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Random Thoughts: The Lost Cause of the Rally


Bond insurers are struggling on the day.


Editor's note: The following content was posted today by Toddo in real time and is being republished here for the benefit of Minyans everywhere.

I'm learning to fly, but I ain't got wings... - 11:45 am

I return to the hallowed halls of MVHQ with a Vitamin Water in one hand and a sponge in the other. I'm tellin' ya, they really cake on the make-up on before the red light shines bright.

That explains the foundation on my collar...but the jury's still out on why President Fish has eyeliner and lipstick on. Some first blush thoughts, no pun intended:

  • The Buzz on the street is that this is the Warren Buffett rally. Debunk dat, as MBIA (MBI) and Ambac (ABK) are both lower for the session.

  • So why the rip? Part expiration, part foreclosure moratorium and dare I say, part hope that the worst is behind us.

  • Field position? Glad you asked. We have "room" to S&P 1405 (first resistance) and 1450 (lower highs). That, coupled with the potential "higher low" for the banks is the centerpiece of Hoofy's upside mantra.

  • S's over N's, as we mused out of the gate, as beta takes a breather and the industrials take the baton. There are flies in this try, from Apple (AAPL) to Goldman (GS) to Applied Materials (AMAT) and more, but breadth is 3:1 positive and defined risk is desired.

  • I'm not smarting that I'm light, tight and full of powder. I'm Winky Wright, not George Foreman--and definitely not Charlie Murphy--and wanna pick spots and find stocks.

  • Just because the market rallied doesn't mean there isn't risk. Quite the contrary, stocks have more risk at higher levels (and more reward in the drink). Somehow, somewhere, at some point, folks seemed to confuse that matter.

  • I mean, honestly, what would Tom Petty do in a tape like this?

Bonnie and Slide? - 12:19 pm

In honor of Bonnie Tyler, I just tossed a question in the general direction of Pepe.

"Dude, can they turn 'em here? Look at Goldman (GS). Look at Apple (AAPL). Look at the volume. And... it's Tuesday!"

His take was that they've got some further lift and, given expiration and the breadth, he very well may be right. For my part, I've been scanning the financials for potential short entries but haven't pulled any triggers. They don't trade right to me but hey, I've been wrong before.

I have, so you know, quietly slipped out the back door in Blackstone (BX). It's a wash, for all intents and purposes, and quite possibly premature evacuation. If I'm sniffing around Red Dye, however, paring long exposure is a natural extension of that mindset.

I offer these thoughts with the tape near the daily highs and conscious that two-sided risk continues to lurk. Gun to head, I'm not buying this rally, figuratively or literally, so I wanted to toss out my honest insight.

As always, I hope this finds you well.

Answers I Really Wanna Know... - 1:37 pm


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