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Random Thoughts: Tug-O-War Galore!


Turnaround Tuesday arrives for the tape.

  • Following outsized moves, the tape typically probes that direction the following session. Given the proximity of S&P 950 and the nonsensical notion of Turnaround Tuesday, I don't expect the demand to last long.

  • I've of course been wrong before-plenty and often-but the "retest" thesis (also known as the "W" formation continues to crystallize in my crowded keppe.

  • If the dollar meaningfully debases, all (downside) bets are off. I will again caution, however-because it's very important-that a grubby greenback is necessary precursor--but no guarantor of--higher asset classes.

  • Note the dollar is down today-can you imagine the action if it actually rallied?

  • While I sometimes dabble in ultra-ETF's as trading vehicles, I'll again jump up and scream that THEY'RE NOT INVESTMENT VEHICLES! Please heed that warning as I would hate to see ye faithful learn that lesson the hard way.

  • I'm long Jo, short Blair on a pairs trade.

  • As discussed yesterday on the Buzz, I added smallish downside exposure (initial entries were S&P 940 and Amazon (AMZN) $81, although both were 'traded around') and I carried that exposure overnight. The risk today, I suppose, is a rotation out of S's (banks) into N's (tech) but we'll jump that bridge when we get to it.

  • We're turning up the dial on the Minyanville Underground Railroad, including "sneak peak first looks" at each chapter of the upcoming Memoirs. If you're good at what you do and better at who you are, climb aboard The Critter Express!

  • The following Buzz took place between 10:00 AM and 11:00 AM...

    Spike Jones!
    10:12 AM

    On the heels of the better than expected pending home sales, the S&P spiked to the (perhaps overly watched) S&P 950 level. While there is a LOT of trading left in the session, it's worth noting that-thus far-the financials continue to dabble in Red Dye. IF (big if) that continues to continue, it could spell slippage as we edge down the Turnaround Tuesday path.

    Please know I added SPY puts directly at S&P 950 with a tight leash (should the piggies reverse course).

    Sometimes right, sometimes wrong but always honest.

  • Some of the sharper tools in the credit shack inform me that S&P 950ish isn't just an equity level of lore, it's a juncture that bears are keying on for debt bets.

  • Corporate spreads are indicating the worst of the credit crisis has passed. Be that as it may, I still sense an equity retest (at the very least) much like we saw in 2003.

  • What did I learn in 2003 (when I incorrectly believed S&P 775 wouldn't hold the triple bottom test)? Risk definition and the mechanics of the swing are paramount to trading longevity. Nobody is smarter than the market which is why discipline is key. Stay humble or the market will do it for you.

  • I don't know about you but I read every word Mr. Practical writes (twice).

  • Hands over eyes and seeing both sides, we've long offered that debt destruction is the only solution for what truly ails us. General Motors (GRM) and Chrysler, while painful and unfortunate for employees and investors, was an incremental step in that direction.

  • Given the swine flu is no longer on anyone's radar, what will the global reaction be if it's "upgraded' to Phase 6 (the top pandemic alert), as suggested today by a top WHO official?

  • Tuesday's are fun days in the 'Ville. In addition to the weekly syndicated vibe, fresh Murmurs for The Railroad and the regular trading and content course load, I've got that 3pm ENT appointment for my perforated ear drum (that I wanna move up as I'm in a world of pain). Not crying, just communicating as I'll be outie from 2:30 on.

  • With the tape slippin' back to the flat line, active trading types can slap on trailing stops or take partial gains (there are no blanket rules, just what fits your risk profile and time horizon). As my brother in arms Jeff Saut likes to say, where you stand is a function of where you sit.

  • Mother? NOT MOTHER!

  • As always, I hope this finds you well.


Positions in AMZN, SPX
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