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Random Thoughts

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Discipline and dry powder allow you to employ effective scales.

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  • Am I "too" concerned with SARS? From your mouth to God's ears.

  • Thus far we're seeing the return of the double wishbone market -- equities and the dollar up, crude and gold down. Will this day be another moon shot? I can't tell you for certain, but with the VIX near 30, I'm licking my chops and scaling into May puts.

  • There's likely gonna be a fair amount of corporate preannouncements coming. Will they matter or will they get the Iraq free pass (ala Elmer)?

  • Yes, I had dinner with my mother last night and yes, I had dinner with John Succo last night. It was a two-dinner kinda night: a little Houston's with Carole and a little Tao with John!

  • My scale trail? I came in relatively balanced (QQQ puts vs. situational longs) and I've scooped up some vol at these levels and slipped one leg into my bear costume. Now I wait. Patience and discipline.

  • The fall of Baghdad, "good" news on Saddam, "good" news on Osama and a SARS nonevent are "bullish" catalysts currently being discounted by the market. While the first three are likely a matter of time and the fourth doesn't seem important (yet), please note that complications to any/all of the above are not currently priced into equities.

  • That said, breadth is 3:1 positive; there's leadership from the banks and semis; the dollar is jiggy; crude, fixed income and gold are slippy and Europe is up across the board. It almost seems too easy.

  • I'm seeing a lot of bullish QQQ bets being put on through options. Again, that's potentially self-fulfilling in the near term but bearish (contrarian) from a broader perspective. We say similar plays towards the end of expiration week, fyi.

  • Yesterday's poll? The Minyans have spoken and while I'm admittedly surprised, this is how the vote tallied. Blazing Saddles rode away as the favorite Mel Brook's movie of all time, History of the World came in second and Young Frankenstein, High Anxiety and Space Balls all tied for third. The Producers was shut out! Someone call Lili Von Shtupp!

  • The weekly Investor's Intelligence bull/bear survey was little changed. Bulls came in at 47.2 (vs. 47.8), Bears 34.7 (vs. 33.3) and correction 18 (vs. 18.9).

  • Yes, we are seeing some European real money accounts buying.

  • For the last few days, we've discussed the crossroad for the market. Either it was a healthy and natural pullback (before the resumption of the rally) or it's a topping process. I still think it's too early to call but the retest camp is getting loud again. I'm uber-respectful of the action -- I see what you see -- but I am viewing this as an opportunity (on a tape basis) for Boo. In the interim, I'm dancing around with some "situations" on the long side and accumulating defined risk downsides in a handful of big caps.

  • With the VIX flirting with 30, the VXN flirting with 40 and the QQV at 36, I think there are a couple of ways to win with gamma.

  • OK, who's having March 17 flashbacks?

  • Mind the gap in the S&P from March 24 -- through 880 (if and when) works to 895.
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