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Random Thoughts: Broadcom for a Trade


You can learn a lot just by watching.


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 Answers I Really Wanna Know: Will the S&P Top 1000 By Year-End?

Morning Dew - 8:50 am

Turnaround Tuesday is upon us and it's a begrudging one at that. I'm operating at about 65% capacity, Pepe is on fumes, if that, and President Fish looks how I feel. Yeah, whatever this thing is--you're not a bug, are you gnat?--it's kicking our arse! Hey, this is the bigs and we play in pain, so with that in mind I won't complain (that much).

Some top-liners as I wish it were that easy:

  • First thing I noticed this morning when the pre-market futes were gigglin' green? The master beta stocks--Amazon (AMZN), Google (GOOG), Research in Motion (RIMM), Apple (AAPL)--were down 2-3% each. If that doesn't smell like supply, I'm not sure what does.

  • There's some stealth (bullish) reverse dandruff in the S&P, which makes 900 an important support zone. I think we test it and the reaction to that zone will speak volumes as to whether we've indeed seen a shift in market psychology.

  • Anything resembling a flattish performance today given the news in FedEx (FDX), Texas Instruments (TXN) and Broadcom (BRCM) would be considered a win for the Matador Crowd considering the 21% trot since we sacrificed the turkeys. And yes, some give back--controlled give back--would be healthy at this point.

  • I can't shake a four-figure S&P--at a point--before the calendar flips. I'm not betting big or carrying that much overnight exposure (hit it, quit it, sit it) but so you know and if ya care.

  • And there I thought I would never buy another American car.

  • How many years did we highlight the risks of "financials in drag" such as General Motors (GM), General Electric (GE) and Ford (F)? While the automakers will seemingly get bailed out, I would avoid GE like the plague. But that's just me.

  • This week's sign that the Apocalypse is upon us? I'm actually beginning to enjoy the taste of these strawberry flavored chewable Zicams. Yikes.

  • If "it" all fell to pieces tomorrow, would you have any regrets on how you've lived your life?

  • Have a good day Minyans--and remember, the purpose of the journey is the journey itself.

Gate Sniffage! - 9:51 am

  • I just said to T-Woo, "Hey Woo, if Broadcom (BRCM) and Texas Instruments (TXN) ain't going down on that news, they're going up." I then scooped some BRCM (under $15.50) for a trade and slapped on fitty-cent trailing stop after it rallied 0.70 to ensure a profitable trade. Not advice, just sharing the process, as you can always learn a lot just by watching.

  • Woo Woo!

  • The first bounce off S&P 900 should be the intuitive bounce.

  • NYSE internals are 2:1 negative but I'll remind Minyans that this "tell" doesn't kick in until after the first half hour of trading.

  • A producer just called and asked if I could go on TV but they wanted to "tag" me as an economist at the WSJ. "People don't know what Minyanville is," he said as I stared at our Emmy and smiled. They will, Mon Frere, they will.

  • Remember that Dryships (DRYS) I slapped on as a hat size and "mentally marked it to zero"? I'm gonna toss a trailing stop on that puppy as well after it doubled (almost tripled) this week. It's small potatoes but the mechanics of the swing are always more important than the results of the at-bat.

  • Lemme hop Yo. I'll be back.

Now it's realer than real deal Holyfield... - 10:45 am

  • I've been talking to Hoofy and Boo for eight years. Now, I'm really talking to Hoofy and Boo!

  • Better lucky than smart? Both Broadcom (BRCM) and Dryships (DRYS) are real-time examples of how trailing stops remove emotion. Naturally, as I speak about it, they'll likely reverse and I'll get stopped out but there is an easy trade each day, the onus is on us to find it.

  • My, how the mighty have fallen. $10 million used to be a rounding error on Wall Street and now it's the whole kit and kaboodle (whatever that means). Don't get me wrong--there needs to be culpability--but there is a middle ground that rewards those who do the right thing and punishes those who have not.

  • But of course, Minyans have know this for a mighty long time.

  • This market reminds me of my trips to Vegas. Slow and steady--hitting for average--is entirely more profitable than swinging for the fences.

  • If I told you this summer that Hoofy would be psyched to see S&P 9-11, you would have thought I was nuttier than Austin Powers' coffee. What a year. Oofa.

  • Gangsta music gets a bad rap. Get it? Gangsta music. Rap. Never mind.


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