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January 23 Trading Omens From Art Cashin

Tyler Durden's picture





 

So far today's market action appears to be reasonably tame, with no economic data on the horizon, no real update out of Europe, rumors largely ignored at this point, and all signs indicating a quiet trading session for the rest of the day. But will it be? The only market veteran whose opinion actually matters, Art Cashin, says not so fast, especially if one looks at historical precedent, with a focus on 1987 (which incidentally is the last year in which the S&P moved up as much as it has YTD, only to culminate with Black Friday). Could it be that the quietest day ends up surprising everyone?

From UBS Financial Services

A Market Calendar Oddity – On this day (January 23rd) the market has done some strange, even zany things over the last several decades.

Particularly wild were the January 23rds of 1994, 1997 and the granddaddy of them all, 1987. Back in those days, we had five day settlement of stock trades. That meant, that given the weekend placement, January 23rd might be the last trading day to clear by month’s end.

Let’s look at the action on that day in 1987. It was a Friday, and with that five day clearance, it, in fact, would be the last trading day that would clear in January.

The market had been rallying for the New Year. To put things in better perspective, we’ll put the moves into the equivalent of current Dow points.
The day before (the 22nd), the Dow had rallied the equivalent of 306 points (a record at the time). Despite the prior day’s performance, the rally continued on the 23rd. By 1:30, the Dow was up another 380 points. Suddenly, it turned and dropped like a stone. In a matter of minutes, the Dow as at -306.

They circled the wagons and then began to race higher. In a stunning rally, the Dow was suddenly +65. Then, the trapdoor opened again and the Dow closed down 261 points.

The other January 23rd had similar whipsaw swings but in a slightly more muted fashion. Since we shortened the clearing cycle, January 23rd has been a good deal tamer. But for old fogey traders like yours truly, it’s still a day to carry a second rabbit’s foot.

This year it falls on Chinese New Year, a new moon, and a couple of astrological shifts. That helps focus one’s attention. It’s got mine.

 


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Mon, 01/23/2012 - 10:28 | Link to Comment Spooky Polish
Spooky Polish's picture

Trading lately ? 

 

Like Whoopie Goldberg in "Ghost" , or "Ghost Samurai" maybe ... 

Mon, 01/23/2012 - 11:09 | Link to Comment idea_hamster
idea_hamster's picture

Back in those days, we had five day settlement of stock trades.

Back in those days, we had humans and a market.

There -- I fixed it for you.

Mon, 01/23/2012 - 11:33 | Link to Comment French Frog
French Frog's picture

Was Art not calling the 13th January as a top not 3 weeks ago, if my memory serves me right?

Mon, 01/23/2012 - 10:28 | Link to Comment PaperBear
PaperBear's picture

Sprott is sticking the boot into those naked silver shorts with $300M offering which can take 10M oz of silver into his trust but who knows how long he will be made to wait for all that silver. A further $1.2B is hanging over those naked silver shorts like the Sword of Damocles. We have those naked silver shorts by the balls.

Mr Sprott’s can make a number of silver trust offerings for the remaining $1.2B he has said he intends to float at periodic intervals and the spike we saw between October 2010 and May 2011 following his silver trust’s initial offering will sustain itself all through 2012 and silver will reach its proper market value which is many multiples of the current market value.

I can well imagine it taking Mr Sprott all year to get all of the proposed $1.5B into his silver trust fund and a year form now Mr Sprott will likely propose another investment into his silver trust all of which will have a completely transforming impact on the market value of silver – well done, Mr Sprott.

Mon, 01/23/2012 - 11:47 | Link to Comment Rodolfito
Rodolfito's picture

Agreed. But you can call him Eric aswell as Mr Sprott.

There, fixed it for ya.

Mon, 01/23/2012 - 10:31 | Link to Comment monopoly
monopoly's picture

And as posted here I am 100% cash on this 0 volume ramp. Good feeling. No shorts, no longs and + physical. Art a class act. 

Mon, 01/23/2012 - 10:30 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

Filesonic is down.   The dominoes are falling!  

 

The internet end of dayz is near!

