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Random Thoughts

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It's raining Naz and dogs out there

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  • You be screwed!

  • "As one of the key tells supporting the equity market (and its valuations) has been the optimistic tone of the corporate bond market, this issue should be at the top of the everyone's metric assimilation at this juncture. If the ability of companies (through share buybacks and strategic M&A) and other financial sponsors such as private equity funds (through LBO's and other levered recapitalizations) to engage in shareholder-friendly actions is declining and risk-aversion is increasing (please see John Hussman's commentary with respect to rising risk-aversion), then broad equity valuations have a fresh new risk to consider. As this type of lending often slows first to small and mid-cap entities, one has to wonder why the R2K and S&P Mid-Cap have been leaders in this recent leg down? Well, at least that is what I would consider." -- Minyan JB

  • Fari is expecting the Larry Williams chat to be fully booked by the time it arrives and has asked me to give Minyans the early wink on signing up.

  • Ran into the devil babe, he loaned me twenty bills. Spent the night in Utah in a cave up in the hills...

  • The energy patch is taking it on the chin (-2%) despite a firmer crude complex. Despite my post-Katrina vibes that $70ish was the '05 high in crude, I still wanna trade this group (and the metals, which are also taking a breather) from the long side on dips.

  • Amare. Uh oh. Amare. Uh oh oh oh...

  • Keep an eye on Apple (AAPL) as a tech tell. If it can shake its pits, Boo will have fits.

  • This is the second "real" dip since S&P 1240 and folks are still conditioned to buy pullbacks. It may once again work but there will come a time when the bail will fail to be posted.

  • Blimey? Bloomies!

  • "Watch the 3640 level for the Dow Transports. A move below 3640 would violate the recent trend line from the Sep. lows. As mentioned last week, the bulk of the positive movement in the Transports has been coming from rail transportation companies." Pepe Depew on today's Buzz

  • Anyone have an interest in playing some flag football before watching the action at the October 23rd Minyanfest? Let us know.

  • Waves and Tides (Buzz 10:53)

    The Minx slinks through the morning muck as the bovine wonder what the...heck. Market internals shoulda stayed in bed this morning as they opened bad, got worse and are now somewhere between nosty and fugly (almost 3:1 negative).

    A kind Minyan just asked if my "gut feel" was that we would take out the recent lows in the SPY today. I answered "yes" but offered that we could see Snapper after those stops are triggered. Edgeful thinking? Nah, just a sixth sense that I wanted to share.

    The wildcard? Yup, its those frisky financials. If the piggies lose their bid and begin to slide anew, all bets are off for Terrapin Station. And, of course, if the breadth doesn't find some Dentyne fast, the probability of sustained stickiness decreases in kind.

    Define your risk, cookie, as it'll keep emotion out of the mix.

  • Peanut Butter Jelly time!

  • We're hearing that there are some meaty losses floating around involving Delphi (DPH) credit default swaps. Not confirmed as of yet but it certainly wouldn't shock the schvitz out of us. The question, again, is simply one of containment vs. contagion.

  • "Historically, seeing such lopsided breadth AFTER the broader market has already declined has been a tipoff that it was a blowoff. Looking over the past 40 years, and testing for any 5/1 negative breadth day after the S&P had already sold off at least 3% over the prior 7 days, 10 days later the S&P was positive 66% of the time by an average of +1.1%. The average maximum drawdown was -3.8% while the average maximum gain was +4.8%. I want to emphasize that those are averages, however, and wouldn't have helped a lot in 1987 or 1973, for example. But the last five times it has happened, going back to 1990, were all positive by an avg of +4.3% with minimal drawdown (I know that was primarily during a bull market)." -- Jason Goepfert (in response to my query).

  • We've got some exciting vibes in the Minyanville pipe. None of them would be possible without you, my friend, so please lemme take a moment to express my sincere gratitude. A dream is only as powerful as those who believe in it and we remain in the early innings of a very exciting journey.

  • For those observing the Yom Kippur, I wish you a meaningful fast.


    R.P.
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