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Randoms: The Wall of Worry

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Bulls set their sights on the level of lore

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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 Sell in May and Go Away?


Let's see... the U.S. economy fell off a cliff in the first quarter (capping its worst performance in five decades), a potential pandemic is sweeping the world, North Korea is threatening nuclear tests, the Treasury will sell a record $71 billion in long-term debt next week, at least six more large banks need additional capital and societal acrimony abounds.

What to do? Well, if you're the world's largest thermometer, the answer is simple--identify the path of maximum frustration and weed out as many players as possible.

As discussed this morning, I have a laundry list of concerns heading into May, which are balanced against a healthy respect for the potential acne above S&P 875. That was largely why I operated as I did with my S&P puts---trailing the stop to my entry level, which was triggered yesterday afternoon--and it's why I continue to keep my powder dry and eyes open.

Here's what I'm thinking 'bout as we hike up the weekly Hump:

  • "Risk" is my middle name and I love trading almost as much as I love rainbow cookies (true story). As Financial Staying Power is my modus operandi, however, I'm operating through the lens of discipline over conviction and risk management over reward chasing.

  • Think of it this way--there are 10,000 traders standing in a circle shooting at each other. When the dust settles, it'll be a lot easier to feed the women and children.

  • While my instinct is to look for fades (sales) into this uppity jump, a quick sniff of my tea leaves (4:1 positive breadth), lower dollar, traction in the financials) suggests patience may be warranted. As it stands, I am not looking to jump on the upside bandwagon.

  • Red beans in the Green Sea? Pharma, Amazon (AMZN), Research in Motion (RIMM), EMC Corp. (EMC), United Health (UNH) and E*Trade (ETFC), which is off 33% after regulators pressed it to raise capital.

  • If you haven't already, take a free two week peek at any of our excellent subscription products.

  • We can't live in the past--this we know--but we can relive the past at times and in doses. Minyan Intern Jarrod was kind enough to send me the Saturday Night Grateful Dead Garden Party which was one of the more enjoyable shows I've been to (my bathroom break during the front half of He's Gone notwithstanding).

  • Finally, so it's said and so you know, Rock of Ages is the single best show I've ever seen on Broadway. I may be putting the nail in my culture coffin with that one but it was right in my wheelhouse (for a great cause to boot!).

  • Juggling a ton of behind the scenes things as we tie up some Minyan initiatives into May 1st. Jeez, is it really May already? Time waits for no Minyan...

  • As always, I hope this finds you well.


R.P.



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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