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Freaky Friday Potpourri: Here We Are, 5% From All-Time Highs


If you find yourself getting bullish when the screens are green and bearish when the spread is red, take a deep breath and a step back.

  • Be wary of the August Friday summer slither!

  • I get that Bank America-Countrywide was the "big story" yesterday but why wasn't there more mainstream media mention that the latter matter is up a mere twenty cents?

  • Man, it's so slow out there you can almost hear a bonus drop.

  • Are you supposed to buy Rosh Hashanah and sell Yom Kippur or the other way around? I can never remember.

  • If you find yourself getting bullish when the screens are green and bearish when the spread is red, take a deep breath and a step back. Pressing and guessing is no way to go through life, son.

  • I don't profess to understand the nuances of the commercial paper market but I have made sure that my money market fund has no hidden shockers (commercial paper) in it. I took a 60 bip haircut to make it happen but I'll sleep better now that I have.

  • See the relative traction in Bear Stearns yesterday, which was the first broker to smoke.

  • The Bank of China, which surprised investors by disclosing $9.7 billion exposure to U.S. sub-prime securities, took a 6.4% overnight haircut and will officially join the growing list of non-contained pain.

  • Yet here we are, 5% away from all-time highs as folks continue to freak out about how "bad" it is. Can you imagine the sentiment if the mainstay averages were actually down for the year?

  • Hot Dog, as we used to call it on the desk, or Home Depot, as it's known across the land, slashed the price on it's contractor-supply unit sale by $1.2 billion. Still, the private equity players, as it stands, have yet to place that bet.

  • Answers I Really Wanna Know…

    • Are you watching the near-term dual levels at S&P 1456 (200-day) and the BKX pennant (there now)?

    • Given how light the volume was yesterday, how thin will the spin be today?

    • Are you positioned in a way that'll allow you to "sell up" and "buy down"?

    • Whatever happened to Buffett's supposed accumulation of the homies?

    • Why do I cringe every time I hear the word "hope" mentioned in financial media?

    • Do you work your buns off all week and spend the weekend getting ready for more work?

    • Did you see that BNP Paribas will begin "marking-to-market" the three funds it froze (on August 7) next week?

    • What does that mean for the plethora of counter-parties involved?

    • If you were at the track, would you bet on an 800-lb gorilla or several large elephants?

  • The Upcoming Bank Swank

    Dear Todd,

    I am just an "individual investor". Met you at MM1 in Crested Butte. When you say the piggies may be coiling for a big move... would that be north or south (I'm guessing south)?

    In your opinion, what is the TA Bible (so maybe I don't have to ask any other dumb questions).

    Minyan Jim

    Minyan Jim,

    Of course I remember you---a fine gentleman you are. And heck, there were only 80ish of us out there for the first mountain shindig. My, how time has flown as thy Minyans have grown.

    Two quick thoughts.

    One, pennants typically "break" to the direction of the preceding trend which, believe it or not, in this case is up.

    On the flip side, we've got huge resistance sitting right above at BKX 111.50, which has been a stone wall (both ways) for quite some time.

    That's why I was a bit opaque on the direction--there are two sides to this, and every, trade--but I wanted to make sure it was on your radar. For when the flag waves, it snaps hard.

    I am, so you know, leaning short and using that upside level as a stop. Doesn't make it right but it's how I'm rolling right now.


  • Where Art Thou, Golden Child?

    You've been very quiet on Golden Star (GSS) lately. Do you still own it and with it off approximately 40% from the yearly high, are you accumulating here?

    Minyan Craig

    Minyan Craig,

    Hey there--glad you asked as I've indeed been quiet in the name. As old school Minyans know, I've been "involved" with this name for a long time, trading around a core between $2 and change to (close to) $5.

    In the middle of July, when my antennae started vibing on "something" being amiss on the sub-prime side, I pared everything but the kitchen sink--including cores in GSS and Sun Microsystems (SUNW)--although, as discussed, I kept a bit of both.

    Since then, I "traded" some from the long side but was stopped out below $3.45 for a small loss. To be completely honest, I've been focusing more of my attention on trading the big picture as, well, it's a much bigger picture.

    Again, I've got a small position but not what it once was. Hope this helps--I always try to keep Minyans up to snuff on the trading stuff but, as the 'Ville is real-time and chock full of information, sometimes tidbits of information slip through the crackage.


  • Curiouser and Curiouser!

    For the second straight session yesterday, a mysterious bid appeared to lift the bovine gift into the last hour.

    Now, it could be coming from alotta places---
    , maybe. Traders who are short gamma, perhaps.

    Or maybe it's Hank's secret stash, as he likely knows how tight traders are gripping the handlebars and how thin the ranks currently are. No shot you say? Way , I'll counter. He told us on Tuesday that he's "re-energizing the working group on financial markets" and while I'm not quite sure what that means, it could mean alotta things.

    There's no way to know, for sure, and even if we did, I'm not sure that would make Boo feel any better. I mean, there's nothing more dangerous that a cornered herd of elephants, right? Except, maybe, a pissed off 800-lb gorilla. Honestly, they both scare me, which is why I'm defining my risk (under BKX 111.50) and respecting both sides of the nutty ride.

  • May peace be with you, Minyans, and keep your grip loose as we trail into the weekend and eyeball the important stuff.

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