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Hump Day Hop Scotch


Thanks for the love!


First and foremost...

As today is Ruby's Birthday, I wanted to begin our spin by passing along heartfelt appreciation for the incredible flash of white light that Dorothy received from ye faithful yesterday. After a very long day in the hospital and several procedures to remove a cancerous tumor from her breast, she is stable and resting peacefully. The doctors are "optimistic" and so are we. After all, if Ruby was famous for any single mantra, it was to "think positive."

In a twist of fate that can't qualify as a coincidence, we will begin the highly anticipated all-star guitar auction this evening. This one-of-a-kind collector's item, signed by Warren Buffett, George Soros, Peter Lynch, Jim Rogers, Bill Gross, Jim Grant, Paul Tudor Jones and many others, was presented to Minyanville to benefit the Ruby Peck Foundation for Children's Education. That begins at 5:00 EST, just about the time that Minyan Stephen Haughey arrives from Sweden to attend Succofest and collect the gold coin he won to benefit Katrina relief. Again, there are no such things as coincidences.

Anatomy of a bottleneck...

Yesterday, on the Buzz & Banter, we chewed through a real-time evolution of a bovine bottleneck. We all saw the circle smirk that surrounded Matador City when the day began. Most everyone was bullish, S&P 1270 was destined to be dust in the wind and our tea leaves giggled green to start the session.

We first noted a fly at 10:18, when we brokers got all-of-a-sudden heavy. At 10:32, we noted the mad rush of buyers trying to trigger the acne and openly wondered if Turnaround Tuesday would live up to its reputation. More red flags emerged at 11:11, when spates of spook littered the landscape and the broken brokers dipped into Red Dye. After a lunch munch at overhead supply, we began looking for yellow flags as players seemed offsides. And finally, as sober reality set in, traders sat in traffic as they tried to exit S&P 1270 at the same time.

I don't recount the process for purposes of pleasure. We're big believers that we learn more from our mistakes than we do from our victories, small solace in a profit driven world but inevitable perspective we attempt to absorb. My sense is that traders are still trapped and, dare I say, hoping that the year-end rally materializes. And it might--the next attempt at the S&P 1270-75 level will likely have more mojo. But just as I was ready to pull the ripcord on my metaphorical fur if my defined risk stop was elected (it wasn't), active Minyans should have similarly set parameters on their active risk. It serves two very important purposes: removing emotion from the mix and staying true to our long-held belief that discipline must always trump conviction.

Odds and Ends...

  • Crude is up for the sixth straight day as fa-reezing weather is sparking fresh chatter of supply constraints. Heating oil should also remain a focus as the recent rally is vulnerable to unforeseen concerns. Watch retail in that regard, lest Santa gets run over by a reindeer.
  • The metals remains firmer than a college cheerleader and haven't looked back since Gold pushed through $500 and silver sparkled above $8.50. Holiday shopping? Perhaps, but it wasn't me! Either way, and while I wanna keep some core metal exposure for the long haul, I would think we retest the acne at a point.
  • Other levels to watch? SOX 485 (retest and gap fillage), BKX 103.5 (recent low and first step towards 102), INDU 10,800 (air pocket to 10,700 below) and Toddo 200 (as the holiday parties begin to stack.
  • The critters would like to give a shout out to one of their own, a nine-year old yellow lab named Crash, who is under the knife today to remove a cancerous tumor from his liver. There are alotta folks in Knoxville rootin' for ol' yella and now there are Minyans around the world doing the same.

Good luck today.


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