Andy Swan » Stock market thoughts, randomized

Stock market thoughts, randomized

June 11, 2009 – 10:10 am

Tape: There is a buyer’s bias here without question. In addition, it is quite clear that from 9:00-9:30 AM and 3:30-4:00 PM ET a concerted effort to prop futures and therefore confidence is occurring. I’m not really going to complain about this, since it would just be a drop in the bucket of complaints I have about the role of government and government sponsored entities in our markets.

Sectors: I like energy, telco, biotech and tech component makers. I dislike CRE, financials (despite their current gov’t quarantine), and heavy equipment. Commodities seem to have placed all their chips on INFLATION, which I think is an early and likely wrong bet. In fact, deflation still seems likely to me….but I’m not going to argue with the market too much.

Overall: I’m fine with short until the S&P closes over 950 or so. Until then, we’re just spinning wheels. And yes, I think there is a legitimate chance that the market steps off of a very high cliff this summer, due to high interest rates and unemployment. Don’t forget, rising interest rates do not necessarily mean inflation is going to happen right now. They could just be a result of people realizing that they’re lending money to an organization that is on pace to run a $2 trillion deficit while simultaneously declaring war on the businesses that employ and create the wealth of its citizenry. But maybe that’s just me….

oddthink

Yeah... it has felt extra-"manipulated" to me lately.... I keep expecting the unemployment numbers to derail this giddiness, but not yet. I was very encouraged by the 3:45ish pullback from 950 today that I'm on the right side of the trade. I like energy as well, but I wonder if it's too late for me to grab a PBR or BJS for a swing trade or options setup. (Scalping yes....) For "financials", I am in one-- ETRADE-- ETFC on this Ken Griffin news and the possible implications for Citadel/E*Trade. Notice the FAT volume on some ETFC leaps... What do you think? What strategy would you use to capture this impending non-TARP move?? Thanks, oddthink (also Andy)

JakeGint

They could just be a result of people realizing that they’re lending money to an organization that is on pace to run a $2 trillion deficit while simultaneously declaring war on the businesses that employ and create the wealth of its citizenry.

You forgot the most important part -- "running the printing presses 24-7" or, as the more euphemistic call it: "Quantitive Easing."

Makes it more Einsteinian that way.

You're a very smart guy, so let's shave w. Occam's Razor. If you had $50+ Trillion of Liabilities (give or take a beshambled gummint program) hanging over your head like the Sword of Damocles, and you also had a currency that not only was the world's reserve paper, but was also not tethered to anything save your citizenry's "full faith and credit," -- what's the easy way out and what's the hard way out? Further, as a good gummint drone with re-election in the hustings, which path will you take?

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andyswan

Fire em up. But that doesn't mean inflation NOW.

JakeGint

No, I think that was a Ford (Eisenhower?) Administration slogan.

I think the bond market's telling the tale. And the currency markets... both dwarf the equity markets by multiples ...

I don't disagree w. your take on the market, I just think inflation will bring it to it's knees, not deflation. We're not Japan. We've got the lever, and we'll use it.

TraderMark

You had me at "concerted effort to prop futures"

I mean... you had me at Hello.

andyswan

Show me the money!