“I fell the Earth move under my feet – I fell the sky come tumblin’ down, I feel my heart start to tremble Whenever you’re around….” - Tapestry - The great Carole King 1971
Was yesterday another Greenspan “Irrational Exuberance” reaction? I mean on Wednesday he got on TV and said ‘Eventually there will be a correction’….so tell me – are traders so enamored with Alan that they took the bait? Did eventually mean Thursday? Was his prognostication reason enough to get traders to unload?
I mean – why all of a sudden? What changed between Wednesday night and Thursday morning? It's not like we haven't beaten the issues to a pulp – right? It’s not like we haven’t been saying it for months now – I mean the more we called for a correction – the higher the mkt went. Yesterday can be defined as 'exhaustion'.....The mkt has defied most analysis - never retreating meaningfully for much too long - no matter what we threw at it - it kept going and going...
.
The improving US economy, the slowing European economy, improving Asian economies, sanctions, Russia, Ukraine, Crimea, Syria, Iraq, Portugal, Israel, Gaza, Peace, War, Ebola virus, missing airplanes, and now Argentina screams “BANCA ROTA”! (Spanish for Bankrupt) - not that this news was unexpected either!
No wait – some are even saying yesterday’s unit labor cost report tipped the scales– REALLY? Does anyone really believe that this one report that was slightly stronger than the expectation caused the mkts to shudder and collapse – down 1.8% and 2% respectively?
Or is it the possibility that today’s Non-Farm Payroll report will offer further evidence that employers are creating jobs at a rapid pace – pushing unemployment into the 5 category? Is a potentially good jobs report – a further negative for the mkts? Will better job creation signal that the US economy is turning the corner - causing the mkts to tremble? Will we ‘feel the earth move again today?’
Another strong report will cause everyone to ‘re-speculate’ what Snow White and the 7 Dwarfs will do now? James Paulson of Wells Capital sums it up this way
– "If we really got a hot wage number and both the unemployment rate goes to a five handle, I think there's a possibility people will move up their rate hikes expectations by year-end,"
Again – didn’t we know this? Have we not been yapping about this for months now? Have investors/traders just chosen to ignore all of the possibilities? Well – not so fast cowboy…..there have been some that had clearly made this bet – they were the guys who have been 'selling stocks' all along during the last 5 or 6 weeks….right? Yes there have been buyers pushing the mkt to new highs – but those buyers bought stock from someone….and those 'someone’s' put the cash aside waiting for ‘the sale’……
The question is – how much of a sale will we get? 5%, 10%, 15%? …and that is the magic of the mkts….
The correction has remained a bit cagey….right. Especially since the Fed has not delivered any real time table of higher rates....speculation yes, conversation, yes - but what is lacking is that traders want to know 'on what date'! On Wednesday – in fact if anything – she said that rates would continue to remain low….even with the generally good economic data and robust corporate earnings and guidance. So it will be interesting to see how this unfolds today….remember yesterday was also the last day of the month – today is a “NEW DAY and NEW MONTH”.
So - is it inflation that is concerning traders all of a sudden? Not so much.....you see yesterday’s weakness was also accompanied by dollar strength, oil, gold and silver weakness - so if the mkts were worried about inflation - we did not see it in these asset classes......
Exhaustion and some fear - yes an yes and we saw this in the uptick in volatility ……The VIX on the other hand rose 27% to 16.95. 27% is a fairly decent move – but remember the VIX has been in the gutter – so put this spike in context – as it remains substantially below the levels of stress it displayed during the GFC of 2007-2010. So any substantial increase in the VIX can cause an 'over reaction' an 'emotional reaction' (and trust me - I know all about emotional reactions) and that is what I think we saw yesterday. Whatever caused it - it did - and it safe to say that one of yesterday's events just broke the camels back.
Was it the Banco Espirito news out of Portugal that this lender has to raise capital? How about the big XOM miss? The Addidas news as they slashed and burned full year forecasts as they scream about the Russian sanctions? Or was it Argentina's default?
No matter what - as an investor you know that mkts rise and fall - if you don't then you shouldn't be in it.... – do not discount the possibility of more ‘risk off’ chatter – but therein lies the opportunity…remember GS last week said they are ‘neutral’ over the next 3 months but remain a strong ‘Buy” over the next year…..so are you buying it?
When stocks go on sale you should treat them like you do a sale a Bloomies….I mean how many times do I hear –
“Honey, I couldn’t leave it on the rack – They were having a sale!"
Speaking of ON SALE! US Futures were down another 13 pts in early trade only to rally back to -8,
Remember - emotional moves create longer term opporutnities. We have broken through intial support at 1952 (50 DMA) and now look to the 100 DMA at 1910...right here....after that then expect the momo guys to kick in even harder and potentially test the 200 DMA at 1857! If so - then it would wipe out the whole year to date move.
Take good Care – Enjoy the next week without me - I'll be all charged up when I return.
For this you need:
1 ½ cup of mayo, ½ c prepared mustard-not yellow preferably a brown mustard, I tsp lemon juice, 2 tsps prepared horseradish, 2 cloves garlic, ¼ cup Fresh dill—must be fresh, S&P to taste, 2 pound salmon fillet
Start by seasoning the filet with s&p. Set aside.
In a bowl combine the mayo, mustard, lemon, horseradish, garlic, salt and pepper to taste and dill. Spread the dill/mayo concoction on the flesh side of the fish. Bake skin side down in a 350 oven for around 30-40 minutes or until it reaches your desired wellness.
Buon Appetito.
