Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Was That A Short-Term Low?


Alright, so let's see...

I spent most of yesterday--and the better part of this morning, starting at 4:00 AM--fielding phone calls and emails from concerned friends and family as the point of recognition arrived like a clap of thunder. Evidently, some high profile pundits were screaming from the rooftops that the end was near and everyone--regardless of risk profile or time horizon--should immediately sell everything.

Minyans know that we've been monitoring the cumulative imbalances for years--they know we take pride in our name and our word --they know that, above all else, we care.

As discussed yesterday in real-time on the Buzz--and summarized in this morning's missive--I'm hanging with Hoofy for a trade. I've done this twice during our steadfastly bearish stance since last October--into the Bear Stearns abyss on March 17th and again on July 16th into the heat of the summer meat--and I will again draw the distinction between picking a bottom and picking spots.

I continue to believe that we're in for a long hard road, a prolonged period of socioeconomic malaise. As a trader, however, I'm less concerned with the ultimate destination than I am the path that we take to get there. My sense--and this is one man's humble opinion--is that the palpable fear will trigger a lift at the expense of the dollar as the other side of our wishbone world gains mindshare.

As I sit here and scribble my dribble, the pre-market futures are selling off in response to the lack of action by the Federal Reserve (everyone, including yours truly, is anticipating a coordinated global rate cut. Australia sliced a full percentage point overnight and I've heard chatter that the rest of the world would do the same). 

Instead, and keep in mind that this is real-time stuff, the Fed will purchase commercial paper through a new special unit (don't you love that they can change the rules in the middle of the game?) and the U.S. Treasury will make a deposit with the Fed to fund the unit.

I'll be honest, I was looking forward to a weak opening to add back some exposure (I know, be careful for what you wish). Having put two legs in my bull costume yesterday (50% conviction on the long side), I removed one leg (25%) into the 55 handle rally off the lows (20 handles above my cost basis). Discipline over conviction, as we like to say.

With that said, I enter today's fray with some QLD (double secret QQQQ), Transocean (RIG), Weatherford (WFT) and yes, my core, small Yahoo (YHOO) calls (help me, I'm drowning) and I'll trade 'em with trailing stops and hat in hand. The drillers, so you know, remain my preferred space for rental exposure.

But this isn't about "me," it's about us, and in that vein I'll share the following.

One of the smartest folks I know said to me this morning "A sharp rally is the last thing we want to see--it'll suck in the masses and set them up for a really big fall." Perhaps, but as I said to him, "I learned a long time ago never to let an opinion get in the way of making money."

There's a lot of trading left in the session, Minyans, so take a deep breath and let's enter the session with positive thoughts. Profitability, as we know, begins within.

R.P.