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Random Thoughts

By

Risk management, Minyans, and open eyes.

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  • Our emerging market proxies are squeezing higher this morning, with Brazil, TRF and EEM all higher by a deuce (2%). Breadth (3:1) is also supportive of an upside try, as is the action in the nets (Google) and a broad base of sector tells.

  • My buddy Harry the Cobbler advises me to watch the put/call, as it hasn't been this low in a long time. That is, for those who don't follow options, a technical negative.

  • The biggest fly in today's upside try? The downside reversal in crude, in my view, as I'm a believer in the monolithic asset class trade (vs. the dollar, which is also up).

  • I know someone who has previewed the first four episodes of 24 and he tells me that, on a scale of 1-10, the intensity is a 400. Dink, dink, dink, dink...

  • I'm watching (and enjoying) the mean reversion trade in the energy and metals (both +2%). It hasn't been the snazziest trade of late but I'm still there and I still care.

  • Along those lines, I noticed that Macke's Fast Money cohort, Eric Bolling, made a bet last night, offering that spot crude and gold will trump the BKX by year end. I couldn't agree more.

  • If those Intel January 22.5 calls are offered at 0.20 again in front of earnings, I might buy some Lotto tickets as a function of that upside gap. I don't have an edge on earnings but the group trades well and, well, it's twenty cents. Not advice, obviously, just thinking out loud.

  • "Conventional wisdom holds that the Dollar may weaken as our major trading partners raise rates making fixed income returns more attractive. Today, the surprised the market by raising short-term rates by 25 basis points bringing commentary that money will move away from the currency toward where rates are moving up. It is important to remember that the Trade Weighted U.S. Dollar moves with the REAL short-term interest rates relative to our trading partners. FTN's Chief Economists points out the real rates in the are higher than our trading partners (including Europe ) because inflation is trending higher overseas and lower here." Snoop Tony Dwyer of FTN Midwest Securities.

  • Risk management, Minyans, and open eyes. Trailing stops for those inclined still make a ton of sense.

  • This isn't the sorta thing you wanna cut corners on.

  • Using the Whole Fist there Doc?

    Why is the market up today? Are folks psyched about Dubya's
    plan? Is there anticipation of stronger than expected earnings in the pipe? Chatter that Bonds will go down?

    Maybe. Or perhaps it's entirely more structural.

    I just got hit with two tidbits of information. One, that there's a huge S&P 1400 put seller in the market (the buyer of those puts must buy the S&P to hedge). Two, we're picking up sizable short covering in a swatch of ETF's, including the XLE, RTH, EEM, SMH and QQQQ.

  • "When are you going to learn? Last time you disrespected the Gators, you lost our bet on the Final Four and National Championship. Do you have to learn another lesson? Here's the wager: $250 to Ruby Peck Foundation from me if OSU wins the National Championship. If the Gators win, you apologize on the site and vow to never disrespect the Gators again and you include one random thought per day for 10 straight trading days giving some praise of the University of Florida." Minyan Charlie Poe

    I'm Sorry! I vow never to disrespect the Gators again!


R.P.

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Position in energy, metals, financials
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