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Random Thoughts

By

This is my kinda tape!

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  • I don't have the legs to party like a rock star anymore. At this point, I'd settle for partying like a jazz star.

  • T-minus 4.2 days until September expiration. There is outsized open interest at both (and some potential pull towards) S&P 1250 and S&P 1225.

  • "In 1982, U.S. equities surged in what few believed at the time could be sustained strength. From August to the end of that year, the S&P gained 31.32%, producing an overbought condition that left investors with faint hearts reluctant to chase. These types of conditions, however, tend to be some of the safest for longs because they represent unbridled buying that usually has meaningful duration. Though the Japanese elections were anticipated, the breakout from 12000 a few weeks back and the acceleration of a mostly stagnant market for the last 15 years may represent for Japan, the same watershed acceleration the U.S. faced in August 1982." -- Lehman technician Jeff DeGraaf

  • Ojai vibes from Minyans in the Mountains.

  • The N's over S's dynamic continues as portfolio managers reach for beta.

  • The drippage in crude and attendant slippage in the energy patch (OSX and XOI -2.5%) are helping that dynamic as well.

  • Vibes from uber-Minyan John Roque of Natexis Bleichroeder:
    • Positive Patterns: Ann Taylor (ANN): Nice price/volume action on Friday moved the stock toward the upper end of its "cup." Estimated technical target is an aggressive 40. Best stop 26. Momentum readings are positive. Philips Elect (PHG): ADR action (and local share price action too) is encouraging. Estimated technical target of 33. Best stop 26. VF Corp (VFC): The current 7+ month base is what we like to see. Estimated technical target 70. Best stop 57.

    • Negative Patterns: Costco (COST): It's really in the staples sector, but please check the charts anyway. K-Swiss (KSWS): The August 3 price action suggests exhaustion and our momentum indicators are weakening. Reduce on bounces, risk to 25. NBTY Inc (NBTY): Negative pattern with stock below downward sloping 50- and 200-day moving averages. We know the stock is already down a ton, but there's nothing evident yet that tells us to turn positive. Risk to 15.

  • Vibes from Raymond James sage (and MiM2 keynote) Jeff Saut

    "While we are more optimistic than Richard Russell, we remain "Predominantly Defensive" in the investment account, thinking that the coming Katrina-induced "liquidity injection," combined with the recent explosion in the money supply, will create an inflationary scare that will lop 5% to 10% from the major averages as they adjust to inflationary-impacted earnings.

    Other worries include:

    • Our sense that Katrina will cost more, and have a much longer "tail," than most expect.
    • Rising interest rates that should put a headwind in the face of a finance-centric economy, as well cause a P/E multiple contraction.
    • Persistently high energy prices, particularly natural gas, as we enter winter. Moreover, we think $3.00 gasoline is the tipping point for an indebted U.S. consumer
    • Government spending, as Steven Roach opines, "Never in modern history has the world's leading economic power tried to do so much with so little"...Washington is upping the ante as it opens the fiscal spigot to cope with the post-Katrina reconstruction, at the same time it is funding the ongoing war in Iraq.
    • The real estate bubble.
    • Minimum credit card payments that are about to double under a new law.
    • The onus of new government regulations that are surely coming in the wake of Katrina.
    • The lack of future visibility of Fed policy.

      And the list goes on and on...."


  • Does the path of maximum frustration dictate that equities follow crude through Red Dye?

  • Jon "Dr. J" Najarian flagged Rambus (RMBS) on Thursday and Hoofy stepped up and tagged it today.

  • "Boo doesn't like it one bit, but the PHLX Housing Sector Index (HGX) broke a spread triple top today at 552, basis the 4x3 chart. This is the second consecutive buy signal for the HGX. But, things aren't so easy for Hoofy in this group either. A shorter-term, 2x3 chart shows a different picture as trendline resistance remains just overhead. Which chart to believe? The context depends on your timeframe, naturally; one of the many reasons we don't give advice here in the Ville. Only you can decide which chart means the most to you. See the two charts here and here, courtesy Dorsey Wright." -- Pepe Depew on today's Buzz

  • "One stock does not make a market! But the recent divergence between Intel (INTC) and the Nasdaq is worth a look. For the first time ever, the mother chip Intel recorded a one month (20 day) low on the same day the SOX index recorded a one month high. This chart shows recent performance for the Nasdaq-100 and the SOX when Intel records a two week low and those indices post a two week high." -- Jason Roney on today's Buzz

  • The volatility sisters are noticeably perky on a slow and slithery session.

  • Our September effort to help Katrina victims continues as Minyans stand up to be counted. Many thanks for the continued support.



    R.P.
position in osx

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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