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Random Thoughts: Jump, Test, Run, Rest


Watch for patterns in the market action.


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. See also Was That the Retest?

On your mark... - 9:26 am

A quick lil' ditty before the freak flies her flag today...

The action on the opening will be nutty as a function of 1) massive news flow 2) expiration and 3) emotion (fear and greed).

Best guess from my perch is that we'll see a press lower (watch the banks), followed by a shot higher and then the true tenor will emerge.

Jump, press, run, rest? Quite possibly...

Gate Sniffage! - 9:42 am

  • Red Beans in the Green Sea? Sears (SHLD), Apple (AAPL), Amazon (AMZN), Hewlett-Packard (HPQ), Mastercard (MA), Johnny John (JNJ) and Visa (V).

  • Jump, test, run, rest.

  • If JP Morgan (JPM) is only up a dime with the futures up 15 handles, it could turn on a Dimon.

  • Anyone wanna bet a buck (our standard wager) that Research in Motion (RIMM) pins fitty?

  • I can't shake Alanis Morisette today. It's crazy, in a Canadian way.

  • Ladies and gentlemen, Citigroup (C) spokesman Joe Jackson.

  • Oops, there goes JP Morgan. I need more hands.

  • See ya January index options, which expired on the opening. Keep your eyes open for pin risk this afternoon, or open interest (in a particular strike) that's outsized relative to average daily volume.

  • Lemme hop--I'll be back. Let's hit it today, eh?

I Spy! - 10:35 am

  • Funny thing is, when I offered on television last spring that many banks would eventually be nationalized, the host literally laughed in my face.

  • We got the jump. Here's the test. And then the run before the rest.

  • Market breadth? 3:1 positive, Yo. That's bullish, although it would be wise to remember that breadth was 8:1 negative yesterday... until it wasn't.

  • What have I done today? Sold some USO into the opening pop (discipline) and nibbled on some SSO into this drop. Just trading, and doing so with great humility.

  • Apple (AAPL). $80. See it. Please.

  • Good traders know how to make money, great traders know how to take a loss. I offer that vibe as I spy McClatchy (MNI) at 79 cents, New York Times (NYT) at $6ish and Gannett (GCI) at $7.50.

  • It's Freaky, it's Friday and I'm feeling Frisky! What to do? Cheesesteaks for lunch, naturally. Because we can!

Quote of the Day - 10:55 am

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, on of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and vote of majority, but a government by the opinion and duress of a small group of dominant men."

President Woodrow Wilson, regretting signing into law the Federal Reserve Act

Lower Highs and Lower Lows - 11:15 am

Note the pattern of lower highs and lower lows in the S&P today. When and if this sequence breaks to the upside, we'll likely see the "run" in our 'jump, test, run, rest' scenario. Also note that, as it stands, NYSE internals remain skewed 2:1 positive.

Click to enlarge

I've gotta hop into a midday meld, Minyans, so you know and FYI. I'll be back as quickly as critterly possible.



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