Picking Each Other's Pockets
By David Fry | August 14, 2008 | 10:09 PM | 1 Comment
Trading desks and hedge funds have plenty of cash on hand to pick each other's pockets. This is happened today in my opinion especially with financials which have become "trading" vehicles. After some days of decline it was time to squeeze whatever short sellers were bold enough to carry positions for more than a couple of days.
The main story remains the decline in energy and other key commodities coupled with a rising dollar. This is stimulating equity bulls who then ignore mostly terrible news from inflation, housing and, well, you name it. How long this can last is anyone's guess since a rising dollar and falling commodity prices may just signal global economic weakness rather than US economic growth.
Volume was below average and breadth was good. You can infer by volume data in the NASDAQ the focus is on bigger names. And, don't hold your breath but I think Yahoo Finance has fixed their math problem.
That's it for the Fryguy this week. Tomorrow is the always entertaining options expiry where strange things can happen. Traders aren't paying too much attention to economic news. Whatever bad news there exists is dismissed as so much inconvenient old news. Rather, bulls are focused like a laser on oil prices and dollar action believing a repatriation by US investors and move by overseas investors to the greenback is US asset supportive.
My own opinion is that Da Boyz are just picking each other's pockets.
Have a great weekend.
Disclaimer: Among other issues the ETF Digest maintains long or short positions in: IWM, QQQQ, QLD, IBB, XLP, UGE, XLV, RXL, UUP, DRR, GLD, DZZ, DBC, DEE, USO and XLE.
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