Goldman Again Selling Russell 2000 To Muppets

Tyler Durden's picture


It seems like it was only yesterday that Goldman initiatied a long in the Russell 2000, only to prematurely close the trade a few days later. Sure enough, here it is again. So, dear muppets, you are to buy all the 'elephants' that Goldman has to sell. As for the three letter acronym: just use RUT.

Recommending a long position in Russell 2000


We are recommending long positions in Russell 2000, with an 870 target and an 800 stop. Today's first glimpse of the March US data -- the Philly Fed and Empire Manufacturing surveys along with the weekly claims numbers -- show that the US cycle continues to expand. And improvement is these surveys also suggest that last month's wobbles, most visible in the Manufacturing ISM, were just that. We are aware that waiting for more data may have made us a bit late to this trade – and that the guts of today’s surveys are a touch softer. But with the market having de-rated its growth views lately, we think the recent news is good enough to want to take on exposure through the more intensive data period of the next few weeks.


Given a still intact expansion, there are a handful of assets that are not, in our estimation, fully reflecting this. Having closed out of a Russell 2000 position two weeks ago, we see this as a clearly lagging market (which unlike the SPX is not yet through February highs), and a market that is typically higher beta, leveraged to growth views and tilted a bit toward domestic rather than global exposures. We have also commented extensively on the fact that cyclical stocks have lagged defensives (our Wavefront Growth basket is an obvious example) even as the S & P 500 has continued to climb. Simply put, the implicit view of forward economic growth is less optimistic than it was just a month and a half ago, despite clear signs that things continue to improve. That said, with the clearer signs of improvement in the more domestic data set, relative to a more mixed picture out of places like China and Europe, we have opted to put our longs in an implementation that is more tilted domestically to the US. We will continue to monitor the incoming cyclical news closely.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 03/15/2012 - 12:48 | 2258383 Comay Mierda
Comay Mierda's picture

good news, i was wondering when the perfect time to short would be.  goldman is the best contrarian indicator, even better than cramer

Thu, 03/15/2012 - 12:51 | 2258395 Zero Govt
Zero Govt's picture

Yep, Cramer's not good for anything much these days

Thu, 03/15/2012 - 13:30 | 2258564 GovtMediaLiars
GovtMediaLiars's picture

I hate to say it but this time I have to agree with GS. Assuming continuing overall market strength my analysis suggests that the Russell 2000 index (RUT) is indeed in the best position for significant gains.
Of course, the underlying assumption of continuing market strength could be a potentially painful assumption.

You can catch a brief summary of my view on the RUT relative to other indices in yesterday's and prior index updates.

Frankly my confidence level in predicting any directional movement from here is pretty low though. These markets are hardly worthy of analysis anymore, sadly. 

Thu, 03/15/2012 - 13:39 | 2258591 sablya
sablya's picture

The $RUT is the only major indicator which hasn't broken out yet.  Methinks they're trying to get the tail in the door before it gets slammed.  If the $RUT fails to break above 832 (today?) then the breakouts in the DOW, NASDAQ and S&P500 all come into question.  So, of course they want to pump the R2K!

Thu, 03/15/2012 - 14:14 | 2258704 Atlantis Consigliore
Atlantis Consigliore's picture

Stay tuned new TV show


The MF's;  The Muppett-F**kers;   advised by the Wall Street ANAL-ysts  LOL  Schtupped Again, and again, and again.

Thu, 03/15/2012 - 12:50 | 2258385 Dr. Engali
Dr. Engali's picture

This time they may be right. Since this is a one-way market.

That was sarcasm by the way. For those of you too slow to understand. You know who you are.

Thu, 03/15/2012 - 12:48 | 2258386 Zero Govt
Zero Govt's picture

"As for the three letter acronym: just use RUT"

R U Thick?

Thu, 03/15/2012 - 12:49 | 2258388 Danks18
Danks18's picture




If the Biderman Market theory is correct (corporate buybacks are the marginal source of market buying), does that not explain (partially at least) the relentless end-of-the-day ramps into VWAP closes that we have seen over the past 6-12 months?


The banks/algorithms that run the buyback programs can buy with impunity under the VWAP level, knowing that they have an “unlimited” buyer at VWAP.


The “efficiency” of buyback programs is based on their ability to buy at or just under VWAP.


Thu, 03/15/2012 - 12:51 | 2258396 CvlDobd
CvlDobd's picture

Mike Birbiglia just tweeted a joke about apple stock.

Come on peak insanity!

Thu, 03/15/2012 - 15:24 | 2258980 Bunga Bunga
Bunga Bunga's picture


Thu, 03/15/2012 - 12:51 | 2258398 carbonmutant
carbonmutant's picture

Are we back to BTFD...?

Thu, 03/15/2012 - 12:54 | 2258410 Al Huxley
Al Huxley's picture

Only if you can find a 'fucking dip' to buy.

Thu, 03/15/2012 - 16:04 | 2259156 resurger
resurger's picture

This is the DIP! buy now before AAPL is $1,000 before May



Thu, 03/15/2012 - 16:07 | 2259173 JonNadler
JonNadler's picture

the DOW did drop half a point at 2:30, you have to be quick

Thu, 03/15/2012 - 12:57 | 2258402 Aquiloaster
Aquiloaster's picture

Is this one of the  muppets they are talking about?

