The Local's Take: Afternoon Commentary

Good Afternoon,

This will be a quick post, touching on important topics as I am in Denver and I have conference attendees looking over my shoulder. I know that I am missing out on the snow in Park City and I have a busted ankle, so I can't enjoy it anyway. I have two more presentations today and one more tomorrow, speaking about hedging your businesses COGS. Appropriately, this article was a headline on Bloomberg today. Trucking companies, coffee shops, you as in individual are at risk. We are all long the economy (jobs, real estate, portfolio's, businesses, et...) and if our government has put us at risk due to an accomodative policy and inflation gets out of hand or on the flipside, we stagnage as spending comes to a halt, then we are all out of luck and understanding how to hedge is of key importance.

Let's take a quick look at SPY:

This is the chart over the last few days and most of you know I have been aksing for some tiime decay. Well, we got it for 5 days, but we still have 5 more to go and this chart has me worried. Why? Look at the closing price versus the low price. How many times did we go down this week, only to rally up. Today is another example. We are heading into the weekend with 48 hours of risk and the market was bought back up in the final minutes. Each day we closed off our lows.

The markets do not care (currently) about Japan and the state of things in Washington. They are bullish and they have a very strong underlying bid.

In the forex markets, it was a sideways day as equities stayed relatively rangebound, but looking at the longer term, trends are in place and gaining more force as other economies start to raise rates with talk about further raises soon. Nothing from the US other than the hint from Bernanke that we will "do something" if inflation proves not to be transitory. Maybe oil prices will be at 140/bbl before we raise interest rates.

Looking ahead, we have G7 meetings, earnings reports begin, unemployment claims, inflation data and retail sales. A very, very busy week!

Happy Trading and Be Environmentally Cool

Coach Brian