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Random Thoughts


Setting stops--or trailing stops--removes emotion.

  • As discussed yesterday, I did the Texas two-step in the metal space, shorting some silver stocks into the Apex (SIL) smeltage and reversing course into the teeth of the supply. Alas, and as discipline must always trump conviction, I was stopped out of my metal trade this morning (for a marginal loss) and have moved to the sidelines. My desire to add exposure in this arena on a downside (oversold) disconnect (with a longer-term horizon) remains in place.

  • "Todd, thanks for the pointer in today's Buzz to Louis Rukeyser's obituary in the Washington Post. Enquiring Minyans might also be interested in this wonderfully-written retrospective by James Grant in today's New York Times. Best wishes, Minyan Ben."

  • The banks and brokers have been the definition of "either/or" of late. When they're both pointing in the same direction, it'll be a fabu tell for the tape. As it stands, they're both dabblin' in Red Dye today.

  • Lest you missed it yesterday morning after the short brown out, please make sure you read Professor Goepfert's excellent column. These are unique times and this is the type of content that shouldn't be missed.

  • One of Jeff Saut's more salient thoughts during a recent idea dinner was the inevitability of a North American community. Minyan Brent forwarded me this report by the Council of Foreign Relations that supports the savvy soothsayer's vibe.

  • Hoofy stepped into my office this morning to point out the potential reverse dandruff that is forming in the S&P. Technicals are but one of four primary metrics, as we know, but it's worthy of a mention as we wade through this particularly squirrelly tape.

  • Like your longs, dig your shorts and leave alotta dry powder for the fat pitches that will surely arrive.

  • I've heard of being glued to the television but this is nuts!

  • Market internals were 2:1 negative across the board this morning but have since moved to a flattish posture on the N's and a slightly negative reading for the old school. This is the first time in recent memory that the tech breadth is better than the S&P and IF (big if) Snapper shows his face, we should expect them to out-perform. In that vein, watch the semicaps as they've traded dry all morning.

  • The weekly Investor's Intelligence survey finds a drop in bullish sentiment to 43.9% from 45.5% and a rise in bearish sentiment to 28.6% from 25.8% in the previous week. This is incrementally bullish but not a reason, in and of itself, to be bullish.

  • Setting stops--or trailing stops--removes emotion. It doesn't protect you against gap risk (see Cigna) but it's certainly viable during the trading day.

  • If this news came out prior to the draft, Matty Leinart may have dropped to the second round.

  • While this may seem counter-intuitive, there is significant "peace risk" in both the energy and metal space. Of course, peace is quickly--and unfortunately--becoming a low probability affair.

  • Biotech continues to wilt under the weight of supply.

  • Note the flag pattern in the Russell 2000.

  • Excitement continues to build for the upcoming Minyans in the Mountains financial retreat. All ye faithful who attended last year's fest in Ojai can attest to the incredible benefit of human capital and the value of relationships in this day and age. We've got an all-star cast lined up and registration, thus far, has been an upside surprise. The early bird special will remain in play through the end of the month so please take a peek as we wade our way towards a mouth full of S'mores!

  • Speaking of small caps--and while this is purely anecdotal--I'm getting "hit up" with a ton of micro-cap ideas from all angles and avenues. In my experience, that's late stage speculation stuff.

  • I've jockeyed some risk in the financial arena as I toggle my autumn piggy puts between Citigroup and JP Morgan. The latter intrigues me as they're the world's largest derivative player by multiple factors.

  • I highlighted the Steven Colbert trifecta in yesterday's buzz. Not because I was trying to make a political statement, simply because I wanted to put a smile on ye faithful's puss.

  • Please be sure to see the weakness in the HMO names in general and Cigna (-11%) in particular.

  • Happy 58th birthday, , and many peaceful returns!

  • R.P.
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Position in Financials, JPM, C
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