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Random Thoughts


If there wasn't risk, it would be called winning--not trading.

  • Holy guacamole! I haven't been this busy since I sold sun tan lotion at a Tucson nudist colony!

  • As discussed earlier, I used the opening lift in the metals to make some partial sales on my trading inventory (rolling up the stops on the balance). And, in the interest of full disclosure, I actually added to my Golden Star "put away" stock this morning. I also made partial sales on some of my piggy puts purely as a function of discipline.

  • I saw a LOT of buyers in the S&P pit out of the morning gate but they weren't able to turn the worm that is the internals (worse than 3:1). I gotta think that, if we don't see a lift soon, those buyers will turn tail--particularly with the dollar rallying.

  • Under the "nothing ventured, nothing gained" department, I've moved to the sidelines in my week long UNH schnitzel. Just keeping Minyans up as I was using a trailing stop and I've been trailed.

  • Along those lines, and based on 1) the internals (5:1 negative in the S&P), 2) the technicals, 3) the financials, 4) the dollar (rally) and 5) the general level of complacency (despite the 12% pop in the VXO), I'm being VERY TIGHT with my risk.

  • Don't trade just to trade. Not in this tape, Minyans, it's no joke.

  • Copper futes are now down over 4%. Is anyone picking up a common theme here? Dollar down, asset classes rally. Dollar up, asset classes--be it equities, commodities, bonds, schnitzel--are lower. Welcome to the hot seat, Mr. Bernanke.

  • Deep breaths--this has the potential to be a WILD afternoon.

  • Weebles, Wobbles, Tickles and Toggles: Remember yesterday when we were discussing how the "deflation vs. hyper-inflation" discussion was likely gonna toggle as psychology shifts and money supply vacillates? I think we're seeing some of that now. I can't help but picture Ben Bernanke sitting in front of the printing press, lifting his foot off the gas petal and wearily peering over his shoulder to see the markets falling apart. Maybe that's too myopic--the market is multi-linear--but it's how I'm viewing this juncture and, hopefully, it's lent a bit of perspective--and, dare I say, levity--during these particularly trying times.

  • If you're not reading "5 Things..." every day, you're missing some of the best content anywhere.

  • Remember those SOX stochastics? While the semis have broken below the March low, this complex (and the N's in general) have a more constructive reading than their old school brethren.

  • As goes the financials, so goes the tape. And the financials ain't going so well as the XBD (brokers) are off 2.5% and the BKX (banks) get clipped for a deuce. I'm involved in this complex, as you know, and thus far have covered partial (15%) of my risk.

  • Is this a prelude to more of an upside dollar kiss?

  • I've got the Chloe face going as I furiously type and trade.

  • Bill Gross raised his yield range forecast for 10-year Treasury notes amid an expanding global economy, according to Bloomberg. The yield will probably trade in a range of 4 percent to 5.5 percent until 2010, Gross, chief investment officer of PIMCO wrote in his monthly Investment Outlook posted on the firm's Web site. A year ago, he forecast the yield would range from 3 percent to 4.5 percent. U.S. consumer demand, an increase in investment spending by China, and gains in emerging market economies have combined to cause "central banks and indeed private investors to enforce higher real yields as recompense,'' Gross wrote.

  • I was at MVHQ until deep into last night and stumbled upon this column from early 2005. It's very "Minyan" and I thought thy faithful might appreciate the show.

  • "Many traders were worried over the weekend that Monday was going to be a repeat of October 19, 1987's "Black Monday." Their collective sighs of relief were just replaced by gasps for air. And that might soon turn to choking when they compare current charts to the price action through Wednesday, October 14, 1987. A cash session test of Sunday night's low probably won't hold much more than hope for bulls, especially if an interim bounce were to fill the gap back to Tuesday's close." Rod David on today's Buzz

  • "Relax, alright? My old man is a television repairman, he's got this ultimate set of tools. I can fix it!" Jeff Spicoli, Fast Times at Minyanville High. Consistent with the vibes we've shared of late in the pharma sector, I'm nibblin' anew on some drugs. Nothing psychedelic, mind you, just some last summer upside calls in names like Schering Plough. Why calls? Because I like this sector on a relative basis but it still has absolute market risk. And besides, I've got a hot date with Linda Barrett this weekend and the last thing I want to think about is undefined risk! And given what I'm seeing in the tape, risk definition is exactly what Mr. Hand would want us to do!

  • I'm fatter, er, flattered!

  • If there wasn't risk, it would be called winning--not trading. Take deep breaths, wait for your pitch and remember that the definition of an investment should never be a trade gone awry.

  • R.P.
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Position in metal equities, GSS, financials
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