Freaky FUBAR Friday
How you play--and whether or not that thought is pertinent--is purely a function of your time horizon and risk profile.
"I looked up "fubar" in the German dictionary and there's no fubar in here."
--Corporal Upham, Saving Private Ryan
I hear ya Minyans, I didn't know what FUBAR was for a long time either. Odds are, however, that if you Google the term, you'd find that it's the confluence of earnings, expiration, anxiety and exhaustion. Yeah, welcome to the current day financial fray, where men are men, sheep are nervous and portfolio managers are freaking from underperformance.
While yesterday's fray was in like a lamb and out like a chop, the competition for mindshare has been astounding. Indeed, overall volatility has been muted but there is no shortage of individual movement or sector rotation. Google higher by a quick $30? Xilinx up a mere 8% after-hours? Sandisk off 6%? Previous sinners (energy and metals) and newfound winners (with the OSX and XAU up a symmetrical 3.55%)? This tape is not want for opportunities and it's not shallow on pain. And it's most certainly anything but boring.
A few thoughts have begun to crystallize in my crowded keppe. For one, the notion that a "top" (for lack of a better word) could arrive post-expiration and pre-midterm elections. That would fit the path of maximum frustration and flummox the most folks. I know we're not supposed to short charts we can't ski but given the low level of volatility, the risk/reward (cheap options) may indeed be setting up. How you play--and whether or not that thought is pertinent--is purely a function of your time horizon and risk profile. And, of course, this is one man's humble (and somewhat nonsensical) opinion.
The other (entirely different side of my mind) thought is that the dollar has thus far failed at both the 200-day and the five year downtrend line. That could and should help the commodity complex and the equities that track 'em. The action yesterday seemed to support that thought although, as we know, one day does not a market make. We offered a while back that we'll likely toggle between inflation (things we need) and deflation (things we want). That seems to be playing out under the guise of a Goldilocks economy.
So, how do these seemingly mutually exclusive views fit? It's a familiar theme for thy faithful and one that I've shared before. I own puts in a few financials (Goldman and JP Morgan, among them, with stops) and calls (or cheap common) in the metals (Golden Star among 'em). I sold my energy bets (where's my Weatherford!!?) earlier in the week and have been doing some soul searching as to whether to get back involved.
It ain't easy, Minyans, but it's not impossible either. We just gotta stick together and remember the important stuff. From there, fate will follow through and show us the way.
Toddo, I'm very bullish on Precious Metals. This death cross on GLD really bothers me, though. Thoughts? Faithful Minyan, Nick
Thanks for the faithfulness! Professor
Hope you're well,
And another one...
I am one of the original citizens of Minyanville (I got a certificate to proof it!). I read you sold your energy bets. Crude has not made its initial bounce but it does look to be very soon judging from the charts I'm watching.
As an aside, I once emailed you and told you I thought you were the Barry Bonds of trading. Sorry for that. Perhaps Albert Pujols would be a better fit. Thanks again for your site. I missed your writings after you left thestreet.com.
I see what you're looking at and it should be noted that the energy bet I recently made (and took) was a pure trading try. That's different than the long-term holdings I once held and punted when commodities broke their five year trendline (CRB 330). XLE Fitty ($50) is the level of lore for energy galore. See it, cookie, and good luck.
And another one...
"Minyan Doug Kass just connected with us to say that there are monster rumblings beneath the belly of the beast. Dougie is hearing (not confirmed) that Bank of America (BAC) may offer mortgages without points for their big checking account customers (sorta what they're doing in the online broker space). This, of course, would pose (further) problems for the WaMu's and Countrywide Financials (CFC) of the world." Buzz & Banter, October 19, 2006.
Dude, this is not exactly a scoop! BAC ran full page advertisements in several newspapers recently offering the mortgages. I either had a very vivid dream of it or I saw it in the Seattle Times. Not only that, the company offers to lower the rate (once a year as I recall) and all you have to do is walk into the branch and ask--without charge--if rates go down. Rather brilliant I thought but too good to be true it seemed. What's the catch? Minyan Bob
Thanks for the eyes--it was news to me and, as such, I shared it with ye faithful. Yes, it does seem too good to be true but, as are most things, it likely won't be. The catch--or, those caught--will likely be the consumer. And thanks to the bankruptcy laws that are now in place, they'll likely be the ones holding the bag. Not BankAmerica. Not with the corporatocracy that seems to be prevalent throughout our great nation.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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