Thu, 03/15/2012 - 12:53 | 2258403 Quintus
Quintus's picture

Look at those iMuppets go!

Thu, 03/15/2012 - 13:15 | 2258408 LouisDega
LouisDega's picture

Blue Horseshoe says Oscar the grouch loves Apple and Grover loves NFLX

Thu, 03/15/2012 - 12:54 | 2258409 gimli
Thu, 03/15/2012 - 12:54 | 2258411 xtop23
xtop23's picture

Goldman got the red phone call that Bernanke is going to hit the gas soon?

Thu, 03/15/2012 - 12:54 | 2258414 Sophist Economicus
Sophist Economicus's picture

Herd mentality (and this is being mean to herds with 4 legs).    Wonder how long this will last

Thu, 03/15/2012 - 12:56 | 2258420 AN0NYM0US
AN0NYM0US's picture

alright maybe there is a bubble in Canadian housing


Toronto bungalow sells for $421,800

Thu, 03/15/2012 - 13:02 | 2258446 Midas
Midas's picture

Uh, you need to re-read that article. It sold for 421,000 over the asking price. It went for 1.18 million.

How does this story end? I can barely remember....

Thu, 03/15/2012 - 13:05 | 2258455 xtop23
xtop23's picture

Hysterical. A cool mil for a shack right? 

Why the Hell not.

Personally, I'm anxious for that bubble to pop then I'm going to run my little ass up there and buy property on the cheap.

French slum lord bitches. Sacre Bleu !


Thu, 03/15/2012 - 13:09 | 2258476 Village Smithy
Village Smithy's picture

There was a post here at ZH a few months ago warning of this, if China started to collapse money would be pulled, in a hurry, and re-deployed in less volatile regions.

Thu, 03/15/2012 - 13:02 | 2258450 Sutton
Sutton's picture

Thanks for the tip Mr. Blankfein.

But why not just buy it yourself?

Thu, 03/15/2012 - 13:12 | 2258490 gabeh73
gabeh73's picture

always thinking of the client first ;)

Thu, 03/15/2012 - 13:03 | 2258451 Village Smithy
Village Smithy's picture

My only caution here is that there are numerous divergences in the market right now and that may be holding some money back. The Russell underperforming in a bull market is one example. Manipulate these divergences ie. move the Russell from underperforming, to outperforming, and you give a green light to a whole new group of investors. I'm beginning to feel like the train wreck is much further along than we would like to admit.

Thu, 03/15/2012 - 13:09 | 2258480 TradingJoe
TradingJoe's picture

Short IWM?!?! :)))

Thu, 03/15/2012 - 13:22 | 2258527 uno
uno's picture

Hollywierd needs to have a Muffet fundraiser like they did for Haiti, maybe someone could start a non-profit


Thu, 03/15/2012 - 13:34 | 2258570 luckylogger
luckylogger's picture

I never thought about it like that.... you are spot on!

Thu, 03/15/2012 - 13:41 | 2258605 JohnKozac
JohnKozac's picture
'Muppetgate,' Costs GS $2 billion


About $2 billion if it’s Goldman Sachs.

That’s how much of the bank’s market value was wiped out after one of its directors, Greg Smith, resigned from the company and penned an op-ed piece in The New York Times attacking the firm’s culture and treatment of clients.

The bank’s shares fell 3.3 percent in trading Wednesday as London-based Smith’s article set Wall Street and the media ablaze with discussion about the behavior of big banks bailed out by taxpayers after the financial crisis. The share price decline meant Goldman lost some $2 billion in market value. Its market capitalization is currently just short of $65 billion.

Thu, 03/15/2012 - 13:59 | 2258656 Odin
Odin's picture

sooo time to buy TZA then???...


.....someone should make a muppet of Blankfein.....Actually come to think of it he kind of already looks like a muppet...

Thu, 03/15/2012 - 14:07 | 2258686 bugs_
bugs_'s picture

I'm glad Goldman is on board with this.  A cnbc guest made a good point this morning - as the dollar strengthens it might be a good idea to rotate out of the large cap multinationals and into the small caps.

Thu, 03/15/2012 - 14:25 | 2258743 calgal
calgal's picture

I can't get enough of this Muppet Madness!!! hahahahaahahahahah

Thu, 03/15/2012 - 14:47 | 2258827 Fast Twitch
Fast Twitch's picture

Put some lipstick on that miss piggy


Thu, 03/15/2012 - 19:54 | 2259956 iamgogi
iamgogi's picture

Husband :  "What is that voice I hear in my head???"




Husband: "Get Johnnys college fund, honey, I have a gut feel about the Russell 2000 this year"

Thu, 03/15/2012 - 20:31 | 2260079 Burticus
Burticus's picture

Read carefully.  Squiddy ain't sellin' no elephants.  They're axing TO the elephants for the muppets!

The Giant Vampire Squid is doing Gawd's work by axing (dumping) their derivative dawg$#!+, spray-painted gold and stamped AAA by their raping agency whores, to bloated lumbering institutional elephants for FeRNs harvested from all the hapless muppets' 200.5(f)s.

Do NOT follow this link or you will be banned from the site!