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Random Thoughts


Some days you're gonna be the bug, other days you're gonna be the windshield.

  • Europe, while off it's lows, continues to dance in Red Dye.As the ticks flickered to begin today's fray, I aggressively pared my longs and nibbled anew on downside gamma in the financial space. The ensuing Snapper, on the heels of Gentle Ben's astute observation that the Fed may pause rate hikes "at some point," squeezed the bejezus out of the pressy bears in the 'hood. In hindsight, I shoulda known that his vernacular was gonna be "market friendly" and proactive patience would have been the proper (and more profitable) approach. Instead, and as I have plenty of dry powder, I used the ensuing strength to layer into more exposure and will trade around those cores.

  • In the midst of a morning that was nuttier than Austin Power's coffee, the metals reversed sharply higher. While the silver ETF may have had something to do with it, the more likely causation--for metals and other asset classes--is the melty dollar, which has reversed 1% lower just as asset classes found a bid). Shocker, eh?

  • Attention Spider: Your presence is no longer necessary after the close.

  • Centex (-8%) is weighing on the homies as they start to put an area code between them and HGX 264.

  • In the "it could be worse" department, I suppose I should be thankful that I pared my UNH exposure yesterday. In the interest of full disclosure, I kept some Golden West puts and added a bit into this morning's lift.

  • "Isn't it strange how Oil and Oil Service stocks (see yesterday's Point & Go Figure piece looking at the OSX) recorded multiple DeMark sell signals and THEN the Senate begins a witch hunt investigation into oil company profits? If (big if) this is a significant turning point for energy stocks, investors will later look back and point to the politicization of oil company profits as a Smoot-Hawley moment. I just think that is a very interesting possibility." Pepe Depew on today's Buzz

  • Oy-Ran!

  • The tea leaves are a mixed bag as breadth flat lines, the financials flex, the homies hurt and the semis slink higher.

  • Hope springs eternal for the silver and black.

  • Europe, while off its lows, continues to dance in Red Dye.

  • Cheap San Diego real estate!

  • "I wrote an article a while ago called "The Pin Prick" that told the fairy tale of higher rates pricking the speculative bubble in asset prices. The "prick" came from Japan. This morning China unexpectedly raised its official interest rate in order to stem a reacceleration for investment spending, which jumped 28% in the first quarter. They are likely to follow this up with an increase in margin requirements. These are truly speculative times. Is it ironic that the "prick" comes from a communist country? I think not since government involvement in markets is becoming gross. This may or may not be the "prick" that starts a reverse of speculation, but caution once again the risk is high." John Succo on this morning's Buzz

  • Let's see, if you came into MY house and grabbed my balls, I'd prolly defend myself too!

  • Some days you're gonna be the bug, other days you're gonna be the windshield. The trick to trading is balancing the ups and downs and maintaining lucidity at all costs.

  • Bernanke, turning his attention after taming the tape, offered that the treasury should act on the GSE's if congress doesn't. "The U.S should maintain power to limit Fannie debt"

  • Daisy is demanding a recount!

  • Minyan Mailbag:

    Toddo, as you have said, time horizon is important when making investment decisions. When you ask if we can withstand a 10% market drop my question to you would be "a 10% drop for how long?" At 53 my horizon is much shorter than it was at 33. Best, Minyan Rambo."

    Minyan Rambo, You've hit the nail on the head with regards to "inconsistencies" in certain segments of today's financial media. It's impossible to offer blanket advice to a faceless audience without knowing their unique time horizon and risk profile. To each their own and to each, those decisions have massive implications. With regard to your question, if your risk appetite is shrinking, you must adjust accordingly. I think we're gonna see a lot more volatility and it's better to ask yourself these questions in the calm before that storm. Stop losses (on trades) and wider-scales (on long-term holding) are potential approaches, depending on your risk-appetite. And, of course, don't speculate with what you can't afford to lose. When the marginal dollar lost hurts more than the marginal dollar gained helps, you may wanna explore more stable streams of income (particularly in a rising rate environment).

  • R.P.
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