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Random Thoughts: Biding Time Into the Fed

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FOMC Wednesday is nearing, are you positioned correctly?

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  • Get down, get down? You would think so given the action in commodity land but suh-prise, suh-prise, suh-prise, Gomer, equities continue to sniff out a bid. As I've got more positions than a nymphomaniac at a karma sutra convention, lemme jump to the meat and potatoes.

  • As discussed yesterday, I believe that the oil drillers and gold miners have double jeopardy. And to be sure, they've got room to swoon. With that said, respected, noted and absorbed, I peeled out of my downside driller exposure with an eye towards fewer positions and reduced risk (both sides) into the FOMC.

  • The gamma goblin? Yeah, she swings both ways. Rather than build positions (there are a few different ways to trade option volatility), I reduced the size of my Merrill (MER) position into weakness into weakness and will leg my way through Microsoft (MSFT) (with risk defined in a few ways).

  • N's over S's, lest you're living without electricity. Pay particular attention to big beta as Baidu (BIDU), Apple (AAPL), Research in Motion (RIMM) (all day) and others are showing noice relative strength.

  • I don't know about you, but there should be some sorta rule regarding just how long granola is allowed to sit in parfait before it is sold to the public.

  • Tuesdays are my killer (on deadline) but tomorrow is shaping up to be a monster in its own right. I'll start with an 8:30 MRI on my right knee and continue with a high noon cross town meld, 12:30 nibble with an adviser, 2:15 dance with Elmer, 3:30 conference call, 5:00 TV thang , 6:00 management mix and 8:00 business dinner. And then? I'm chugging Calgon in a big bad way.

  • Minyan Marc offers: "ISE equity put/call is at 205. The crowd is buying straight long calls as if the coil will break up. Looks like COMP 2425 and VIX 20 are good spots to leave Pamplona bulls alone and head for the hills. Sell in May and go away will actually mean something this year?"

  • Lest you believe the markets are free, word comes down the pipe that further "alternative approaches" to the crunch may be fast-tracked. I'm not rooting for a Debbie Downer--that does none of us any good--I'm simply offering that it's difficult to follow the markets when the rules of engagement continue to shift.


R.P.

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Position in MER, MSFT
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