Mon, 01/23/2012 - 10:31 | Link to Comment FoieGras
FoieGras's picture

If Art Cashin is so smart, why is he not running a $500m hedge fund and making himself 10s of millions in the process? Why is he working for a bank, giving interviews to bubble vision and sending out email newsletters?

Mon, 01/23/2012 - 10:52 | Link to Comment flattrader
flattrader's picture

He's an old media whore.

Mon, 01/23/2012 - 14:41 | Link to Comment the_ripper
the_ripper's picture

because hes not greedy and making millions probably isn't important to him and he does his job still because he loves it and it keeps him going.  Not everyone measures success in life as running a hedge fund and making lots of money

Mon, 01/23/2012 - 10:32 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

Back in the old days before they figured out how to remove all the risk from the markets right?

Mon, 01/23/2012 - 10:33 | Link to Comment clones2
clones2's picture

Just went long rabbits...

Mon, 01/23/2012 - 10:51 | Link to Comment flattrader
flattrader's picture

Yum...Just expect the kids in the neighborhood to hate you when they find out what you're doing with them.

An old German guy in my neighborhood raised them for hasenpfeffer.  They called him Mr. Hitler.

The little kids were constantly pestering the older kids to launch a rabbit rescue operation while playing "Combat."

Mon, 01/23/2012 - 10:53 | Link to Comment s2man
s2man's picture

Me too.  Only, they are for eating.  I hadn't thought about the feet as a secondary income... :-)

Mon, 01/23/2012 - 10:35 | Link to Comment Madcow
Madcow's picture

the "animal spirits" across the globe are hip to the fact that the current monetary system is imploding.  

until it is abundantly clear what the new monetary system will be, there can be no entusiasm for new investment - in anything.

Mon, 01/23/2012 - 10:35 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

'That helps focus one’s attention. It’s got mine.'

Absolutely. Keep looking at the stars Art if for no other reason than to distract you from the hell that is being unleashed by the criminally insane class.

Mon, 01/23/2012 - 10:36 | Link to Comment Dr. Engali
Dr. Engali's picture

That second rabbit's foot wasn't so lucky for the old rabbit now was it ?

Mon, 01/23/2012 - 12:26 | Link to Comment ucsbcanuck
ucsbcanuck's picture

Like Taleb's turkey

Mon, 01/23/2012 - 10:35 | Link to Comment Schmuck Raker
Schmuck Raker's picture

"Could it be that the quietest day ends up surprising everyone?" Not now - JINX!

Mon, 01/23/2012 - 10:39 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Got cash and physical.  Everything moving forward will be "unforeseen", same as it ever was.

Mon, 01/23/2012 - 10:44 | Link to Comment trampstamp
trampstamp's picture

Everyone go long!

Mon, 01/23/2012 - 10:53 | Link to Comment I should be working
I should be working's picture

Yeah and Black Monday would be the equivalent of a 3000 point drop in the DOW today.  Sure it would be great not to be in the market on those days, but there is no way to know which days they will be.

Mon, 01/23/2012 - 10:54 | Link to Comment Comay Mierda
Comay Mierda's picture

stocks going parabolic this morning lol.  2012 will be a high return year for the market if priced in dollars.  if priced in gold, it will be one of the worst

Mon, 01/23/2012 - 11:04 | Link to Comment mktsrmanipulated
mktsrmanipulated's picture

how does GS miss revenu by 58% but trades up from 90's to 110----heres the real deal once again like the assholes of the world us americans are extremely short sighted and do not have the ability to stay focused on the debt problems in europ, america or in our own households....i hope this whole fucking sham comes crashing down....

Mon, 01/23/2012 - 15:35 | Link to Comment Silver Pullet
Silver Pullet's picture

It was already priced in.

 

/s

Mon, 01/23/2012 - 11:07 | Link to Comment mktsrmanipulated
mktsrmanipulated's picture

why is the usd and jpy so weak its not that the euro is that strong today...look at eur cad & eur aud-- dont give me a carry trade bs answer ---against the 2 shitty currencies usd and jpy the euro is rallying but against others it isnt doing squat

Mon, 01/23/2012 - 11:10 | Link to Comment EyeQ
EyeQ's picture

Just seeing if I have a pic - 1st post

Hey, I thought I used a plastic bag over my head -

Mon, 01/23/2012 - 11:19 | Link to Comment stormsailor
stormsailor's picture

54 points off the 2011 high on the /es.  bad earnings reports and forward guidance.

