A few nutty things happened in equities today, which more or less makes today a normal day. Research in Motion got ratcheted 3.7% on no news that I could see. The action in the stock appeared to be totally technical and momentum-driven. Its nutty solely because the present value of future cash flow for this company is probably south of $20 per share. But anything can happen when liquidity is flowing.
Bag o nuts number two was the metal stocks, particularly the silver miners. These equities fell 2-3% today on minor drops in the underlying metals. Furthermore, crude oil shed almost 5%. Wasnt it concern over energy prices that was previously hurting these stocks? One would think weaker oil would bolster the miners.
Bag o nuts number three bleongs to the homeys, which were down about 1.5% across the board. With the S&P setting (but not holding) a new 4-year high today, one would think these barons of excess would have put on a show. Well, they did initially, opening up across the board. But it was downhill from there. KBH closed 2.7% off its high, CTX 3.4% off its high, and TOL 3.4% off its high. Today was a bigger reversal day overall than the KBH earnings day almost a month ago which many traders, including myself, thought may herald a top. Today was the kind of day that could herald a top, as well. With the S&P500 setting a new 4-year high, perhaps enough bears have been shaken for us to begin the inevitable wealth deflation.
Disclosure: Short RIMM, CTX. Long TOL Puts