- German thriftiness vexes banks (WSJ)
- Apple carts or Apple? (Economist)
- The promoter problem in Indian banks... (Alphaville)
- A great Indian deleveraging (Alphaville, related to above)
- US bond volatility at 9-month low (Bloomberg)
Happy Valentine's Day, ya' filthy animals.
I am expecting a pretty quiet day - traders complained yesterday of lower volume due to the winter weather that is hammering nearly the entire Eastern seaboard (saw 2" of ice here in NC on Wednesday). Yesterday, after gapping down following the double whammy of weak retail sales and higher initial claims, shares were quickly bid up into the afternoon.
Clearly, a lot of traders want to be (or already are) short this rally. I read Tom Sosnoff's e-mail every morning, and every morning he drones on about being short. I know Valentine's Day is reserved for the romantically-involved, but perhaps I should send him some flowers and a card that reads, "I'm sorry you're taking it 'in the shorts.'"
Do not get caught trading on the notion that "equities have been up X days in a row! We have to see a pullback!" That, my friends, is the Gambler's Fallacy. Even if this rally is one massive short squeeze; short squeezes can still wreak havoc on your P&L. Just Ask Bill Ackman.
Now for a quick look at where we stand. Higher this morning are European markets after stronger-than-expected GDP data. In Asia, Hong Kong and China are modestly higher, while the Nikkei is down -1.5% as of this writing.
Stateside, Futures are essentially flat (/ES +1.50, /YM +15.00, /NQ +6.00), while spot gold is up 1.3%. The gold bounce has worked well for us this week. It looks like we are going to see a test of resistance near all-time highs in the S&P 500 over the near-term, still remains to be seen where we go from there.
Heads, she loves you. Tails, she doesn't.
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