Hank, for a short time I might be in the 0% to 5%, but that usually grows to about 10% to 15%, as I pull in some well earned profits (even today, I managed too "pull in" more than 10% on MERQ-in three trades) which I use for "fast trading". I see a good five to six weeks of ramping up this market, and it might be best staying long some of the basic positions I have, without too many raids. Come the middle of April, I think that the story will change.
I fear that the feds have done too much pump priming, and after they get through their "open" action of stimulating by reducing rates on the 20th, they will start and soak back some of these billions they have pored in the market in the last two months through their repos actions. It seems that Fisher, just before leaving for Washington (from his trading desk at the NY fed's open market operations) injected another $8 B into the system in the last two days. That has been going on since the beginning of the year, and I could discern only two "soaking" operations during that time. This bulge of liquidity is going to find its way into the market, but just as the mood will improve (liquidity, fed cuts etc and the refrain "the worst news is out"), we will run smack into a double reality, Q1 actual earnings and the feds forced to soak liquidity. This together with many other indicators and observations lead me to have the April 16th or so relapse in the market.
Zeev |
