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Random Thoughts


Discipline over conviction, Minyans, and leave emotions for weddings and funerals.

  • Helter Smelter! The metals are listening to some serious chin music as gold gets jacked for $17 and silver slips 3%. We noted the potential acne above XAU 150 yesterday but that technical catalyst has morphed moot for the time being.

  • I'm told that alotta dealers are short September paper (options) as conventional wisdom (last week) was (and is) that volatility would arrive in October and November. Something to consider as the potential for "negative gamma" manifests in front of next Friday's expiration (a recipe of whippage).

  • As I wrote this morning, my sense is that September is gonna be a humdinga with regards to volatility. Whether or not that's captured before next Friday (expiration) remains to be seen.

  • See the greenback, the grabby, grabby greenback (+50 bips). Asset class deflation....or dollar devaluation.

  • I'm not answering the phone. YOU answer the phone!

  • Morning breadth is 3:1 negative on the big board, much like it was during yesterday's Hump Day grump.

  • "Kevin asked me to look for days when the high of the current day is less than the prior day's low since the SP futures opened below yesterday's low and have not yet gone above it. If we manage to not cross yesterday's low at any time today then it would be rather rare. I just ran it for SPY to keep it simple. To happen once isn't that unusual: 96 times with forward occurrence mixed. But to occur on two consecutive days (as would be the case if today's high is less than yesterday's low) is extremely rare. That has happened just 3 times. June 1994, Dec. 1995, and Mar. 2001. The SPY was lower 3,5,10, and 20 days later 2 of the 3 times." Jason Roney on today's Buzz.

  • Note the semicaps (AMAT, KLAC, NVLS) as they continue to trade dry. IF Snapper arrives, I would expect these names to lead (the SOX is now positive on the day).

  • Congrats to the Minyanville Quackers as we topped the six-handle in our efforts to help the Special Olympics!

  • The China Post reports with forex reserves rising dangerously close to the awesome one-trillion-dollar mark, China has issued an unusually high-level warning that they should not be permitted to grow much further. The forex reserves, already the biggest in the world, hit 954.5 billion dollars at the end of July, up by nearly a third from one year earlier.

  • Keep half an eye on Europe, as the DAX, CAC and FTSE all dangle a percent lower.

  • What have I done today? Peeled out of some Russell puts. Why? As my other gamma "kicks in," I'm content to take a few shekels off the table and rotate my risk.

  • How high is high in housing? A picture is worth 1000 foreclosures.

  • Please circle Friday, December 1st as a preliminary date for MIM-CCA (Minyans in Manhattan). We're getting close to unleashing the hounds as we've gotten winks from Santoli, Saut, Galbraith, Shobin, Pomboy, Weldon, Sedacca, Succo and Reamer for a major macro 2007 preview. And, as balance is the fabric of the 'Ville, we'll have a heckuva fun humdinga at night!

  • The only suspense I'm gonna have this season is whether my Raiders or Syracuse will have a worse record.

  • As John so eloquently describes, to understand where we are, we must appreciate how we got here.

  • The most important sector today? Not the homies, which was down 2% but has since halved its gains. Not the metals, although that has ramifications to commodities and, by extension, equities. I would argue that it's the financials, which have been a hiding spot for alotta funds. IF--and that's a big if--this complex comes for sale, it'll be a tough nut for the bovine strut.

  • Vols, for their part, are ticking a bit higher, with the VXO up 5% (Mazel Tov!) as fear starts to creep back into the marketplace. Remember---they were 40% higher during the June swoon so we've got plenty of room to schvitz, should the schvitz happen to hit the fan.

  • Discipline over conviction, Minyans, and leave emotions for weddings and funerals.

  • R.P.
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