We Need Momentum

 | Nov 19, 2012 | 6:42 PM EST  | Comments
  • Comment
  • Print Print
  • Print

How much was post-options? How much was hope about averting the fiscal cliff? Or how much was performance anxiety because last week at this time so many hedge funds decided they couldn't take the losses anymore and had to preserve whatever gains they could muster?

I think the latter played a key role. We were most certainly oversold Friday and this bounce continued nicely today. I just think that with this being a seasonably strong week and with the president calling business leaders to ask for their help you have a scenario that could develop where the hedge funds miss an opportunity to finish up mid-teens, something that they can't do if they are already on the sidelines.

I could see some of the money go into the banks simply because there aren't a lot of gains to be taken so the capital gains issue is off the table with the group. I saw some buying in tech that seemed similar. It was almost perfunctory, as in, "well, I guess I have to play a little so give me something that doesn't have a lot of gains in it that won't disappoint."

To me, this one felt that it might have some legs IF we just get one Republican, just one, of any prominence, saying "there might be more common ground than we thought." We get one person to switch direction, which has been real hard to get, then we have something that will allow us to continue. Without it we refocus on the cliff and on Europe, where France was downgraded.

There needs to be continuous momentum here, or else, frankly. Every day that we DON'T hear something good will be a day when we give up some of today's gains. It is that unsustainable without help from Washington because it is Washington that's put the lid on this market's price-to-earnings multiples.

Columnist Conversations

Lang:
Cutting bait today on a couple of losers in VLO and VMW. The latter wasn't a horrible loss but the former was...
Just a few days back on July 21, I took a long side play into Chuy's Holdings (CHUY) on a reversal. The thesis...
Shares of Whirlpool (WHR) had been down over 5% in the session after the company reported disappointing earnin...
Lang:
We added some calls yesterday, the Aug 38 strike which are flying high today, we'll hold for a bit longer. Th...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.