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Random Thoughts


It's for the kids!

  • The all-star guitar auction kicked off last night as our community makes our strongest effort yet to give something back. While a bidding frenzy greeted the 5:00 kick-off, the dust has settled somewhat and "wbmarcusataol" is currently atop the leader board ($13,001). The philanthropic push will continue through next Friday afternoon and, with continued press like this, we hope to really make a splash!

  • Attention! Deficit Disorder!

  • HGX 510 is a pretty important technical inflection point. Sammy says that earnings don't matter--it's the reaction to them that dictates the fate of the tape. Toll Brothers (TOL) and Hovnanian (HOV) are tells in that regard. We broke this morning, snapped back and, well--here we are.

  • Billy!

  • The SuccoShobinfest was a thriller. We discussed an emerging economic thesis that has started to crystallize in my crowded keppe. The good news is that neither John nor Steve shot it down--which, as I massively respect them both, is a window to further fleshing. I'll try to do it justice with a strong column before year-end.

  • Mr. Shobin remains constructive on the market. "Why?" we asked? "The trend," he replied, "it's still your friend."

  • From a pure trading standpoint, I enter the Thursday fray with two legs in my metaphorical bear costume (50% conviction on the short side) and my stop remains above S&P 1275. If we get further slippage (S&P 1245 support?), I'll likely peel some fur off.

  • The devil made me do it!

  • "If we could have scripted Wednesday's response to Tuesday's price action, it would have been an eerie reality TV concept. Essentially, price action was weak, but non-committal, as volume again was indistinguishable from day to day. Financials did, however, drag down the S&P performance, and are essentially doing their best to tarnish the luster they've created off the October lows." -- Lehman technician Jeff DeGraaf

  • THE tell the last two sessions? The financials. BKX 102 remains support, XBD 200 is still resistance.

  • Minyan Steve, fresh fvom Sveden, was discussing the guitar auction at dinner last night. "Some feel that, because it was signed to Minyanville, it might not fetch as much as it otherwise might" I offered. "No man," he shot back, "the fact that it's signed to Minyanville--in its infancy--will add massive value to this item in the years ahead." I like the way he thinks.

  • This was a late day string on yesterday's Buzz that warrants a second look:

    Consumer Credit
    Scott Reamer (3:36)

    As reported here a bit ago, consumer credit for October came in at ($7.2 bln), the largest decline in the data series going back to 1943. See the chart here.

    I believe this is going to be a big news item in the coming days. Similar to Greenspan's use of the word "conundrum," It's going to attract a lot of attention. The reason it is important is that it may be an important stat for the end of the credit boom.

    Recall the three axes of reflation: the fed & commercial banks supply credit (print money) and consumers/corporations provide demand for credit. A consumer 'repudiation' of credit means repudiation of means to pay for consumer goods since wages/salaries are so lagging, which means the linchpin of the global system may be coming unglued as the US consumer is the keystone to the demand side. This bears watching closely and fits in well with the decreasing liquidity (Money AMS) figures we have been watching decline rapidly for the last several quarters.

    Hocus Focus!
    Todd Harrison (3:42)

    I've been pinging back and forth with Scotto regarding his Buzz and I think it's something Minyans should focus on. If, in fact, this "notion" starts to gain traction in the mainstream media (in coming days or weeks), the "catalyst" for lower metals will be obvious (with the benefit of hindsight).

    You know I love the precious ones for the long haul but, as per my column this morning, I think a retest is in the cards. And, if that mindset manifests, the implications for equities are equally ominous. I'm not sounding the Red Dye sirens--I simply want ye faithful to "see" this side of the trade. From there, we must all make our own decisions.

    Consumer Credit and Bonds
    Bennet Sedacca (3:43)

    I totally agree with Scott and also believe that barring a dollar crisis, the data will be a bullish prop for bonds, particularly with bonds so poorly thought of at present. If this becomes a trend, and housing softens simultaneously (very interested to hear from Toll Brothers (TOL) tomorrow night), the bond bears may have to rethink their position.

    Keep close tabs on the semis on the heels of Texas Instrument's mid-quarter. I was underwhelmed with the report (given the extended field position) and, after trading 2% higher this morning, it's now off 2%.

  • I spoke to Dorothy last night and she sounded fantastic. She asked me to thank the kind Minyans for the white light and kind vibes.

  • :-)

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