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Random Thoughts: Fists and Docs!


Will financials devalue as money rotates to other sectors?


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Was That A Short-Term Low? and The Jedi Mind Trick.

Gate Sniffage: Fists and Docs! - 10:00 am

  • Somebody call Grauman's Chinese Theater! Seriously, Bonnie Tyler deserves a footprint.

  • The standout action today? Bank America (BAC). Minyans shouldn't be shocked that they're issuing a secondary and cutting their dividend.

  • The trick to that trade--nay, the entire market--is whether the financials will be allowed to devalue (as they should) while money rotates into other sectors. One of the oldest adages in the 'Ville is "as goes the piggies, so goes the poke" and I'll remind ye faithful of that regardless of my own personal posture.

  • Other elements of note include big beta. I noticed these names were red when the futes were (initially) lower pre-market and that's usually a sign of supply. Google (GOOG), Research in Motion (RIMM), Apple (AAPL), Baidu (BIDU) and Amazon (AMZN) are all getting spanked like newbie editor Matt Theal on a Friday night.

  • Be careful for what you wish? Yeah, I hear ya trading Gods. Still, I've used this pullback to add exposure to some equities in the energy space.

  • How sure am I with this? Sure enough to try but disciplined enough to set a stop under yesterday's low in the S&P. This probe, in my view, is healthy and necessary IF the market is to rally.

  • I'm slipping that other leg back in the bull costume--makes 50% conviction on the long side. Giddy up.

Oh That Smell! Can't You Smell That Smell? - 10:49 am

Whiskey brand new cars, oak tree you're in my way.

I'll tell you, if there's one thing I've learned in my seventeen years on the Street, it's to stay humble or the market will do it for you. As such, lemme make one thing perfectly clear (in my best Nixon voice)--I don't know which way we'll go, I'm simply channeling my inner monologue in a stream of consciousness (and to be honest, it's somewhat surreal). This is what I see--this is what I feel--this is what I'm doing--but in no way, should it ever be construed as advice (after all, I've been on the wrong end of my fair share of spankings).

With that said, let's get down for some Honky Tonk:

  • Tomorrow is promised to nobody and this rally isn't a given, particularly given the Code Red currently being administered to Bank America (BAC) (which, of course, means Mother Merrill (MER) as well).

  • Two parliamentary points of procedure. First, a Fletch style probe was necessary (spleens and fists included) IF (big if) Hoofy was gonna head higher.

  • Second, market breadth was balanced during the heat of the downside meat. That's a subtle--but potentially important--DNA shift, if only for the moment.

  • Yesterday, during the afternoon Truman Show, the blame game was good and thick.
  • Rather than voice my personal views on culpability, however, I opted to look forward. There will be plenty of time to pinch and lynch but profitability resides in the ride ahead.

  • Newbie Minyans maybe wondering "Who the hell is this guy and what's with those silly costumes?" Suffice to say that I wanted to toss out a smile to the Old School Minyans who've been vibing since the turn of the century. That doesn't mean it'll work, mind you, but it'll always be honest.

  • Wow, has it really only been an hour? Is it really only Tuesday? Is it already October? Do you see Baidu (BIDU) as the one master beta name holding it's own?

  • In the interest of "seeing both sides," I will say this. If Hoofy can't get his groove on in a meaningful way by the early afternoon, the potential exists for the process of price discovery to continue regardless of the perceived attractiveness of price.

  • Writing six to seven columns per day while managing risk, building a company, doing live tube, being on deadline (4pm!), catching four hours per night, readying for Festivus and--oh yeah--trying to be a human being rather than a human doing, is a tough task indeed.

  • But it could be worse. We could be ordinary.

  • As always, I hope this finds you well.


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