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Kevin Flynn, CFA

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  • May Is The New April, But Is The ECB The New Fed? [View article]
    I bought SDS today.
    Jun 6 05:21 PM | 2 Likes Like |Link to Comment
  • How Stocks And Bonds Can Both Rally On Nothing [View article]
    Thank you happyshorter. It's very kind of you.
    May 30 07:46 AM | Likes Like |Link to Comment
  • How Stocks And Bonds Can Both Rally On Nothing [View article]
    I track dollar volume. You make a good point - I think the last leg of auto buying has been fueled by an aggressive program of subprime lending that is bound to run out of candidates soon.
    May 29 03:15 PM | Likes Like |Link to Comment
  • How Stocks And Bonds Can Both Rally On Nothing [View article]
    Thanks guys
    May 29 11:19 AM | 1 Like Like |Link to Comment
  • How Stocks And Bonds Can Both Rally On Nothing [View article]
    Thank you gentlemen. I would suggest that the VXX has fire-alarm status in equity-land. The fact that it doesn't go off (stays very low) for long periods of time doesn't really bother the stock market, though some may wonder now and then if it still works. Most traders only care about whether it goes off or not (breaks out above 20 or so).
    May 29 08:49 AM | Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    The occasions when I truly feel confident about short-term market direction are pretty rare - Mr. Market loves to punish hubris and the sure thing.

    This is a probabilistic business. Just because the market should go up and down, doesn't mean it will. Didn't Cleveland just snatch the #1 pick in the NBA draft with something like a 1.7% chance of success?

    Here's a metaphor - if I look at the underside of this market, I think, gee, one good pothole and we're in the ditch. We still have to hit a pothole.

    In the middle of 2006 - 2006! - you could see that the US economy was starting to seriously tank. Hardly anyone cared. Traders just chanted "global growth" and kept buying. I remember traders constantly telling the cameras (loudly) that the newly-acquired taste for protein had the developing world on an unstoppable growth binge. They drank the kool-aid. The latest Barron's has a lead article declaring that consumer confidence - consumer confidence, which peaks just before every recession! - leading us to the promised land. Don't underestimate the market's ability to believe in the very same counterfeit currency it's printing up itself - or in Keynesian terms, stay irrational longer than you can stay solvent. Just because we're primed for a swoon doesn't guarantee that we will.

    Keep in mind as well that although the economy isn't presently heading for 4% real this year, it isn't headed for recession either. Not this year, not without an external shock.
    May 24 10:27 PM | 2 Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    The last NYSE short-interest report showed short interest as of April 30, 2014 to be at a multi-year high
    May 24 09:41 AM | 2 Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    The short answer is that I'm talking about the summer months. The shakier times for markets at this time of year are the late May to mid-June period, and then late July into mid-August. Those are just tendencies, not rules - like charts, they matter most when there aren't larger facts to supersede them.

    The answer to your last question is yes I do, with the proviso that such legs are usually preceded by a last-stage defiance rally.
    May 23 09:25 PM | Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    I have to issue a correction to myself: the measurement period for the May jobs report was last week, not the week before last. The year-year comparison was in line with the 2014 trend, but only half the April rate (i.e., year-year decline), suggesting a less robust number (though not a bad one) in two weeks time.
    May 23 06:29 PM | Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    It began in late May, after Bernanke threw cold water on the markets by talking about a September taper. "Sell in May" refers not to May being a dismal month, but to the fact that the May-October period significantly underperforms November-April. For myself, I worry more about early June and early August at this time of year.
    May 23 06:26 PM | Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    Looking at the surge in subprime auto credit, I would suggest that the car buying has moved into other neighborhoods.
    May 23 04:04 PM | 1 Like Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    I tweeted that out this morning (unadjusted, they are down 4.6% y/y). They are also down 2.6% YTD on a year/year basis. Yet the headlines popping up in my inbox are talking about the "spring momentum in the housing market."

    BTW, the upward revision to March came out of January and February. No change to the quarter.
    May 23 03:57 PM | Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    You could try selling calls on the positions. Not a perfect solution, I admit, but GM certainly looks challenged.
    May 23 11:00 AM | 1 Like Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    One of the most popular trades now for those who can is to be long the SPY and short the IWM (or variations thereof). That posture is going to introduce its own peculiar ripples into the market.

    I think that the shift by equity mutual funds is indeed largely complete and the focus is sector rotation, perhaps most of all on the M&A activity that usually dominates late-stage markets.
    May 23 10:59 AM | Likes Like |Link to Comment
  • Stalking The Mysteriously Elusive Correction Beast [View article]
    The play on words for "witch's brew" was deliberate, not from ignorance.

    The LEI has much less predictive power than it once had, in particular because the short end of the yield curve is being set (and suppressed) by the Fed and not by the bond market - which is why the equity markets are paying it little heed. Real GDP has been running at about half the rate implied by the LEI.

    Since consumption represents 2/3 of the economy, I don't consider 12-month retails to be just any old data.
    May 23 10:54 AM | 2 Likes Like |Link to Comment
COMMENTS STATS
558 Comments
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