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Freaky Friday Potpourri


IF this is the beginning of smart money distribution, the conditioned complacency will serve as an "off-sides" ursine catalyst.


A few Minyans have asked yesterday whether the Ecuador situation "matters" (risk spreads are jamming higher on chatter that they're gonna default on their debt).

Ecuador? Agador? Spartacus?

I don't know, is the honest answer, but awareness is prudent. I remember when Russia "didn't matter" and Rubble chatter was pure rubbish. And then it mattered. In a big, bad way.

That was the late nineties and I would offer that the interdependency of the financial markets are much higher now--and entirely more correlated--than they were then. Remember, the $370 trillion worth of derivatives isn't an evil element. They only "kick in" when a spec of dust contaminates the intricate mechanism.

Can't happen? Yeah, hit me again John Meriwether--and this time put some stank on it!

Random thoughts

  • I saw my good friend David Slaine last night. Slaino, who ran Morgan Stanley's OTC desk back in the day, is one of the best pure traders out there. He's a flow guy and tape watcher, who taught me that you can learn a lot just by observing. Stocks (sectors) that open flat (down) in an up tape (and vice versa) offer valuable clues regarding the underlying supply and demand. And sometimes, it's possible to think too much (about the macro crosscurrents) while trading.

  • "Toddo--there are 21 new IPO's coming to market next week that will raise $3.2 billion." Minyan Sal from Cantor.

  • That's alotta supply although I would offer that it might matter more if it wasn't an expiration week.

  • The Rolling Bones tore the roof down last night as Minyans cut a collective rug. Nice work Charlie, particularly breaking out the Boss's "Santa Claus is coming to town."

  • Is anyone else very excited for MVTV?

  • Is Jack Bauer still on a slow boat to China?

  • IF we're near some sorta top, you can be sure that the LBO chatter (Deere, Home Depot) and Abby Joe's sudden face time will seem obvious in hindsight. And no, that's not meant as a dig.

  • Has anyone ever seen Grey's Anatomy and Groundhog Day in the same room at the same time?

  • Do you see the technical importance of XAU 150ish?

  • Shouldn't Pfizer be rallying with all this performance anxiety?

  • Has Goldman become the most important stock in the marketplace? It's the "first mover," typically, and the Minx tends to follow.

  • Will you be watching High Net Worth Sunday (CNBC) for coverage of the CCA?

Minyan Mailbags

  • Toddo,

    Today you sited a major S&P put buyer and yesterday a large S&P seller. Is this the beginning of smart money distribution?

    Lastly, can you comment on the lack of follow through to the downside in contrast to the upside we see when there is a large S&P buyer.

    Thanks for the 'Ville,
    Minyan Pete

    Minyan Pete (and Repeat),

    Yes, today was the first meaty put buyer we've seen in some time. My sense is that it was a hedger who woke up to the fact that December expiration will leave him two weeks shy of necessary year-end protection.

    I think it's a smart move, particularly against long exposure and with the mindset that you always want your hedge to lose money.

    With regard to the lack of follow-through, there are two ways to look at that. Hoofy would offer that it's the sign of a strong tape and he'd be unequivocally correct. Boo will question why the tape is strong and where the buy programs (and +1000 TICK readings) are coming from.

    Two separate conversations, of course, but I digress. The simple answer to your question is that IF this is the beginning of smart money distribution, the conditioned complacency will serve as an "off-sides" ursine catalyst.

  • Hey Toddo,

    My business is very old school-retail and transaction based. I find it very interesting that I can't get anyone to consider taking even partial profits. Nobody wants to add to their tax bill this late in the year. Makes me wonder where we might be at year-end. Anecdotal, of course, but potentially telling of current retail mentality?

    Minyan Dave


    Not really a shocker given how long it's been since the dips weren't bought. Conditioned complacency abounds (which doesn't mean that they can't trade higher). I would also note that expiration is early this month (the first was a Friday) so the last two weeks of the year won't have "traditional" December protection.

    I've always operated with the hope that my 'first sale is my worst sale.' Getting a little something off-or trail partial exposure with stops-is a good "in between" way to operate into an uncertain period.
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