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Seren Dippity


I would rather Minyans have a full plate of information before deciding which risk to chew through.


Now watch as the ball revolves and the nighttime calls
And again the hunt begins and again the bloodwind calls
By and by again, the morning sun will rise
But the darkness never goes from some men's eyes.

(Grateful Dead)

Good morning and welcome back to flickering pack. A new day is here and we're diggin' in deep as the ursine awake from a slumbering sleep. The early morning world is awash in red and fingers are pointing to Asia as a culprit. China raised its key interest rate overnight, adding to tensions that the rate of growth may slow in the world's most populous nation. European bourses are off 1-1.5% across the board, the metals are taking it on the chin (silver -4%) and pre-market futes are slipping in kind.

Have the Hawks taken over the world? Settle down Dominique, we're not talking about the hardwood--we're talking about the hard track. With China's hiking shoes tied tight and Europe already on the switch-back, all eyes will turn to Boom Boom Bernanke as he hurries to the hill at 10:00 and testifies before the Joint Economic Committee of Congress. This will be his first congressional cameo since February and ears will be peeled as we listen for clues to the fuse.

Serendipity? Get your mind away from Frozen Hot Chocolates, we've gotta keep our eye on the ball today! I hopped out of bed this morning, arrived at my trusty turret and got the following mailbag from one of our fellow Minyans. I share it without pride or prejudice as we always strive to see both sides of every trade (or, market as the case may be). This may--or may not--fan the flames of the smoke we smelled last week but we'll find complete clarity with the benefit of hindsight.

"Hey Toddo, I'm not sure if you're aware but I thought Minyans might find this interesting. Mark Cook has a Cumulative Tick overbought indicator higher than in 1998 (and close to March 2000) and is predicting -300 points S&P anytime. He talks of a "dam about to break" or "warehouse filled with gas..." and says he is scared and owns no stocks. In addition, as you guys have noted, many DeMark indicators are a SELL and the SPY closed the cycle with a Daily 13 on April 20. The DAX opening today was a DeMark 13 as well. Further, do you know that, in US Dollars, France and Spain are above the March 2000 highs (and Italy is almost there as well)? Food for thought... Thanks!, Minyan GZ."

Speaking of smoke, I wanna share this vibe from one of the sharper metal traders I speak with as we hold hands and sing some Skynyrd:

"Toddo, The following was written by Bill Murphy on his excellent site. It explains at least part of the smoke you've been smelling in the commodities markets. Since the activity seems to be focused in
Europe , you wouldn't necessarily see it in the banks, although I'm hearing that a bulge bracket stateside ship is (expletive--think Fletch and Moon River ) as the major short seller in the gold pits. They have been heavy buyers on RALLIES for the past couple of weeks, which is completely opposite their historical trading pattern" Minyan B

That makes sense, MB, as the "natural hedge," if caught short metal "A" (let's call it copper) is to hedge yourself with metal "B" (silver?) or metal "C" (gold?). That would certainly explain the volatility in the group as opposed to one metal in particular. I will again offer that I'm not an expert on metals, per se, but I've been watching tapes long enough to know when something is funky. IF it is, and as we've discussed, the million Yuan question is one of contagion vs. containment. Chicken Toddo? Maybe--and, part of me hopes so--but I would rather Minyans have a full plate of information before deciding which risk to chew through.

For my part, and as shared real-time on yesterday's Buzz, I recently consolidated my sheets for two reasons: I wanna focus on fresh opportunities (I had alotta time consuming remnants) and I want an arsenal of dry powder. I've got some select longs (which I may pare to buy back if I sense some slippage) and a spate of downside gamma in the financials. I've also got a laundry list (in energy and metals) that I wanna buy back if and when the (oversold?) time comes. Perhaps concerns provide that opportunity--time will tell--and we'll know soon enough.

And finally, we're getting a slew of new attendees for our upcoming Minyans in the Mountains financial retreat. We've shared the speaker list. We've noodled the agenda. We've highlighted our human capital and the inherent personal, spiritual and professional benefits. And, of course, we'll have our fair share of fun at the back-to-back Minyan Ranch Mingles. The uber-early bird special expires this weekend so if you've got the inclination, please take advantage of the cost savings. A dream is only as powerful as those who believe in it and we look forward to sharing our journey with you and your family.

Good luck today.


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