Musical Chairs
The Bulls continued to taunt the Bears by holding most of yesterday's gains. Despite the weak ISM report that showed the economy is softening, the bulls managed to keep hope alive and even closed the small cap index Russell 2000 in positive territory. The major indices are back to their 50 day moving averages. In fact, should the S&P 500 close between 1225- 1230 the bulls may start getting slap happy and rally the market to the highs of the year.
What is their rationale? The glass half full crowd is counting on the Fed to pause. Recent data suggest that the Fed has room to do so if they wish. Perhaps for political purposes they may, however we are confident that the Fed would resume their tightening campaign as soon as stability in the economy was evident . The Fed is simply not done with their tightening agenda due to perky core inflation and the housing bubble, as we discussed in prior posts.
The excitement over a temporarily benign Fed is enough to get the bulls all lathered up. This was the reason that we have decided to slightly alter our portfolio position to a more neutral stance. We used the dip mid day to cover our QQQQ short. We even added some longs: CSCO, ELX, TXN. Our exposure is now aprox: 48%.
We are comfortable with this relatively neutral bias for the moment. However, we are scrutinizing the internals of the market for any signs of slippage. We will not hesitate to eject some of our exposure faster than Warp 10. Tommorrow is the jobs report, and the market does not know what it would like to see. Lots of jobs places a cushion in the economy for the expected slow down. However , too few jobs further fuels talk that the Fed will pause. Eitherway, we see a good case for the bulls to party on.
If You Held a Taser to Our Head: Yes, we are playing musical chairs with the immature bulls, but we are keeping at least one cheek on the chair at all times.
Have a good night.
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The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (âKTBâ) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (âKCAPâ) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firmâs principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________
What is their rationale? The glass half full crowd is counting on the Fed to pause. Recent data suggest that the Fed has room to do so if they wish. Perhaps for political purposes they may, however we are confident that the Fed would resume their tightening campaign as soon as stability in the economy was evident . The Fed is simply not done with their tightening agenda due to perky core inflation and the housing bubble, as we discussed in prior posts.
The excitement over a temporarily benign Fed is enough to get the bulls all lathered up. This was the reason that we have decided to slightly alter our portfolio position to a more neutral stance. We used the dip mid day to cover our QQQQ short. We even added some longs: CSCO, ELX, TXN. Our exposure is now aprox: 48%.
We are comfortable with this relatively neutral bias for the moment. However, we are scrutinizing the internals of the market for any signs of slippage. We will not hesitate to eject some of our exposure faster than Warp 10. Tommorrow is the jobs report, and the market does not know what it would like to see. Lots of jobs places a cushion in the economy for the expected slow down. However , too few jobs further fuels talk that the Fed will pause. Eitherway, we see a good case for the bulls to party on.
If You Held a Taser to Our Head: Yes, we are playing musical chairs with the immature bulls, but we are keeping at least one cheek on the chair at all times.
Have a good night.
___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (âKTBâ) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (âKCAPâ) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firmâs principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________
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posted by Kleiner Capital Management, LLC. | 4:40 PM
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