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Random Thoughts


This is my kinda slither!

  • Hey Winnie, wanna hear a joke?

  • Bored? Tired? Feeling a bit "on edge?" Fear not, Minyans, tomorrow's tussle will feature some FOMC flava, an update from Dubya, observations from OPEC and earnings from Google, Altria and Merck. This, of course, occurs in the context of technical affirmation (above S&P 1275, NDX 1705) and ever-present compression (which presents a disconnect between perception and reality). Fun, eh?

  • What has this meant in the past? Glad you asked. These vibes were shared courtesy of Professor Jason Roney on today's Buzz:

      • GOOG reports earnings on Tuesday. Since coming public, the company has 5 quarters of previously reported earnings. The Nasdaq futures opened higher on the day of GOOG's release every time by an average of nearly +.5% and closed higher 4 of those 5. We'll also note the SP futures have a strong bias to opening higher on the day of the FOMC release.
      • The last day of January has a positive bias with the SP500 closing higher 70% of the time over the last 30 years by an average +.47%.
      • Longer-term, the first day of February has only a moderately positive bias (last 30 years just 56% higher first day and 53% higher first three days). Over the last 10 years, however, the SP500 closed higher 8 of 10.
      • The State of Union address is also this week but we could find no statistical bias to the markets.

  • If you haven't read the new weekly feature from Professor Goepfert, get involved!

  • Actual Instant Message exchange this morning:
    Interested Minyan: Weird, eh? Unemployment low, GDP bad, no savings, weakening housing and tape doesn't care yet.
    Toddo: Hoofy would say that's all you need to know.

  • Old School Minyans know that I've been on the "silver is a teen in waiting" wagon for a few years now. Further, as discussed in Ojai, I've been consistent in my belief that energy and metals will jockey the leadership baton for years to come. I still believe that to be the case but, in the interest of full disclosure, I want to share some recent actions. I've unwound the lion's share of my silver equity holdings into this latest push higher. I sense that $10 will provide some resistance for white lightning and wanna watch how they trade in and around this zone. The risk, of course, is that premature evacuation won't allow for a lower re-entry point but that's a risk I'm willing to take. I can always buy 'em back higher, if need be, or look for the next best trade.

  • I've heard of "no sleep till Brooklyn" but this is nuts.

  • "Overall our trend work remains positive with 1245 representing important support for the S&P. Our momentum work has rolled over and the balance of our sentiment work suggests a market environment with limited upside. Technology's strength, while seasonally anomalous, remains endorsable given the weightings and sentiment in the space. The consensus call from our seat is for a short-cycle doomed to fail, much like the last cycle. That may prove to be true, but given the attitude and momentum imbedded in the charts, the risk to investors doesn't appear to be a short cycle, but something with more duration." Lehman strategist Jeff DeGraaf

  • Mini-Minyan Mailbag.

    Coach Toddo,

    After assimilating all the data available to me, I think we're near an important inflection point and I'm as beared up as can be. I believe the DJIA has seen the high for the year and that there's a decent chance the Dow will drop to 10,400 in the next few weeks. I want to capture this move by shorting DIA with a stop at this year's closing high of 11,043. I plan to use an amount of capital that suits my risk profile. I'd like to initiate this position today as I feel that given the Dow's lofty field position, the Fed's 14th consecutive rate hike will be a sell the news affair. I'd appreciate any fine tuning you can provide to improve the mechanics of my swing, and I won't take it as advice. Thank you, Minyan Dennis.


    While I can't offer "specific advice" on a trade (that's not what we do), I'll offer the following observations:

      • If you're disciplined, you can try anything. It sounds like you are as you've mapped out risk definition.
      • "Tracking risk" is often the culprit of the "right inclination, wrong execution" syndrome. Make sure your chosen vehicle effectively mimics your thought process.
      • Be wary of setting your stop at "obvious" levels. With 8000 hedge funds staring at the same charts, the technical landscape is crowded.
      • And good luck, Mon Frere, and may the Shwartz be with you!

  • We opined in this morning's opener that today could feature more posturing than positioning (ahead of tomorrow's nuttiness). That seems to be unfolding as traders shake the Mondays and the critters refine their risk profiles. I've been doing some house cleaning as well, cleaning up my sheets and "localizing" my risk as we ready for the steady catalyst flow.

  • Fare ye well, Minyans, and I'll see you on the Buzz.

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