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Hump Day Randoms


And just like that, China is a few percent from an all-time high? That, and India (which was off 1% overnight) are the dogs that wag the stateside tail.

  • Professor Bennet Sedacca astutely noted the correlation between the S&P and the $/Yen yesterday-a heckuva tight fit. The correlation I would like to (continue to) highlight is that broader asset class correlation. We touched on this in our oft-mentioned "dollar devaluation vs. asset class deflation" thesis and it's the reason that everything, from stocks to commodities to foreign bourses, are trading in a monolithic manner inversely to the dollar.

  • Consistent with my humble three point plan-the hard melt Monday, the wire-to-wire ramp on Turnaround Tuesday and an anticipated resumption of the sell-off thereafter, I scaled out of my trading longs into yesterday's buff close (S&P 1400 and NDX 1750) and balanced a bit.

  • I'm allowing for some follow-through, although those levels, along with BKX 116, should serve as decent resistance for the tape. The caveat for the bear camp? Those twisty, hooking stochastics in the financial realm. As go the financials, so goes the tape.

  • Is that a pipe in your pants or are you just happy to see Daisy?

  • Given the 20%+ haircut in the VXO, some of my downside exposure was in the form of Aunt Fannie (FNM). I waited for the requisite squeeze (on the heels of Big Ben's tough talk) and nibbled on some puts as it approached session highs. $56 represents tight and defined short side risk for this particular try and that'll serve as my rip cord.

  • That (and some other cheap gamma) allowed me to hold onto a handful of faves on the longer-term side of my book, including SunMicro (SUNW) and Goldenstar (GSS). I would characterize my current (and subject to change) posture as neutral with positive gamma and lotsa dry powder.

  • So where should the VXO stop? The Mandelbaum Bar Mitzvah (13ish) is support, although we should all note the "gap" that resides directly under that thunder.

  • "The volume swings we've seen over the past week have been pretty incredible. We've seen two 10-to-1 down volume days on the NYSE, now we're getting the opposite with a 10-to-1 up volume day. I can find 10 other similar situations in the past 60 years. A week later, all but one were positive, by an average of about +1%. The lone exception was 10/21/87 which signaled the initial recovery from Black Monday. Similar to that instance, at some point most of these intense volume reversals ultimately went down to test the momentum low after a little more follow-through, and most of those tests were successful as they formed major market lows (August 1990, October 1987, November 1978, May 1970, June 1967, June 1965, October 1957, March 1955, May 1947 and January 1947)." Professor Jason Goepfert on yesterday afternoon's Buzz.

  • If your Buzz blinks in the middle of the trading day, simply yell "ARMEGGEDON!" and then hit F5. All will be magically well.

  • And just like that, China is a few percent from an all-time high? That, and India (which was off 1% overnight) are the dogs that wag the stateside tail.

  • It's hard to argue with the collective sense of entitlement, eh?

  • There were a fair amount of "all clears" issued in the overnight press. I'm not in that camp although a push through our tri-fecta levels will be a strong first step in the process of self-fulfillment.

  • Good luck Minyans and hit 'em hard!


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Position in gss, sunw, fnm
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