Marketview: Juking The Stats FCX, GS, BAC, CL, PG, BMY

• Posted by DynamicHedge
• on October 29th, 2011

This week allowed a lot of funds and money managers to get out of a big hole.  So what?  Don’t dwell on it.  This is just the reality of the game.  You can throw money at a problem and make it go away — temporarily.  A coordinated risk-on play is just what the doctor ordered to torch the shorts and deliver a rescue quarter.

We saw accumulation, then appreciation, and up next is distribution.  This rally was huge and while the majority were chasing it up, it’s still very unlikely to just snap back and turn bearish right away.  We need a week or so to digest and allow for short sellers to lick their wounds.  Look out for a post on Nonfarm Payroll weeks tomorrow.  Spoiler alert: the market mostly goes up in 4th quarter NFP weeks (but they often mark a pivot point for the market).

There is no doubt that the world is looking good.  Overall, corporate balance sheets are healthy and companies are doing well in this environment.  The problem is is the large sentiment overhang leftover from the crisis period that we have to work through.  The public has got to get back on board before there can be meaningful new highs in the equity market.  The hot money trade can lift us off the bottom, but it can’t really take us into the promised land of clear blue skies.  While I don’t feel we’re going back into the depths of 2009, I think that we have a two-way trade for the foreseeable  future.  In other words: watch for signs of distribution.

Not much to add to the discussion this week.  Financials and basic materials went through the roof and the safety trade was forced back to the sidelines.

Winners: $FCX, $HAL, $NOV, SLB, $CAT, $MS, $GS, $BAC

Losers: $CL, $PG, $BMY, $WMT, $HD, $LOW, $SO, $MO

Winners:

Losers:

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