Tuesday, November 17, 2009

16/11: Stocks soar on a bullish retail sales report. Also, words on Wicker Park!

Before this evening's tardy report on Monday's market action -- a happy day, with strong gains in my desk's prop trade -- a few tangential words.


The past few days, to which some readers of this living document can attest, have seen the author make a significant discovery of a vibrant, uplifting neighborhood just down the life-blood Milwaukee Avenue from more usual haunts. These new environs are Wicker Park / Ukrainian Village. And what an emphatic improvement on my hitherto-frequented portions of the city: Jefferson Park, Portage Park and Six Corners! This near-northwest side district boasts independent, cutesy coffee shops (if one knows where to peek); young, purposeful people on the sidewalks; sushi spots and legacy Polish bars in unlikely side-by-side existence (this area used to be the primo Polish 'hood). I could go on, and should, yet it's a topic for another day.

In sum, I've energized my routine during the last few days by repeatedly returning to this oasis of existential salvation; and upon this fortunate scapegoat and the associated investments of time, the most precious resource of all, I project the blame of my missing Monday report. Yes, such is my story!


Monday's markets, in any event, witnessed soaring equities trade in the United States and its geographic precursors into the new trading week. A bit of keyboard tickling about these foreign locales and their trading: It's interesting to note that the forex markets, some of which I recently started tracking closely -- (even though I can't trade them at present, currencies' pronounced correlation of late with equities merits keeping a close eye on them and, in particular, upon the 500-pound gorilla of the group: EUR/USD trade) -- are only closed for some 48 hours a week: in roughly New York City time, no trade occurs only between late Friday afternoon and Sunday evening, when Monday morning trade in Tokyo commences. I mention this because, by Monday evening, nearly 24 hours of continuous trade has already elapsed on the world's interconnected, virtual marketplace -- a calming consideration to the trader primarily obsessed with the P/L of the local stomping ground, i.e. Wall Street, only. (I raise a guilty hand.)

Sentiment on Monday was buoyed by a bullish retail sales report released in the pre-market and, in the all-important technical analysis sphere, by the S&P500's durable break above 1100 -- prior attempts in the last few sessions were all short-lived -- and the Nasdaq's flirting with 2200. The last hour of trade, however, brought a sharp, though not menacingly deep, correction catalyzed by the caustic comments of noted banking industry analyst Meredith Whitney, which were carried by that quintessential soapbox of market-makers, CNBC. Ms. Whitney, in her infinite wisdom, -- she did, after all, delphically prophesy the banking industry's existential crisis as early as October 2007 -- proclaimed on Monday that she's currently more bearish on banking than at any time in the last year. Why? I haven't seen any reasoning behind her brash, hyperbolic pronouncement but, then again, missed the CNBC special. (I had seen a teaser and incorrectly assumed the forthcoming would be with the less-exciting Meg Whitman, the eBay founder).

The post-Whitney selling pressure, in any event, did not hurt indices by much more than a half percent, although the bite from the (hitherto soaring) value of my QQQQ calls was nonetheless felt. Whitney, 2; your fearless author, 0. Yes, I was already burned by Meredith once this summer, when my ownership of Goldman Sachs (GS) calls coincided with one of her trademark uber-bearish publications.

Charts shall have to wait for the next installment. In the meantime, a few brush strokes of Ms. Whitney (did I mention she's surely one of Wall Street's most attractive analysts?) --

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