Last Week’s RR&A Market Letter was picked up over the weekend by the print edition of Barron’s; Here’s what they ran in the MARKET WATCH section:
RR&A Market Letter
Ritholtz Research &
230 Park Ave., New York, N.Y. 10169
Aug. 16: The past quarter’s data show raw materials rose at an annualized rate of 43%. You read that correctly.
So where does that leave us today?
The consumer-price index today showed more inflation than yesterday’s producer-price-index headline; but the core (inflation ex-inflation) was a little light. We prefer to rely on the trend, rather than the outliers, and this number broke the trend of four-straight higher CPI numbers. Since the market chose to ignore the actual basis for the dis-inflation yesterday, today’s action may very well be a tell: If the markets rally them anyway, look for owners’ equivalent rent to become the excuse. [The Dow rose 96.86 points Wednesday.]
The reality is that it is an options-expiration week, and traders seem to have higher prices on the collective hive mind….There’s too much pent-up energy, index shorts are too crowded, and we suspect there are too many funds that are underinvested. Thus, we have the makings of a short-term pop, which could last from four days to four weeks. These are the times where data [are] irrelevant-to paraphrase Thin Lizzy, "When the boys want to play, you better let them."
– Barry Ritholtz
MARKET WATCH, A Sampling of Advisory Opinion
Barron’s MONDAY, AUGUST 21, 2006