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Random Thoughts


Respect the potential for sizable (two-sided) movements via trading a tad smaller or by using wider stops.

  • I wanna thank our friends at MarketWatch as we kick off a newfound relationship. Callaway & Co. are a class act and we look forward to the mutual synergies.

  • Try as they may, try as they might, the Matador Crowd can't seem to shift the market internals. The S's and N's are both stuck in the mud with the old school internals sporting two red for each stock ahead. Be that as it may---and it may be telling, particularly with the dollar at session highs (DXY +1%)--the tape has "room" to S&P 1280 and NDX 1635 (respect the bungee).

  • Reminder: A stronger dollar hasn't been a friend to equity bulls.

  • "The Amex Gold Bugs Index (HUI) couldn't hold the 320 level. Next logical stop is 296, and I would note the downside risk remains very high despite the nine-session 16% slide." Pepe Depew on today's Buzz.

  • Europe , still smarting from yesterday's premature anticipation, continues to dabble in Red Dye. Brazil and Mexico, for their part, are roughly 2% lower.

  • Bon Vonage? Keep your eye on Vonage Holdings (VG), today's "hot" IPO as it "broke" price two minutes into its publicly traded career and is currently off 12%.

  • It was only a matter of time....

  • Follow-Up Vibes from Snoop "I'll see YOU at MIM3" Dwyer of FTN Midwest Securities (for previous Tony noodles, click here and here): "We remain bullish from an intermediate-term basis. While the pain and volatility over recent weeks have been surging, we ultimately think it is healthy to wash some of the excesses out of the commodity related and emerging market issues. The bottoming process is not easy and we fully expect to "feel" like a significant drop or significant rally is coming over the next few weeks as lows are tested and rallied from. We continually have to remind ourselves during these periods that "feelings are not facts" because we can feel so wrong. The intermediate-term technical oversold extremes coupled with our view of a fundamental mid-cycle economic environment suggests any further meaningful drop to as low as 1225 on the S&P 500, while painful, should prove temporary."

  • We used to speak about "rolling volatility" and now we're living it. Respect the potential for sizable (two-sided) movements via trading a tad smaller or by using wider stops.

  • I don't blame her--I would have been bugged too!

  • The weekly Investor's Intelligence survey shows a drop in bullish sentiment to 43.8% from 46.3% and an increase in bearish sentiment to 27.6% from 25.3% last week.

  • Anyone wanna bet that this isn't the number for Tel Aviv car service?

  • Yawn! Another day, another $30 handle drippage in gold. Thank goodness for defined risk (which I'm layering into after making a slew of sales yesterday).

  • Bad tapes equal good friends? Perhaps--we're seeing a steady flow of mountaineers registering for our mountain mingle. There's only seven days left if you wanna catch the early bird so put this on your radar---it's a vacation that will pay for itself many times.

  • And finally, while this is a bit long for a Random Thought, this vibe by Professor Succo on today's Buzz is about as apt as I've read in a while. As such, and with a mindful nod to John, I wanted to share it with hopes that it helps ye faithful who aren't on our real-time chime:

    "The Box...Has the Fed already over-shot rates? In an inflationary environment the answer is no. In a deflationary environment the answer is yes. So what are we in? I have said in the past we are in both.

    First of all, the Fed can't purposely over-shoot. They must do what the market is demanding. The market (Asia) is demanding higher rates because of the immense amount of debt the U.S. needs every day to consume. The more we want, the higher the price. Simple supply and demand. There is a cost to our wild consumption.

    Second, the U.S. is experiencing higher prices in input costs and lower prices in output prices. This is a nasty form of stagflation due to years and years of credit expansion while Greenspan was at the helm.

    Problems have been subdued up until now as the economy has shown growth. But that growth is based on negative real interest rates (real inflation is higher than nominal rates despite government statistics showing otherwise). Why doesn't anyone look at the situation as given free money why can the U.S. economy only grow at 4-5%. What will happen when the days of free money end?

    That day is approaching. The box will get smaller and smaller as it does."

  • R.P.
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