Very positive action today after surpassing S&P 1290 [S&P 1290 is our Moby Dick]. Still 2 hours to go but any close over 1305 or so would make us happy campers from the long side. (need to stress - we need to close above that level; not simply trade over it during the day) I've continued to reduce exposure (unhedge us) from the short side; now we just need to actually find stocks on the long side that go up, instead of down.
EDIT 3:40 - Did we just see the biggest head fake of the past... week? Hmm.. now trading below 1300, and gave back 10 S&P points in 2 hours. This market won't give anything up easily - going to be an interesting few days to see if we can continue the trend
With this sort of action we can potentially see a move all the way back up to the 200 day moving average (1370 and falling) although not at the pace we've experienced the past few sessions. Or maybe we will, everything happens in lightning speed nowadays. When we get there will revisit the dark side of the market as this rally is yet another hoax in my opinion. Our troubles do not go away just because crude oil is lower.
Some amazing action out of the retailers - see Coach (COH) - and Polo Ralph Lauren (RL) which we considered last week continues to fly. Lots of tried and true shorts over the past year such as Harley Davidson (HOG) are simply unstoppable right now as oil heading to $24 brings the US economy back ;) I'd be unsurprised to see restaurants also fly. Once again, this is simply the opposite trade of everything that has worked the past year to short - casinos should also ramp. It is quite a simplistic thinking but it is what it is - look at Wynn Resorts (WYNN) up 10%, MGM Mirage (MGM) up 14%.
It is truly amazing how the entire world has changed by a 40 cent drop in gasoline prices - headed to 65 cents. One has to ask why are we not taking serious steps to stop us from being hostage to oil prices when we can see how our entire economy, and system of capitalism dies at $4 but revvs at $3.50.
At some point in the future we'll wake up from this dream state, look across the bed to the stock laying next to us and think "what were we thinking?" - but for now the party is on. Laggards are leaders.
Note to self on June 20th your sarcastic self wrote
Can we only be half a week away from the first breathless talk by Maria or Erin about how serious Ben is about slaying the inflation beast? Laughable - but we'll play along. If/when crude every does take a break (say $120?) then we can also hear about how gas $3.75 instead of gas $4.15 is going to mean the consumer will be piling into the malls. Crude $100? Gas $3.25? Time to buy airlines! SUV makers! Hurry!
Note to self: listen to yourself next time
Did you like this article?
's
