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Freaky Friday Potpourri

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We've been talking about advantageous ways to use (decade low) volatilities to our advantage, including stock replacements and married puts.

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  • The Matador Crowd is standing proud all over the world, from stateside to China, Canada and Brazil. The common vibe? Read the last paragraph of this article as it sorta sums up the collective sentiment.

  • Our newest intern begins on Tuesday and consistent with long-held tradition, he'll be dutifully named upon arrival and asked to serenade the squad at the Wednesday staff meeting. Man, I can't wait for MVTV to launch so we can broadcast these shows to thy faithful.

  • If you're not reading the Buzz & Banter, you're missing the best content in Minyanville. There's a two week free trial (no credit card needed) so please feel free to give that goose a gander!

  • What am I watching into the end of the year? This, naturally. They're the six keys to the 12/31 vault.

  • The homies found some supply late yesterday. Keep your eyes peeled for similar snakes in the weeds today.

  • We've been talking about advantageous ways to use (decade low) volatilities to our advantage, including stock replacements and married puts. Those insights are starting to make their way around Wall Street this morning.

  • "Illinois Tool Works (ITW), Black & Decker (BDK), and YRC Worldwide (YRCW) all guiding lower says the economy is buckling. Zero CPI says there is no pricing power. 90% of all gains in the history of the stock market have come during times of disinflation, low inflation where there is pricing power for companies. Stocks have performed terribly during times of high inflation and deflation. The struggle continues. But risk is now super high for those not paying attention." John Succo on today's Buzz

  • Hey Minyans who are observing the festival of lights, Happy Chanukah!

  • Note the greenback creeping higher (DXY +40 bips). In a Hoover , that's a headwind for asset classes (including equities and metals).

  • Until the financials falter (BKX 115 is HUGE), the bovine will buy schvitzless dips.

  • Alotta ETF's went ex-dividend last night. So you know, if you care and in case you traffic.

  • Minyan Mailbags

    • Toddo,

      In all three of the past expirations the market went up substantially leading into expiration with little or no hangover the following Monday. The talk on CNBC yesterday was that the large futures purchase was a result of all writers needing to buy futures. Any idea when this forced buying will end? Thanks, Minyan P.

      MP,

      Yes, as we discussed on the Buzz, the $5 Billion buy program was a function of two metrics-technicals and structural. The former in that it was triggered by a fresh high in the S&P (buy stops) and structural in that there is an expiration "magnet" towards S&P 1425 (which we've been discussing for some time). As index options expire on the opening, those influences will abate and give way to single stocks and pin pressures.

    • Toddo,

      When talking about asset classes and the dollar, you offered that while anything can happen on any given day, you "firmly believe that they cannot both sustain the jig." I'll take that bet and see ya at higher levels dude! Minyan MT

      MMT

      Dude---that's awesome!!! But I would suggest some context before cutting a rug. First and foremost is time horizon. As we've seen since the back of the bubble, the "cost" of higher equity prices has been the give back in the dollar. Indeed, while the S&P is up 21% since the beginning of 2002, the dollar is down 30%. So there's that. And given the undeniable trend of debt dependency, I would argue that this dynamic is firmly entrenched for the foreseeable future. Good luck!

  • Have a great weekend, Minyans, and enjoy the Festivus for the rest of us!


R.P.

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Position in financials

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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