Fare ye well!
- A profile on program trading?
- Mr. Sullivan, I presume?
- The Miami Heat have upgraded nicely. The Pistons are a tough bunch. Detroit will be a force. And the West is run 'n' gun and lotsa fun. Get ready for NBA '06 style, Minyans, as this is gonna be a rockin' season!
- The homies are a house of pain once more (-4% from yesterday's highs after running into the resistance patch).
- Exxon Mobil (XOM) is back below the magical tragical $58 level.
- NYSE breadth is 2:1 negative, the brokers just flipped the Red Dye switch, the energy patch needs a red bull, the trannies are givin' back some nub and, overall, the action is consistent with my morning vibe that we'll see some profit-taking today. With that said, I still sense that if (big if) this is a pause rather than a turn, the semis will lead the upside speed for the four-letter freaks (if and when). Not because they're "good," but because they're hedge fund pawns.
- If you were one of the kind souls who contributed to the RP Foundation September Hurricane Relief effort and would like to take advantage of Fari Hamzei's generous offer for a gratis (as in totally FREE) trial of his trading tools, please ping the Queen today!
- Mini-Minyan Scotto Mailbag
"Please tell me what you think about this article on the dollar. Thanks, Minyan Neal."
Neal- I remain intermediate term bullish the USD, a stance unchanged from November of last year. It has some more room to run in my view notwithstanding the very real possibility of a few months of choppy decline that finds support and pivots up (if that doesn't happen immediately).
"It hardly needs mentioning that the outlook for gold and silver, if the dollar breaks down from here as expected, is very rosy indeed." says the article you attached. This is nonsense, a point that I simply cannot make enough. Yes there is a strong negative correlation from 2003 to present (-71%) but from 1986 to 1996 there was a -14% correlation and from 1995 to 2000 a -27% correlation.
How will we know when the currently strong correlation will revert back to the old non-correlation? We can't and won't. Which is why it is massively dangerous to make a gold call based on the dollar call. Read "The Golden Constant" by Roy W. Jastram and you will come away with a profound appreciation for just how gold "acts" during inflations and deflations. It's not how you think.
- Sticky situation!
- Watch the dollar, cookie, as it's now above our aforementioned resistance. This is a pretty big breakout and, not surprisingly, the metals have been waxed in kind. Could this be the beginning of the washout that the Savvy Seer of Sautville vibed? Sure, it very well might be (it meshes with some other annecdotal evidence shared on yesterday's Buzz). Still, and while I respect the potential for some meat to this smelting, I've got some core exposure and will look to scale into more as a function of price (rather than "sell to buy back."). How you approach this juncture is a function of your particular approach (and time horizon) but that's how I'm choosing to view the dew.
- Pirate trading.
- "Trend indications actually improved with the recent move of the SPX through 1209. That leaves 3 of 5 positive, officially no change from the previous reading, but incrementally neutral with a positive bias. When we examine the equity line on our various trading systems, trend has (for the second year in a row), not been the call, it's really been momentum. At this point momentum is positive and still reflective of a long bias. There are, however, points when momentum and volume spike and indicate a potential momentum climax. This is one of the few indications we have to alert us to potential trend reversals without distribution. The NASDAQ registered one of those days yesterday with volume and price deviations. We are less inclined to believe this indication here because price measures are looking volatile compared to past price volatility." -- Lehman scribe Jeff DeGraaf.
- "If anyone wants a frontline view of the real estate market today I would encourage them to listen to ZipRealty's (ZIPR) conference call last night. They operate in most major metropolitan ares in the US. They guided down numbers and are seeing a shift from a seller's market to a buyer's market. This is reality, not a bunch of economists. Minyan Alex"
- Succo and I will be hosting a town hall meeting at Northern Kentucky University (near Cinci) on Monday. Ye faithful are welcome and should ping Matty Matt with any questions. And, as you might surmise, I'll be outa the 'Ville on Monday and building bridges to the next generation Minyanship.
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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