 

brilliant.

Mon, 01/23/2012 - 11:19 | Link to Comment stormsailor
stormsailor's picture

54 points off the 2011 high on the /es.  bad earnings reports and forward guidance.

 

brilliant.

Mon, 01/23/2012 - 11:20 | Link to Comment s2man
s2man's picture

So, considering the shortened closing period, can we expect a crash on Thursday or Friday?  :-)

EyeQ, you look familiar.  Have I seen you somewhere before?

Mon, 01/23/2012 - 11:22 | Link to Comment Randall Cabot
Randall Cabot's picture

If Art Cashin says watch for whipsaw swings then watch for a rocket straight to the moon.

Mon, 01/23/2012 - 11:34 | Link to Comment Amused2Death
Amused2Death's picture

Markets look exhausted, the trap doors won't be open today, possibly tomorrow, stay tuned!

Mon, 01/23/2012 - 11:56 | Link to Comment Maffia Accountant
Maffia Accountant's picture

Rabbit's feet are not particularly helpful for good luck Art, The rabbit used to have four of them and look what happened to him..

Mon, 01/23/2012 - 12:35 | Link to Comment brown_hornet
brown_hornet's picture

Out under the HOLLYWOOD sign, the people feet were lucky for the rabbits.

Mon, 01/23/2012 - 13:14 | Link to Comment the grateful un...
the grateful unemployed's picture

gold was also very strong going up to the 87 event. the derivative problem of that day was put selling. hedge funds? were selling far out of the money puts and collecting the premium when it all fell apart. everyone knew the crash was coming, a lot of people made hay of it, Joe Granville for one. thinking back it may be there was some government intervention to precipitate the crisis, since it gave Reagan the chance to create the Presidents Working Group on the Financial Markets, and to pledge the full support of USG to provide liquidity. they reacted to the crash pretty quickly and markets recovered their losses within a year. from then on the fix was in

Mon, 01/23/2012 - 15:49 | Link to Comment HungrySeagull
HungrySeagull's picture

Eh, there is nothing left to worry about unless the shooting starts in Iran.

I got my moves made and the trade set. It matters not to me either way.

Mon, 01/23/2012 - 17:46 | Link to Comment the grateful un...
the grateful unemployed's picture

crash indicators are : gold stocks falling relative to industrials : oil prices falling (any crack in that monolithic wall of commodity asset prices) : perception of economic reality takes a swoon (see Natgas in a death spiral, you think there is economic recovery and no demand?) : a brokered election (no winner, like none, even SCOTUS can't figure out who it is) : Baltic Dry is on empty, the container ships coming to America are empty, no disinflation caused by cheap consumer goods, no way to offset higher food and enery prices with cheap flat screen TVs : end of free credit, new rule of supply and demand, when you can't sell enough of something to justify razor thin margins you have to charge more for what you are selling regardless of how large your inventory might be. : profit margins improve revenue falls

Mon, 01/23/2012 - 19:35 | Link to Comment HungrySeagull
HungrySeagull's picture

Fuck me. I have managed to sit here with a patience of a truck driver waiting to be loaded and rolling on a high dollar load.

NOTHING is moving right now, has not for hours and generally the last day or so after that little bounce.

 

Ya know? I feel like there are a thousand guns showing up in the Market now on bird season... I think I will pick up my silver, line up some cash and sneak away and wait for a nice fat drop and buy it all.

 

Dare I pun and say:

 

Big fat greek drop bitches?

Mon, 01/23/2012 - 20:29 | Link to Comment the grateful un...
the grateful unemployed's picture

it feels like the fix is in, the turkeys all get pardoned. just the gut talking, meanwhile and everyone is betting on QE3, the status quo being reelected, and maybe a little dustup with Iran, which mr market is probably fine with. bush turned around a collapsing stock market with Iraq in 2003, but careful here, because gold diverged higher ahead of that event, and right now the gold stocks are falling, and that is a bearish indicator.

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