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Random Thoughts

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I saw an "M" in my left eye and a "V" in my right.

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  • Et Tu, XAU? The metal proxy is through initial resistance at XAU 130 and, while the fitty-day is slightly higher, the real 'next test' rests at XAU 140 (previous bottoms, 200-day.

  • A near-term top (before the midterm elections) still wouldn't shock me and I wanna be long volatility (gamma) as I walk that line. Some of the smarter (non-volatility) players I speak with are setting up the same.

  • If you're not reading Pepe Depew's Five Things each day, you're missing some of the best content on the street. Not Wall Street. The street.

  • Minyan Peter writes "Toddo, If the pine tar is related to his ERA, how do you explain innings 2 through 8? The Yankees got beat like a rented mule. It's over. Time to focus on the race with the Lions for the first draft pick." Touche, Mon Frere.

  • I glanced quickly at a mirror yesterday and could swear that I saw an "M" in my left eye and a "V" in my right. Weird.

  • A quick sniff around the horn finds NYSE internals flat (9:5 negative on the Nazz), energy and metals jiggy (hey, it's counter-trend Tuesday!), the dollar pretty in pink, the homies rolling higher (HGX +90 bips) and yours truly busier than a cat juggler.

  • Speaking of metal issues, Phelps Dodge hangs tough, all things considered. If the "reaction to news" is more important than the news itself, that should help embolden the metal heads. (Please remember that this stock, now $98, was $76 earlier this month).

  • I was once told that I was a bad lover. I asked her how she could tell in thirty seconds?

  • Ladies, gentlemen and children of all ages should enjoy the tightrope performance by the FOMC tomorrow. They'll stand pat, fer sure, but their language will have to be chosen carefully.

  • "Our friends at Thomson Financial ran some numbers for us and as of last Friday, 151 of the S&P 500 (SPX) have reported EPS (30%): 74% of the S&P 500 (SPX) that have reported so far have beat expectations. This compares to a historical average (since 1994) of 60%. 10% of the (SPX) that have reported so far have fallen short of expectations. This compares to a historical average (since 1994) of 20%. Thus far, the average upside surprise was 5%, which compares to a historical average of 3.2%. Info Tech has surpassed estimates by the widest margin. While it is still relatively early in the reported earnings season, if you combine those companies that have already reported with those that have yet to announce, the blended growth rate for SPX operating EPS in Q306 is expected to be 15.9%. This compares to expected growth of 15.3% at the beginning of the quarter and 13.9% just a week ago. We should have a much better feel for EPS at the end of October because 60% of the SPX will have already reported results – but so far so good!" Snoop Tony Dwyer of FTN Midwest Securities.

  • Snoop Tone is a pretty sharp cookie--and someone who has nailed this recent lift. I would offer, however--humbly and sans acrimony--that value traps and margin contraction are potentially the fatal flaws of a pure fundamental approach...

  • Hey, The Following Buzz took place between 10:00 AM and 11:00 AM:

    Action speaks louder than words and I'm a man with great experience...

    I hear ya Chris Robinson, there's nothing quite like the benefit of experience. The experience to feel, the experience to see, the experience to know. Unfortunately, as the only things in life that age are our skins and souls, we're also left to rely on instint and discipline as we find our way through the minxy fray.

    I had my finger on the trigger of my Goldman puts, ready to blow them out like birthday candles. I bought these last week, set my stop and, as I know all too well, discipline trumps conviction. Then I paused and thought (in no particular order): A) Man, this vol is really cheap, B) I can't shake the sense that, with expiration behind us and the midterms in front, we could certainly see a near-term top and C) I've got other longs to lean on should the market rally.

    So, as I write--and as I pride myself on being forthright with ye faithful, I'm still the proud owner of those aforementioned puts. Time will tell if emotion clouded my judgment but that, as with most things in the 'Ville, will be found out together.

    As always, I hope this finds you well.


R.P.

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Position in GS, metals

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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