Was yesterday another Greenspan “Irrational Exuberance” reaction? I mean on Wednesday he got on TV and said ‘Eventually there will be a correction’….so tell me – are traders so enamored with Alan that they took the bait? Did eventually mean Thursday? Was his prognostication reason enough to get traders to unload?
I mean – why all of a sudden? What changed between Wednesday night and Thursday morning? It's not like we haven't beaten the issues to a pulp – right? It’s not like we haven’t been saying it for months now – I mean the more we called for a correction – the higher the mkt went. Yesterday can be defined as 'exhaustion'.....The mkt has defied most analysis - never retreating meaningfully for much too long - no matter what we threw at it - it kept going and going...
.
The improving US economy, the slowing European economy, improving Asian economies, sanctions, Russia, Ukraine, Crimea, Syria, Iraq, Portugal, Israel, Gaza, Peace, War, Ebola virus, missing airplanes, and now Argentina screams “BANCA ROTA”! (Spanish for Bankrupt) - not that this news was unexpected either!
No wait – some are even saying yesterday’s unit labor cost report tipped the scales– REALLY? Does anyone really believe that this one report that was slightly stronger than the expectation caused the mkts to shudder and collapse – down 1.8% and 2% respectively?
Or is it the possibility that today’s Non-Farm Payroll report will offer further evidence that employers are creating jobs at a rapid pace – pushing unemployment into the 5 category? Is a potentially good jobs report – a further negative for the mkts? Will better job creation signal that the US economy is turning the corner - causing the mkts to tremble? Will we ‘feel the earth move again today?’
Another strong report will cause everyone to ‘re-speculate’ what Snow White and the 7 Dwarfs will do now? James Paulson of Wells Capital sums it up this way
– "If we really got a hot wage number and both the unemployment rate goes to a five handle, I think there's a possibility people will move up their rate hikes expectations by year-end,"
Again – didn’t we know this? Have we not been yapping about this for months now? Have investors/traders just chosen to ignore all of the possibilities? Well – not so fast cowboy…..there have been some that had clearly made this bet – they were the guys who have been 'selling stocks' all along during the last 5 or 6 weeks….right? Yes there have been buyers pushing the mkt to new highs – but those buyers bought stock from someone….and those 'someone’s' put the cash aside waiting for ‘the sale’……
The question is – how much of a sale will we get? 5%, 10%, 15%? …and that is the magic of the mkts….
The correction has remained a bit cagey….right. Especially since the Fed has not delivered any real time table of higher rates....speculation yes, conversation, yes - but what is lacking is that traders want to know 'on what date'! On Wednesday – in fact if anything – she said that rates would continue to remain low….even with the generally good economic data and robust corporate earnings and guidance. So it will be interesting to see how this unfolds today….remember yesterday was also the last day of the month – today is a “NEW DAY and NEW MONTH”.
So - is it inflation that is concerning traders all of a sudden? Not so much.....you see yesterday’s weakness was also accompanied by dollar strength, oil, gold and silver weakness - so if the mkts were worried about inflation - we did not see it in these asset classes......
Exhaustion and some fear - yes an yes and we saw this in the uptick in volatility ……The VIX on the other hand rose 27% to 16.95. 27% is a fairly decent move – but remember the VIX has been in the gutter – so put this spike in context – as it remains substantially below the levels of stress it displayed during the GFC of 2007-2010. So any substantial increase in the VIX can cause an 'over reaction' an 'emotional reaction' (and trust me - I know all about emotional reactions) and that is what I think we saw yesterday. Whatever caused it - it did - and it safe to say that one of yesterday's events just broke the camels back.
Was it the Banco Espirito news out of Portugal that this lender has to raise capital? How about the big XOM miss? The Addidas news as they slashed and burned full year forecasts as they scream about the Russian sanctions? Or was it Argentina's default?
No matter what - as an investor you know that mkts rise and fall - if you don't then you shouldn't be in it.... – do not discount the possibility of more ‘risk off’ chatter – but therein lies the opportunity…remember GS last week said they are ‘neutral’ over the next 3 months but remain a strong ‘Buy” over the next year…..so are you buying it?
When stocks go on sale you should treat them like you do a sale a Bloomies….I mean how many times do I hear –
“Honey, I couldn’t leave it on the rack – They were having a sale!"
Speaking of ON SALE! US Futures were down another 13 pts in early trade only to rally back to -8,
Remember - emotional moves create longer term opporutnities. We have broken through intial support at 1952 (50 DMA) and now look to the 100 DMA at 1910...right here....after that then expect the momo guys to kick in even harder and potentially test the 200 DMA at 1857! If so - then it would wipe out the whole year to date move.
Take good Care – Enjoy the next week without me - I'll be all charged up when I return.
Salmon Filets in a Lemon Dill Sauce
Here is a great Salmon Filet dish – courtesy of Margaret P. It is easy to make and you can eat it either right out of the oven or serve it room temp at a Sunday brunch –For this you need:
1 ½ cup of mayo, ½ c prepared mustard-not yellow preferably a brown mustard, I tsp lemon juice, 2 tsps prepared horseradish, 2 cloves garlic, ¼ cup Fresh dill—must be fresh, S&P to taste, 2 pound salmon fillet
Start by seasoning the filet with s&p. Set aside.
In a bowl combine the mayo, mustard, lemon, horseradish, garlic, salt and pepper to taste and dill. Spread the dill/mayo concoction on the flesh side of the fish. Bake skin side down in a 350 oven for around 30-40 minutes or until it reaches your desired wellness.
Buon Appetito.
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