzz that said
, "I have not looked at the tape today but for what it's worth,
I have a good buddy in the paper industry who tells me his
business activity in China recently fell off a cliff and has not
. He shared a similar tale prior to the last sizable correction so
I sat up (slowly) and took notice." The S&P rallied 6% from the
low that day to yesterday's high but the anecdotal data point
evidently had some teeth to it.
Overnight, we learned that China manufacturing contracted in May
for the first time in seven months. That, coupled with the mere
specter of Big Ben pulling back the punch bowl "in the next few
meetings" (if the Fed believes the economy can self-sustain) punk'd
Japanese equities 7.3% in one quick
Of course, the tricky
(INDEXNIKKEI:NI225) had rallied 84% since November (pause to let
that sink in) so that too, requires perspective.
Should the crimson tide ride through the close, today will be the
second straight Debbie Downer. If by chance Freaky Friday follows
suit, it will put an end the longest streak of consecutive sessions
Dow Jones Industrial Average
(INDEXDJX:.DJI) without a three-day decline since 1900. That's a
long time ago; I think Neal Glassman was still in high school!
Late yesterday on the
Buzz & Banter
, I offered the following vibes:
Whispering "Even a broken clock is right twice a day," and
understanding that the S&P (-18) is now back to where the
market closed last Thursday, I am
covering my short-side exposure into the close.
Lack of discipline? Off the reservation? Good money after bad?
Maybe, but given where we've come from-
and where I perceive we're going over the next month or
-I'm gonna give the downside some room.
Famous last words, right? Right!
I'm not jumping on any bandwagons-or jumping on anything for that
matter, a soapbox or otherwise-but for what it's worth, my sense is
may prove to be the "easy trade" with the benefit of hindsight, and
is a legitimate downside target that could arrive before the meat
of football season. And, it will be interesting to gauge the
feedback on this contrarian observation relative to the venom
The Gold Scold
, which was written when the yellow metal was trading at $1900.
Of course, I will trade around my short-side bias-hit-it-to-quit-it
and make-it-to-take-it-in an attempt to check all of the boxes in
My Ten Trading Commandments
I was missing three yesterday
). I haven't exactly been...hmm, what's the word...
since my hip surgery, but a funny thing has started to happen as I
taper off the remaining pain meds; there are glimmers of lucidity
and moments of clarity. Imagine that!
I'm not gonna jinx myself (again), so suffice to say we'll take
this journey one step at a time as we together find our way, in
real-time, over on the Buzz & Banter
(click here for a free two-week trial!).
- The American Association of Individual Investors Weekly
Equity Investor Sentiment Index is out-and boy is that a
mouthful! Bulls rose to 48.97% (from 38.49% last week and bears
fell to 21.58% (from 29.34% last week). (Source: Bloomberg)
- The last three covers of the
are uncanny-if not downright spooky!
May 18, 2013
May 11, 2013
May 4, 2013
- Follow the leaders as forward tells; this includes
) as stateside money-centers,
) as an overseas financial proxy,
(GOOG), market breadth, commodities (
for whiffs of deflation
), and the dollar.
- And think positive, friend;
profitability begins within!