Not seeing it

Was early into this rally and out much too early.

But I still can't quite see it, myself. From my mate Gary Balter at Credit Suisse:

Supplier/Competitor Datapoints Lack the "Less Bad" Tone of the Market
Last night and this morning we received several datapoints on the home
improvement market with earnings reports from Tractor Supply (TSCO),
Black & Decker (BDK) and Danaher (DHR) and March existing home sales
data. The datapoints lacked the “less bad” tone that we’ve seen throughout
the rest of the market and other segments of retail. Sales trends and
management commentary suggests end market demand remained weak
throughout 1Q09 which we view as an incremental negative for HD and
LOW and should temper some of the enthusiasm for 1Q09 earnings to be
reported in late May.

And when I saw the management of Neptune Orient Lines (NOL) the message was quite unreservedly bleak - not just for the container shipping space (where supply side dynamics are, if anything, worse than the almost nonexistent demand picture, and where any stability in rates is from temporarily reduced capacity, just literally bobbing up and down out there.) Yes there's been some restocking, but to very low levels from the almost complete suspension of international trade from November to February.

So I am not a buyer and remain small short (though slightly tempted to reverse that if a firm base is formed here or lower) with a wider short if Beta adjusted. I still don't think that we will breach previous lows, but up here it's looking quite risky.




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