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Randoms: The Tug or War?


Stocks try to rebound as geopolitical risk percolates.


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 Looming Shoes or Hiking Boots?

Paging Mrs. Renee Bauer! Paging Mrs. Renee Bauer! - 9:20 am

  • Following big moves, there's typically a probe in the same direction (in this case lower) and it'll be important to watch the tenor of our tells when that occurs.

  • My inclination, so it's said, is to buy dips for the Turnaround Tuesday trade, particularly if we see the S&P 768 gap fillage. Given how light and tight I am--position, not weight, wise--I'm gonna read the leaves and position in kind.

  • Loose grips on the handlebars makes for a much smoother ride down this bumpy road.

  • If Morgan Stanley (MS) can shake off the negative forecast by Señor Mack, it could be a tell that the piggies are ripe for an upside poke into Thursday's mark-to-market vote.

  • And as go the piggies, so goes the poke.

  • Any and all risk will be defined. It's sorta like trading Jack Bauer--he's strong and willful but could give in to the toxins in his body at any time.

  • Bromance!

  • Hit 'em hard, Minyans, and remember that profitability begins within.

Gate Sniffage - 10:14 am

  • One of the mainstay Minyanville mantras is that the friction between opinions is where true education resides. In that regard, the residual grist found in the dialogue between Mr. Practical and Minyan Peter is a must read for all ye faithful.

  • Mother? Not Mother! Oh, that Mother. Morgan Stanley (MS) is fighting the good fight, trying to lead by example, attempting to again prove that the reaction to news is more important than the news itself. MS $20 is the big level for this big dog--the support that must hold--but thus far, the brave face is commendable.

  • Red beans? Retail and the homies, homie. Green beans? Beta (and N's) in general and the financials.

  • Please note that I dipped a wick into the financials, pure trade with defined risk and an eye towards 1) the purge that occurred to get the piggies off quarter-end sheets and 2) Thursday's mark-to-market vote, which could be a game changer for a trade.

  • I am, of course, OUT on Friday, flying to Boca for several high level business melds. This is the first of four straight travel weeks, none of which are "vacations," and I plant that seed because I'm sorely in need of an inside-out reboot.

  • Opportunity cost is the other side of discipline, but that works both ways. Case in point was my puntage of Amazon (AMZN) calls (+3%) and my cover of Goldman (GS) (+3%). Both made a coupla shekels but neither made the curfew call on the close.

  • Lemme get this to you as I flip lids and eye my laundry list. As always, I hope this finds you with a jingle on your puss and a smile in your jeans, or something like that.

The Tug or War? - 10:59 am

  • Y'all see that North Korea threatened war against Japan if they try to intercept the imminent missile launch as US destroyers reposition in the region?

  • Forget O-Dog, America's worst nightmare may well be housing. Check out the 12% gut check in Lennar (LEN) and the carnage in the surrounding neighborhoods (Centex (CTX), Ryland (RYL), KBHomes (KBH)).

  • Now look at this chart of the HGX (housing index) and note the very defined, uber-important double bottom (that's still 35% below current levels).

  • In a perfect world, I've got hair inflation and weight deflation.

  • Also in that world, entry points on trades catch an immediate kiss from the Gods that allows us to slap trailing stops such that our risk is our cost basis.

  • Boo continues to eye Apple (AAPL) $115 as a defined risk short-side try. He also asked me how Amazon (AMZN) trades so dry given the Art Carnage in the other retailers today.

  • Hoofy, for his part, just walked by and whispered "Premature evacuation!" for dumping my Amazon calls yesterday. I told him that I learned a long time ago never to bum about booking a profit, however small.

  • Gotta turn my attention to my MarketWatch vibe (assume the position!) and rumor has it that Professor Prieur du Plessis might make a cameo from Cape Town. As such, lemme shovel more coal in the oven. Engine room, more steam!


In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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