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Randoms: Levels of Lore


Technical analysis is a better context than catalyst.


I entered today with short side exposure in the financials, S&P puts and some Apple (AAPL) puts. I added to the first two into the initial hot popper but missed doubling down my Apple bet (which was a 'gimme' given it was only up 30 cents in the face of flying pre-market futures). If I had scooped 'em, I would have flipped that incremental exposure into the uber-quick $4 slip as a function of my chosen stylistic approach.

Why did I grab air? I was putting the final touches on my opener and as my brother Jeff Saut likes to say, the human mind can't think of two things at the same time. My first priority is to ye faithful and I can honestly share that P&L has suffered as a result. No regrets or internal frets, however, as my biggest investment is Minyanville and we're all about our community.

Some top-of-the-morning vibes:

  • S's over N's again, as evidenced by the five finger flava in Google (GOOG), Amazon (AMZN), Apple, Baidu (BIDU), Research in Motion (RIMM) and the semis.

  • As past resistance is future support, the NDX 200-day moving average (1380) and the acne breakout (1300) are levels to watch should the drippage continue.

  • Other Levels of Lore? BKX 40 will provide initial resistance for the piggies.

    Click to enlarge

    And, it's a general rule of thumb that the best time to buy a breakout is the retest of the acne level. As such, the "real" battle may well occur into S&P 875.

    Click to enlarge

  • As Minyans know, a lower dollar is a necessary precursor-but no guarantor of-higher asset classes. Keep an eye on DXY 83ish for a breach of that level opens the door to that possibility and through my lens, that's the biggest risk for Boo.

  • The tunage I vibed to last night as I chewed through the many to-do's? Acoustic Neil (times two), some classic CSNY and an old school St. Stephen.

  • It hit the tape earlier that General Motors (GM) will need $2.6 billion more in aid in May. Sorta scary that we hear a number of that size and say "oh, that's it?"

  • Market breadth on this test? Balanced, like Nadia Comaneci in her prime.

  • When I say I'm "trading around" positions from the long side, it means I'm buying dips to sell blips. When operating from the short side, it means I'm selling blips to buy dips. The former applied in late February and March, I was balanced for the better part of April and I've begun operating with the latter lens of late. So you know.

  • And yes, this market warrants trading in between. Let your first sale be your worst sale, be them puts or calls.

  • So, tomorrow I have an early morning appointment with the passport office to reclaim my identity. With a lost driver's license (since replaced), expired passport and a "do you really think I have any idea where they are" social security card and birth certificate, I've literary been a shadow of my former self.

  • History may not always repeat, but as Mark Twain famously said, it often rhymes. As a follow up to last week's question--and yesterday's follow-up-of whether investors should "Sell in May and go Away," we offer the following stat:

    If an investor had started with $10,000 in 1950 and only invested in the favorable six month period up until 2008, they would have profit ted $806,204. On the other hand, if an investor had only invested in the unfavorable six month period they would have made a profit of -$535.

  • Think positive, Minyans, for profitability begins within.


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Positions in AAPL, S&P, financials
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