Stocks Look To Next Game After Patting 'The Nanke' On The Back

Includes: DIA, SPY
by: Jay Norris

Whenever you get a group of experienced market operatives out for an evening, I guarantee you that the stories of hard times far outnumber the stories of good times. It's only natural that surviving traders and other decision makers would be humble, at least amongst their own - as the old saying goes: "there are no atheists in fox holes." There is a camaraderie born among us all, whatever our endeavors, for having gone through the good and the bad and still shown up the next day, and the next day, and the next day, etc. Among market operatives it's just bad luck to toot one's own horn, or even talk about the good calls. It is however acceptable for a colleague to give an occasional pat on the back to another and briefly reminisce about "that time you got 'em good" … smiles all around and glasses raised. At times like that Timothy becomes "Timmy", and Charles becomes "Charley" and the Chairman himself becomes "The Nanke." But before it comes to that, they have to remember back to '05 and '06 when they raised the Fed Funds rate from 2-1/4% to 5-1/4% because they thought everything was "ok," and it wasn't - see chart. They won't make that mistake again. But darned if it wasn't the fire they found themselves in then, which gave them the experience they needed in '08 and '09.

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And no matter what you, me, or the online avatars have to say about it, the most important player in the game, old Mr. Market himself, has bestowed the congratulatory pat on The Nanke's back for the 1st quarter's performance.

After reminiscing about hard times for the first 3/4rds of the evening, and back-patting for another 1/8th, a warm feeling envelopes the club and they look forward through the lens of a couple of cocktails and cast out a bit of optimism for the rumored acquisition later in the year. They love his name; it's downright sporty, as in "come on man, grab a Mitt and get in the game …" He could fit right in ... Albeit with a straight tonic; a designated driver for the whole team! "Can we really be so lucky!?" they have to be asking. A commander-in-chief with a real track-record of success, who may actually understand the risks they take? A boss who like them, knows what it's like to take a loss, even a succession of losses, yet sticks to the plan, and keeps coming to work every day with an understanding and supportive attitude. Perhaps with a new boss the team could get back on top in more than just in a relative way? Hope does spring eternal, and as the old say goes: "Pessimists don't make money on Wall Street."

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.