Still Perplexed by the Weakness in Exchanges: CME Group (CME) Intercontinental Exchange (ICE)

Both CME Group (CME) and Intercontinental Exchange (ICE) had the typical knee jerk reaction yesterday but strangely zero follow through today.

I have written about the sustained weakness in these names, as you can read here. Even this helicopter drop of money has not really budged them. Very strange.

As an aside, I am anecdotally reading unbridled enthusiasm of bulls everywhere from message boards to investment sites. Hence, this leads me to stick to my theory that once the market has sucked these players in to believing nirvana has arrived, another swift boot to the rear should ensue.

Yes some more deals will now get done - yes people's credit cards will now fall from 14.88% rate to 14.38% rate (maybe, these card companies don't pass everything along) and some people on the fringe with variable mortgages might be able to refinance if they are not upside down. But it doesn't eliminate all the other issues and does it really make banks trust what each other hold? Nope. The only healer for those issues are time and price. So while making the portfolio more long, I still remain cautious intellectually - and this unbridled and unrestrained call to arms by the bull camp makes the contrarian in me take notice. I still have this feeling in a few weeks, we are going to look over and who is laying next to us in bed, and wonder 'what did we just do'. ;) The strong sectors should continue strong, but those sectors that ramped the highest here in the past half day might just get a reality check, as most of their rocket fuel will be short selling and not a flood of new buyers.

Long CME Group, Intercontinental Exchange in fund; no personal positions