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Random Thoughts


Oversold conditions can be worked off as a function of time or a function of price.

  • Minyans must remember that the geopolitical issues aren't the root cause of the big picture malaise. We've got massive structural imbalances, a bloated consumer and all kinds of issues to digest in a complicated financial mess. Please keep this in mind if your risk is out-sized and you need to re-balance your book.

  • With that said, Sky News is reporting that Israel would agree to a ceasefire if Hezbollah withdraws from the Israeli border area (citing an Israeli official). IF that happens (and I'm not sure how plausible it is), we'll likely see a relief rally. It is then, while the screens are green, that we'll have an opportunity to reposition our risk.

  • On the flip side, I'll offer that the gloves will come off if Tel-Aviv gets hit. Haifa, as it stands, has already pushed the envelope of no return.

  • I was attempting to scribe a Bloomberg message to a fellow mountaineer this morning and my terminal "went down" six seven eight times in a row. Eight times...just as I was finishing up a long missive. Frustrating? Yeah, sorta--but I refuse to let it get me down. I mean, it's Monday...and this is a Mondays sorta thing, particularly in the context of Mercury retrograde.

  • Oversold conditions can be worked off as a function of time or a function of price. And I offer that despite the fact that the S&P complex is far from oversold.

  • The dollar continues to hold its gains (DXY +90 bips) and commodities are feeling the brunt of that dynamic (CRB -2%). Thus far, equities, despite 2:1 negative breadth and a drekky Citi (-2.5%), have shrugged off these elements. Could today be the day that the "dollar tell" fails or are the quacking ducks lining up for an afternoon melt?

  • And note the traction in the brokers as they try to form a "higher low" vs. the June lows of XBD 120.

  • If you dug Miss Stephanie's excellent vibes---I know I did--feel free to reach out to her and welcome her to the 'Ville!

  • "In an environment like this, it is natural to want to get even more defensive. Frankly, it is exactly what we feel like doing, but history suggests at worst, the equity market is nearing the sentiment that generates a dramatic oversold bounce (remember the SPX has just given back the nearly 5% gain off the recent low). Again, selling or becoming more defensive on equities at current levels may be right and feel right for the coming few sessions, but it is also important to note that bounces from such negativity are sharp and very difficult to time. Even if you are more negative on the prospect for stocks, it might prove a good idea to become more defensive on a meaningful bounce rather than selling after such pronounced weakness." Snoop Tony "I'll see YOU at MIM3" Dwyer of FTN Midwest Securities.

  • I've covered a bunch of my financial shorts (read: peeled out of puts as JP Morgan and the BKX, for that matter), tests the 200-day. I still wanna "be there" from a bigger picture perspective but I've choked up on my risk bat and will always be forthright with ye faithful. I reserve the right to "put 'em back out" if and when the mood strikes.

  • Mini-Minyan Mailbag

    ( Editor 's Note: The following mailbag is from Minyan Sol in Israel, who I had the good fortune of meeting during my recent travels to the Middle East).

    "Hello Vanessa and Toddo--Long time no write but I think about you guys often. Can't help it, I read everything on the Minyanville website daily, save Sunday, when I get to read Friday's entries. Well, you know just about everything in real time as it is happening here, except for the specific details. The escalation on Friday night was just breathtaking (your 12-4 P.M.), as it ratcheted up every few minutes in unfolding events. One detail that you will not find in the papers is about the second of the Saturday missile barrages in Tiberias. You are probably wondering how close to Decks a Katyusha hit. The answer is, to take a page out of Toddo's patented language, "thisclose." I don't know if you recall, but the parking lot in which we parked, was for two restaurants, a Chinese restaurant in front/left, and Decks, to the right. The Katyusha landed, and exploded, in the water just outside the Chinese restaurant, causing quite a bit of damage to it. They didn't say anything about Decks. Nobody was hurt in this attack, it being a Kosher restaurant closed on Saturday.

    We have "refugees" from Haifa staying with us in our apartment, relatives of my wife. I assume that the current situation can last for another week or two, assuming it does not escalate, and we are hopeful that Nasrallah does not have further surprises for us, as he claims he has, and that Israel comes out in a much better situation relative to the Lebanese border and the status in Gaza. I just called Vanessa's mother in Natanya, she sounds cheerful, as usual. I wish you all the success at your Vail retreat, and to you Toddo, a blowout victory in your rubber match softball game with Succo. Your friend, Minyan Sol.

    P.S. The Israeli stock market, down 10% on Wednesday and Thursday, and down 3% earlier today, closed up 3%. The shekel also rose close to one percent relative to the dollar.

  • R.P.
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