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Random Thoughts


The homies, money centers, metal equities and hardware are the early casualties in this requisite probe.

  • We noted the dry action in the pharma space yesterday (as a potential safety spot in an uncertain market). While binary risk remains, I still think this sector is attractive relative to tech and financials.

  • Russia started the day -14% from the May 10 highs although our sources tell us that the locals are still "not in panic mode." This brings back memories of the Ruble Rousing in the late '90's, when most thought "Russia doesn't matter" and it led to contagion in our derivative-laden, globally interwoven financial fabric.

  • NYMEX said margin changes for copper, gold and palladium futures contracts went into effect at the close of yesterday's session. Gold futures increased to $3,500 from $2,750/contract, copper futures raised to $6,500 from $6,000/contract and palladium upped to $2,500 from $2,000/contract.

  • "Who can blame these crazy volatility sellers? On Jan 11th the S&P 500 Cash closed at 1294! They'll continue to sell volatility until they get burned." Minyan Kevin from the floor of the CBOE

  • I bit the bullet today and began a daily regimen of uber-early morning workouts with a personal trainer. It's been a long time coming and, from what I remember, morning shvitzes typically lead to a healthier state of mind.

  • The Peru election, for those involved in the metals or energy, is slated for June 4th.

  • I spoke with Bernie Schaeffer this morning, who is at the Money Show in Las Vegas. "I've been doing these shows since the early nineties," he said, "and this is the most crowded I've ever seen it. There's gotta be 15,000 people here."

  • Market breadth, which was 2:1 to start the session, has edged to the flat line in both the S's and N's. Not great, but far from the Art Carnage we saw yesterday.

  • "As for where gold may be headed (which assumes that it's experiencing a correction greater than the one-day wonders seen in the past group of weeks), Justin Mamis suggested on his call this morning that $650, plus or minus, might be a worthwhile target. For the time being, I am willing to go with that, though I am on red-alert and feel very naked not having my bullion position." Professor Bill Fleckenstein on today's Buzz.

  • While 24 was my favorite show on television, the silly subplots and questionable acting the last two weeks have dropped it back below Entourage.

  • Smack Dabbage! After some snazzy out-performance to start the session, energy and metal issues are having, uh, issues as we trend into Turnaround Tuesday. Given the runs these sectors have seen, we must allow for further slippage in, what I believe, is the context of a secular bull run. Currently, my only risk in the space is a defined risk call position in Pan American Silver (PAAS) which, as we've discussed, is oversold relative to her peers. The stock popped almost 4% on the opening, only to give it all back (and then some). I'm still there, so you know, although some partial sales (into the jig) would probably have been a disciplined approach. It happens, I know, and I simply wanted Minyans to know that 1) I'm still there, 2) Nobody is immune to missing opportunities at times and 3) The XAU is still not oversold on a stochastic basis despite a 16% correction in three and a half sessions.

  • Further to the discussion above, and while I'm conscious that there may be "more than meets the eye" (read: nationalization/hoarding concerns), I'm officially scanning the landscape for potential purchases. In fact, I just nibbled some calls in gold equities.

  • I can't shake the feeling that, after a requisite probe, Snapper is gonna give the upside (in the broader tape) a shot. It won't be easy--and it's far from a given--but it's the sense I get.

  • "AMR Corp. (AMR) priced 15 million share spot secondary (company sold stock to "de-lever balance sheet") at $26.80 through Merrill Lynch (MER). The stock traded pre-open with over half placed to buyers." Professor John Succo on today's Buzz (position in amr)

  • I saw a few buyers of United Healthcare out of the gate and bought back some calls (with trailing stops).

  • We might bring home the bacon and fry it up in a pan but unless the financials find a bid, Hoofy is gonna have a tough go of it today. With BankAmerica, Citigroup, JP Morgan and Wells Fargo all dancing with the Red Dye line in the sand, the guacamole has a bit more spice. Given their out-performance yesterday, some laggage is "fine." But if this morphs into outright slippage, it'll serve as a headwind for the Matador Crowd

  • I pity the fool who didn't read Pepe's Mr. T Gold indicator yesterday!

  • R.P.
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Position in PAAS, JPM, UNH, metal equities
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