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Random Thoughts

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Is today a "sea change" as a function of tangible evidence of mortgage discord?

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  • The Thursday dew is chewing through as some intra-market trends emerge. In particular, I'm watching the stealth traction in the metals and biotech arena for two reasons. First, I'm involved in the metals (there are alotta ways to win, from Japanese ETF's to war premium) and second, "sector rotation over downside migration" has been the hallmark of the bull phase.

  • Is today a "sea change" as a function of tangible evidence of mortgage discord? I'm not sure, although I do believe it's a matter of time before the seas are indeed angry. Active traders don't need to make that distinction, however, as they can simply read the leaves and as it stands, those sittin' on a southbound train.

  • Upside tries won't shock me but unless we see A) traction in the financials or B) creepage in the internals (neither of which seem sustainable). Boo should finish the session with a paw full of honey.

  • If bad seasons define good fans, does a bad game redefine a good name?

  • We've long had a collective Minyan eye on Goldenstar (GSS) and it's acting, well, golden today (+4%), easily outpacing the other metal shares. I'm there but, as discussed, I am a buyer of dips rather than a chaser of blips.

  • Keep half an eye peeled to the internet space. With eBay and Yahoo green, all eyes turn to the G-double O-G for guidance.

  • Keep half an eye on the semicaps (AMAT, KLAC) and PLD's (XLNX, ALTR) as they're trying to put on a brave face in a crimson tape. That's typically a sign of underlying demand and IF (big if) the tape turns, we should see "N's over S's."

  • CAN the tape turn? It can...although it will be a mighty tough task without the financials, which are getting Jack Hammered.

  • Watch H&R Block (HRB) as a tertiary sub-prime play. I'm involved, so you know, and have an eye cast towards the gap below ($22.75).

  • What was it that Inspector Kemp used to say? "A riot is an ungly thing... undt, I tink, that it is chust about time ve had vun." True Dat.

  • Does sub-prime matter? In a derivative laced, housing-supported consumer driven financial fabric, you betcha Mister.

  • Lotsa good behind the scenes things coming in MVTV land. Stay tuned.

  • The following Buzz took place at 9:11 this morning...

    A spry brown bear just sprung into my office with fists full of fury. In one paw, he had the pukey Toll Brother's press release and, in the other, tangible proof of the sub-prime lending woes.

    "All I read about in the press is how we're at multi-year or all-time highs across the board," he muttered through gritted teeth, "but I've got proof that there are cracks in the market foundation."

    I measured Boo up and down before finally locking eyes with him. Indeed, I had seen him in this state before. "You're right," I finally said, "there is finally some "there" there for the bears--particularly on the heels of Hoofy's inability to run the tape on the heels of a strong Cisco."

    I asked him to keep close tabs on BKX 119 as traction in the financials--particularly above that level--would be a tell-tale sign that an underlying bid persists.


R.P.

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Position in gss, hrb, metals, financials
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