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Random Thoughts

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All this work to get to resistance?

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  • While last week's Minx had more swings than a Hedonism vacation, this week's freak has thus far featured motion over movement. Not a shocker given the jockeying between asset classes, the (formerly) oversold condition and the looming overhead support (S&P 1275, NDX 1705).

  • I remain of the view that volatility (VXO), after spiking 25% last week and coughing back half of that move this week, has plenty of room to run as we edge deeper into '06.

  • I opined yesterday that, while I've got alotta gamma, I wanted to see a lift to resistance (1275/1705) to peel out of some calls. When we giggled higher out of this morning's gate, in the interest of full disclosure, I layered out of some upside exposure (including my Yahoo!). Just tradin' as I made 'em to take 'em.

  • The piggies are sizzlin' as the BKX and XBD both opened a percent higher. I've been buying back some out-month puts in this complex (after dumpin' a bunch into Friday's meltage) but the "steepening" yield curve seems to be embolden psychology. BKX 103 was resistance #1 and they sliced through that like Lebron through a Knick defense. Through objective eyes, this is positive action although I'm inclined to take a deep breath and count to a hundred (backwards by prime numbers). Citi $48 and JPM $39.5ish are directly overhead and should pose problems.

  • Finally, an inside-out roadmap to women!

  • If you missed Professor Succo's walk through January expiration--and the inherent lessons imbedded in the price action--please print it out to read at your leisure. It's an instant classic.

  • CDMA? Have you ever seen what this stuff does to kids?!? Given the incessant call buying I've witnessed in Qualcomm (QCOM), my sense is that last night's earnings weren't enough. With that said, Boo is very conscious that the stock has been basing above acne at $46. That's the level to watch if you're involved. (Buzz 9:44)

  • Not a shocker, I know, but the real story has only just begun.

  • President Bush said this morning that there's "no doubt in his mind" that wire taps are legal. How would he feel if we already knew that?

  • "The pickup in volume and minimal price movement led to a day of churn on the SPX. The deterioration in our p/c indicator has raised our defense condition, but another indication has recently rolled-over as well, our momentum triad. This measures 10-day breadth, volume flows and external price action. When these three simultaneously contract out of an overbought condition, the market often comes under additional pressure until it reaches an oversold state. The indicator is far from perfect, but effective nonetheless. When combining this separate indication with our p/c data, we believe the market is likely to experience a deeper oversold condition in February before resuming the (at this point) positive uptrend." Lehman's talented (and aptly named) technician Jeff DeGraaf

  • Juniper Networks (JNPR) is taking a 20% haircut today.

  • SunMicro (SUNW) has enjoyed a 5% rally from yesterday's post-earning's opening. It's still "doing work" around $4.50 and remains tucked away for a rainy day.

  • Professor Succo and I will be hosting a town hall chat at UPENN today at 4:30. If you would like to swing by for some hugs and handshakes, feel free. This is the grist of the 'Ville.

  • Eat your heart out Neal! Professor Sedacca scribed some fine vibes this morning.

  • There are a ton of positive developments unfolding behind the Minyan scenes. We'll share as soon as we can but know that we're working hard to make ye faithful proud.

  • Hit 'em hard, Minyans, and have a fantastic afternoon.


R.P.

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Position in SUNW, JPM
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