Afternoon T: Up, Down, and All Around

I can’t believe it’s only Wednesday. It has been a whirlwind week, in fact a whirlwind two weeks.

 

With all that is going on, I figured I should clarify where I stand, as it’s been hectic. This note is more fun to write because I managed to do the opposite of getting whipsawed – I don’t know if there is a word for that since it happens pretty infrequently.

 

I had got bullish last week and progressively more bullish.

 

Then the Greek “deal” came out Monday. I didn’t like it. I recommended getting out of risk overnight.

 

Then in the better lucky than smart category I mentioned the possibility of some negative posturing of fiscal cliff.

 

In the end the markets sold off because of the cliff comments from Reid and the other guy.

 

Then Europe continued the weakness and some more people spotted the problems with the Greek deal.

 

I remained less positive and was waiting for 1,390 to consider adding.

 

Just after the housing data I sent a note to clients to sell IG19 at 104.5. That was my first add to risk. Then I came away thinking Obama was very positive (or less obnoxious than before) and got fully back into risk mode. I still think Greece deal is weak, but we can motor through to 1,430 (the overnight election highs) on fiscal cliff, QE, seasonality, and the “chase for yield”.

 

I had really thought the politicians would leave us dangling for a few more days, but as soon as I heard Obama, I shifted back to full risk on as it was a changer.

 

Maybe it’s bad to change views so quickly but I think these are big issues, particularly fiscal cliff and it’s just as bad not to adapt to new information.

 

On another note, I want to trademark 6.5 beer. The beer will be 6.5% alcohol, will be marketed to the American Pie, and will be the brew of choice that lament what the Fed is doing to the country by continuing to ease and grow the balance sheet until we hit 6.5% unemployment. Deep down I think the only way we get to that level is is by redefining employment.

 

I think credit is going to do well. Stocks too. The one big doubt I have domestically is that Apple seems up against resistance here and it is hard for the market to go up much without it – why I like S&P more than Nasdaq. With the weak Greek deal it is hard to like Spain or Italy, which leaves me with China.

 

Come on and drive your Chevy, the levy is dry and raise a bottle of 6.5.