Ground Hog Day


The Groundhog predicted an early spring on the east coast. But will the markets repeat last year and have another downdraft like last February's VIX-induced sell-off? January has proven rather benign given the December tantrum in the markets triggered mostly by fear of a Fed policy mistake. Equities are up roughly 15% in January - to finish the year with that kind of return would be a welcome outcome for many.

Perhaps 2019 will actually be the year that some people have been hoping for - a return to "stockpicking". The fact that consumer staples conglomerate Clorox (CL) can spike +10% on an eps report with 0.70% better gross margins is enough for me to say the markets are not truly that "efficient" and there is still incentive to play the game.

I have taken to the sidelines in FX and have been caustiously making smaller long plays in stocks - on weakness like after PYPL's quarter, buying in high $80's and selling in low $90's. Similar play in AMZN: post Qtr good #'s, in-line guide, stock sold-off 5%, nimble long and trim - holding time can be several days so it's hard for me to be all-in.

It "feels" like many people are wary of another external shock like US-China headlines or further EM instability. THe market is always good at finidng pain points and that could point more to risk of further upside

My home ALGO is signaling overbought conditions in most big-name FANG and top Nasdaq names while signaling Buy on SNE (Sony) and AMRN (Amarin).

Cautiously watching the market post-GOOGL eps.