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Stranger Than Fiction

By

Stay lucid Minyans--emotion is the enemy when trading--and don't rationalize your risk.

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Well the music's thunderin', restless and hot
You keep firin' me glances across the room
And I can't stop wonderin' just what you got
Get the feeling I'm going to find out real soon


(Grateful Dead)


Mama said there would be days like this and Mama was bound to be right. With Shanghai getting thwacked for 9%, durable goods falling off a cliff (-7.8% vs. exp.-3%), Iran heating up, sub-primes falling down and technical levels falling like leaves from a tree, Boo is licking his chops for the first time in a mighty long time.

A few points of Parliamentary procedure...

  • If the sharpest corrections occur in the context of a bull market, Hoofy would be quick to note that Shanghai is still up 3.6% for the year.

  • Note that asset classes are lower across the board---crude is off a deuce, gold is ten handles lower and equities are Punky Brewster (S's-14, N's-30)--while the dollar is also getting hit (DXY -50 bips). Remember, a lower dollar is necessary for higher asset classes but we've repeatedly noted that they can all go down together.

  • Fed Fund Futes are now suggesting a 40% chance of a rate cut (vs. 20% yesterday). Alotta folks are conditioned to equate rate cuts with stimulus but we've been short bandwagons and long "asking why?"

  • Our levels of lore will break on the opening so watch for S&P 1445, BKX 119 and EEM 117ish to morph into resistance.
  • Speaking of financials, are you watching the broke and broken brokers?

  • Did you see that the trannies were down 2.4% yesterday and stopped directly at TRAN 5K acne support?

  • Can the Raiders please keep their eye on JaMarcus?

  • Stay lucid Minyans--emotion is the enemy when trading--and don't rationalize your risk. Watershed declines sometimes toss the babies out with the bathwater. Keep an eye on your babies and use prices (with defined risk) to your advantage.

  • Naturally, in what promises to be the nuttiest day in years, I'm scheduled to shoot to the left coast this afternoon to deliver the keynote at the Ameritrade Disneyland Super-Soiree. Thank goodness for wireless trading!

  • Good luck and just remember---you're a Minyan!


R.P.

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