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Hump Day Hop Scotch

By

Hit 'em hard Minyans!

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"And I want the rest of you cowboys to know something, there's a new sheriff in town. And his name is Reggie Hammond. So Y'all be cool." -48 Hrs.

Good morning as we ready to zoom into the Boom Boom room. With yesterday's spirited sprint in the rear-view, all eyes are on Big Ben for future clues on the interest rate fuse. After eighteen (count 'em!) years of trying to read between the lines of Elmer's obtuse vernacular, popular perception believes that Mr. Bernanke will be a bit clearer in his message. That remains to be seen, of course, but the first chapter of our new novel will turn a fresh page this morning.

While retail sales is the obvious hindsight catalyst for the most recent rally, the likelihood exists that part of the move, or perhaps the sustainability of it, was predicated on the belief that law and upside order will be Sheriff Ben's mission in life. Remember, the Minx began her spirited sprint last autumn when word first leaked that Boom Boom was firing up his helicopter. It makes intuitive sense that similar jig would greet his first hints at policy. What is yet unknown, however, is whether Boo's late day musings will manifest as traders sell the news.

There is a very fine line between fighting the tape and using price to your advantage. That line is called "discipline" and its the facilitator of capital preservation and trading longevity. One of my consistent themes this young year has been the belief that volatility will uptick in Equityland and I nibbled anew late yesterday. That's not a directional bet, in and of itself, although the lion's share of yesterday adds were "underneaths." To wit, and because the clock is starting to tick a bit quicker, I posted this vibe on yesterday's Buzz:

That's like putting your whole mouth right in the dip. From now on, when you take a chip, just take one dip and end it!

In between meetings, markets and trying to identify the perfect Valentine's Day gift (other than myself), I've been doing a round of nibbles on some cheap vols. Maybe I'm wrong--it wouldn't be the first time--but I continue to feel that equity volatility will uptick in the months ahead. And I wanna proactively position myself with further gamma.

As we pride ourselves on forthright communication in the 'Ville, I'll humbly offer that IBM spring puts were among the accumulated positions. Is that an emotional double dip? Given that Big Blue couldn't take out yesterday's high (in the context of a stellar rally), I've got long side exposure against it (SunMicro) and we're still under the '06 trendlines, I figured it was worth the dabble.


And Finally, some off-the cuff Hump Day Vibes:

  • This Bird Flu is no joke as it has now spread to Germany. This hasn't gotten the type of press that, say, SARS got but I'm not sure if that's necessarily a good thing. Personally, I would rather hear chicken littles than see dead chickens.

  • All those Dick Cheney jokes were pretty funny when we thought (read: were told) that Harry Whittington was "in good spirits." After the heart attack, it's no longer appropriate to make light of the situation. Mea culpa.

  • Minyanville Publishing and the Ruby Peck Foundation for Children's Education are teaming up to help fight Canavan Disease. Our friends at Jacob's Cure are hosting their family bowling event on March 5th at Chelsea Piers and the critters will be there in force. If you have an interest in joining us at this fun event for a worthy cause, please let us know. We're a community that cares and we strive to help our own.

Good luck today.

R.P.

position in sunw, ibm

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.

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