This was not my original intent (to sell some so soon) but in this market gains that are offered must be taken quickly - unfortunately this market has turned everyone into a daytrader on the long side. I am going to take this 10% gain on the Joy Global (JOYG) stake created yesterday as the stock has jumped from $15 to $16.50s. It made the same move yesterday but I did not lock in the gain hoping that a 6 year support line would provide a lot better support than it did yesterday. Yesterday's action in the indexes was quite remarkable - usually a very long term support area would provide a cursory bounce that can last days or perhaps weeks. Instead we had one that lasted hours. Quite amazing.
I took it down from a 5.0% stake to 2.2% stake, again locking in 10%.
So with my thesis that we'd at least get some multi day bounce off of 2002 lows now corrupted I have to be a little less positive on the long side. Now, it's 10:45 AM and if we regain S&P 770 by 4 PM that thesis can revert back but I cannot tell the future so I can only go off the current data set which is a failure to bounce. Now S&P 770 turns from support to resistance - and lo and behold that's almost the exact spot we ran to this morning. So I actually added short exposure on the bounce up to our new resistance ....
The action in Citigroup (C) continues to be pathetic as it now touches the $3s area, and I don't believe that this company will be independent by Sunday night. Most major institutions cannot own stocks below certain price points ($5 is certainly one) so that' yet another issue to layer on Citi. Maybe the market will "cheer" Citi being taken off the docket like they originally did with Fannie and Freddie but it really speaks volume about the deep doo doo we are in.
The action in JPMorgan and Bank of America is now also stunningly troubling. It just seems unfathonable we won't have any major public banks trading on exchanges but this is how these stocks are acting.
As for the market I keep typing what would be best to create a washout low is a panic open, lock limit down open in futures each morning; instead we get hopeful buying and futures up. Boggling. The ONLY explanation I can see for this is people know when the reversals come they have been huge (10% type moves) and every morning people are trying to front run a bounce, and then when it doesn't happen they exit stage left. Nothing else makes sense outside of PPT actions to explain the benign behavior every morning when the actual action during the day is so horrible.
I do believe with the absence of fundamentals everything is technical driven now so we'll see what happens between 3-4 PM... the market doesn't seem to matter anymore the other 5.5 hours. To be bullish we'd want to see a close on S&P over 770, JPMorgan to stop acting as if its Citigroup 2.0, and then I guess one of those Sunday night meetings for "too big to fail" Citigroup - in which the only answer I see, due to its size, is for Americans to be the new owners of Citi. Any merger would make no sense to me because the shorts would just target the new merged company. But I don't want to just blame shorts - no one wants to buy these things because of their utter lack of transparency which our accounting standards have allowed and in fact helped create... along with asleep at the wheel regulators. Now the free markets are fixing it I suppose.
We will bounce at some point, and it will be a large move up I do believe - but it appears too many people are still looking for it. So we are not washed out and hence heading back down seems more reasonable than back up. We'll check back after 3 PM.
Long Joy Global in fund; no personal position
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