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Randoms: Edging Over the 2009 Hump

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Motion and movement as we wave goodbye and say hello.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community.


De Nile, Part Deux! - 9:50 am


The good news is that discipline dictated peeling off some Amazon (AMZN) puts into yesterday's downside slider (which I did). The bad news is that it was only a token sale.

Either way, I've "doubled down" on that Kindle Clown (added AMZN puts) into $85 with every expectation of being stopped out on a pop through to the upside.

Why? Very defined risk-reward, which is always a trader's best friend.


Gate Sniffage! - 10:30 am

  • Dylan's Candy Shop? Check out the potentially negative dandruff in Ralph Lauren (RL), which is seemingly offering Boo some nice and tight defined risk at $55.

  • When Eliot Spitzer made a name for himself (the first time), he was riding roughshod over Wall Street. "The Spitzer Effect" effectively meant that gamesmanship (portfolio marking) occured in the days prior to the last day of the quarter (rather than gunning 'em to the finish line). I'm not sure if that's still in play as regulators have bigger fish to fry.

  • "Trading in between" is directionally independent and prudent regardless if you're buying dips to sell blips or vice-versa (as I'm doing in Amazon). Along those lines, I'll pick a bit as this four-letter freak edges back to the flat line (vs. this morning's fade (sale) into the hot popper). Just sharing my process with hopes it adds to yours.

  • A quick sniff of our tea leaves finds some supply on the back of a consumer self-esteem situation. Breadth on the big board is 2:1 negative the financials are fluxy as the street digests the American International Group (AIG) admission (note that super tell Bank America (BAC) remains relatively sticky) and big beta, by and large, holds it's bid (after yesterday's under-performance).

  • Through a macro lens, the dollar is inch-worming higher and that continues to warrant a mention for obvious reasons (obvious to Minyans, at least). In terms of the long-term technical construct, we could be in the midst of tracing out a pennant formation that will eventually tell the tale and set the sail for asset classes of all shapes and sizes.


Do You Wanna Play Tetherball? - 12:15 pm

I hear ya Napoleon, but given today's tot has more moves than a high school talent show, we should prolly focus on the task at hand. In the interest of finding our way to the third quarter fray, I wanted to share this system of self-defense that I developed over two seasons of fighting in the octogon. It's called Rex Kwon Do and it includes the following observations:

I hear ya , but given has more moves than a , we should prolly focus on the task at hand. In the interest of finding our way to the third quarter fray, I wanted to share this system of self-defense that I developed over two seasons of fighting in the octogon. It's called and it includes the following observations:
  • While the gritty action in select beta (Amazon, Research in Motion (RIMM), Apple (AAPL)) may be a function of fund managers "defending their marks," it feels like the underlying bid in the bank (Wells Fargo (WFC), Citi (C), Bank of America) is optimism ahead of "the best quarter since the crisis began."

  • I'm not currently involved in the financials but after trading them nearly 20 years, I'll reincforce what Minyan Peter recently offered. "Earnings are the past and balance sheets are the future." Be prepared for these institutions to print huge numbers...but be careful of any attendant blind ambition.

  • If you think it's slow now, just wait until quarter-end is over and the holiday inches closer. Thin ranks imply less liquidity that often leads to increased volatility (think it through, it makes intuitive sense). As such, this is your friendly Minyanville reminder to size your risk accordingly to avoid any unwanted fireworks in your portfolio.

  • Just as Amazon didn't rally with the tape yesterday (which was the catalyst for me doing some chart work and identifying an advantageous risk-reward), it doesn't "come in" with the futures today (implying latent demand).

  • Where you stand is a function of where you sit but with my coin, I covered my "double down" (added into $85) as the stock filled the opening gap and I'm playing with the leaves (I'm not married to anything...or anyone, for that matter).

  • The irony of the current socioeconomic climate is the natural tendacy of folks to be introverted despite the digital age of social networks. The "have's" want to keep a low profile, the "have not's" do less as a function of need and relationships have become incrementally frictionous.

  • In many ways, that dynamic encapsulates our "globalization vs. isolationism" discussion and leads to the same conclusion: the onus is on us to remain engaged, lucid and open to the notion of community. The odds of thriving and surviving--individiually or as a world economy--will greatly increase in kind.

  • While some folks still don't "get" Minyanville, those that do really get it. The peeps who didn't see it used to bum me out--as did other media platforms that lifted our concepts or content and spun it as their own--but not anymore. The simple truth is that the longer this continues--and it's got a ways to go--the more utility a trusted choice for a financial voice will become.

  • Give that next person the benefit of the doubt and try to Do Something Joel daily. As society is a simply a sum of the parts, you never know how far that positive pebble will ripple in the pond of life. It can't hurt, right?

  • As always, I hope this finds you well as we tick-tock over our 2009 Hump.


Stems and Seeds! - 2:15 pm

The first half of 2009 has been an apple cart that would make Sir Isaac Newton spin with confusion. As we say goodbye to the twists and prepare ourselves for the turns, the following vibes are top of mind as we edge over the Hump of the calender year:

  • I covered my Amazon puts as the four-letter freak dipped into Red Dye. Those with an appetite for risk can continue to use $85 as the fish or cut bait level. Given my "hit it to quit it" stylistic approach, I'm content to make it to take it after "doubling down" near the opening.

  • While our mainstay tea leaves (dollar, breadth, financials) continue to warrant caution, the action in select beta (Apple, Research in Motion) and financials (Bank of America, Citigroup, Wells Fargo (WFC)) has left the window open for Snapper. See both sides, Minyans, particularly with quarter-end two short hours away.

  • The context of time is an incredibly important qualifier for any financial discussion. We've discussed my big picture bent at length and most of the schnitzels discussed in the Buzz are simply trying to squirrel acorns along the way. Nutty, eh?

  • It's human nature to "hope" when a position moves against you and "ride it" when it goes your way. That's why it's so very important to have a game plan before you step on the playing field sans emotion.

  • So it's said and for what it's worth, the anecdotal economic evidence from Minyan front lines around the world continue to paint a bleaker picture than what many in the mainstream have offered up. I know news is always worst at the bottom but heck, we're now a long way from the bottom.

  • Deep breath (me included) as we take our journey one step at a time. As always, I hope this finds you well.

    R.P.
position in AMZN

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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