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Random Thoughts

By

Get used to the word "correlation," Minyans.

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  • I humbly offered a three point plan yesterday, one that called for a sloppy close, a strong Turnaround Tuesday and then a resumption of the sell-off. Indeed, based on my actions into the closing bell, I found myself leaning long this morning for the first time in a while.

  • What were my vehicles? Some were the brokers as A) they were the biggest losers these last few weeks and B) I felt that they would bounce (at least once) at the XBD and BKX 200-day moving averages.

  • While many of those names report next week, I'll be long gone by the time those catalysts arrive.

  • Better lucky than smart? No doubt, cookie. I sold 1/3 of my (trading) longs on the opening and will slap trailing stops on further inventory. These are rentals and they're held for sale. The only question is when and where.

  • While I expect a probe lower at a point, my sense is that they could close 'em on the highs (I know...I'm asking for it).

  • If they do (close 'em on the highs), I'll sell the meat of my exposure with a conscious nod that there could be some follow through (before a resumption of the sell-off).

  • Where does this bounce have legs to? S&P 1400 and NDX 1750 seem like intuitive spots. Of course, I'm not making any blind bets. If my (trailing) stops are elected, I'll simply remind myself of what Gordon Gekko used to say. "A fool and his money are lucky enough to get together in the first place."

  • Maybe I'm reading between the lines but JP Morgan doesn't trade right to these old eyes. It's been underperforming on the downside and today, as cats kiss dogs and the world is at peace, it can't seem to find a bid. I own a residual put position in the name (cheapies, out of the money) and I'm not pressing the downside (yet). Still, as mis ojos son sus ojos, I wanted to share the thought.

  • The mirror image of yesterday's scrimmage? Yep, breadth is 5:1 positive on the big board, the financials (XBD and BKX) are back above their respective 200-day's and, well, subsectors from metals to energy to small caps and back are giggling with upside vengeance.

  • Emotion is the enemy when trading, friends. Don't be that guy (or girl).

  • I am shocked that I'm hearing hubris from the bulls simply because pre-market futes were higher. If I've learned anything over my career, it's to stay humble or the market will do it for you.

  • Get used to the word "correlation," Minyans. It's a derivative of the rising--and sinking--global liquidity that is affecting all boats on the global seas.

  • China and India down, stateside markets were lower. Emerging markets bounce, futures are indicated higher. Does anyone wanna venture a guess which side is the dog and which is the tail?

  • Things That Scare Me

    • Carnies. Circus folk. Nomads, really. They've got small hands and smell like cabbage.

    • The fact that China is a few percent from an all-time high. That wasn't even a real correction!

    • The 'tude paraded by alotta folks on financial television. I'm long humility and short hubris in size.

    • The time remaining for our current administration and the potential for an uptick in geopolitical conflict before they hand over the keys.

    • The all-clear signals we're starting to hear.

    • The way mentally ill people slip through the cracks of our healtchare system.

    • The fact that other people were at the gym this morning at 6:00 AM.


R.P.

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Position in jpm, financials, metals
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