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Random Thoughts


Don't waste a day, Minyans--tomorrow is promised to nobody.


Holy Cow there's a lot going on! I stepped away from my trainer this morning to strap myself to my turret and I've been hat juggling ever since. Trading, writing, trading, writing-is it any wonder why I'm A.D.D.?

And do A.D.D. folks make for better traders or does trading make you A.D.D? Now that's an answer I'd really like to know!

In the vein of sharing the thoughts flickering behind my eyes, I'm gonna repost my morning Buzzes in the sequence that they occurred.

I do this for two reasons-first, because I strive for that whole "shared learning" thang and two, well, time management is trading at a premium today. So, without further adieu:

  • Gate Sniffage! (9:47)

    • Holy Cow there's a lot going on! The first thrust higher will most certainly be met with a probe lower--it's par for the course after a nosty day. Watch the breadth, banks and beta for relative action versus the futures.

    • Hey Scoop! Lest you jumped home on the bell yesterday, we saw a gorilla scoop $1 bln worth of S&P at 4:00 EST on the nose.

    • Note the relative lethargy in the metals as Mr. T leans on the yella fella. What am I talking about? Check it out when you get a chance--it's the critters at their finest!

    • Stevie Cohen is checking bids? Uh-oh. What Sam Zell was to real estate and Babe Ruth was to baseball, this dude is to trading.

    • I thought I sold another sliver of my S&P puts into the bell only to find that I got a "nothing done" when I finally tallied up my day. Hate it when that happens.

    • Moving forward, I'm using a (rolled down) stop slightly above these levels (S&P 1521 is the trendline and the 50-day). Might be too tight ---and I think we've got more work to do on the downside--- but discipline must always trump conviction.

    • I'm gonna wait until the first half hour noise passes before fingering the pulse of the market. Lotsa emotion out there.

    • Watch Goldman (GS) please.

    • Gotta hop. Hit 'em hard, Minyans, and think positive. It begins within.

  • Brass Monkey--that Monkey Junkie! (10:02)

    I called a bit of an audible and faded (read: sold) the thrust higher, right under my rolled down stops. I don't know if this will prove to be prudent, hey, I'm just trading. My vehicle is the S&P and my risk remains defined.

    Goldman remains my primary proxy in terms of sentiment.

    Be back...

  • Flipper! (10:50)

    • BAC, JP Morgan Chase (JPM), Citigroup (C), Bear Stearns (BSC), Lehman (LEH), Morgan (MS)...As go the financials, so goes the poke.

    • And wait---Aunt Fannie has dipped her toe in as well. We haven't talked about her in a while but keep her on your radar as she just broke support.

    • Note the all-of-a-sudden 2:1 negative internals.

    • Art Carnage in the metal equity space. This is first support for that complex while XAU 148 is support part deux.

    • I spy S&P 1505 as an intermediate support before the mamaluke 1490 level.

    • While I wanna trail some stops, I've sold all of my morning fade inventory and half of my previously existing S&P put inventory into this meltage.

    • Slammed, friends--lemme hop.

  • Typing as fast as I can... (10:56)

    Audible part deux, Minyans--and sorry for the incessant postage...

    I'm taking my trade in the S&P puts (from last week), punting the "leaves" into this breeze.

    Maybe right, maybe wrong, always honest.

    I wanna watch for a while...

Some Additional Random Thoughts…

  • The Ten Trading Commandments allow us to adapt our style to the market. That allowed me to stick with this trade on Monday (given the bank laggage) and today (as we wiggled slightly above my set stop).

  • I was thisclose to buying the market for a bounce (when I punted my puts) as I watched the sticky green Goldman action. Why didn't I? 2:1 negative breadth, which coincided nicely with my need for a deep breath.

  • Sure enough, the S&P immediately snapped ten handles higher as I balanced the relief of selling my puts with the angst of missing the quick fix.

  • Then I reminded myself that opportunities are made up easier than losses, which is yet another one of our Ten Trading Commandments.

  • Then came the news that KKR's banks (led by Deutsche Bank AG) failed to sell $10 billion of senior loans to fund the LBO of Alliance Boots Plc. That immediately fanned the fearful flames as this dynamic is the root cause of market concern .

  • Which brings us back to the banks--they're sticky still in the face of this news. While I think the risk outweighs the rewards in this arena, the traction could prove to be a prescient daily market tell.

  • Ahead of earnings, BIDU options are implying a 20% move and Apple options are implying a 10% move. I think the best option, on both, is to stay away from the options.

  • One of my better sales guys tells me that he was house hunting in the Hamptons this weekend (must be nice) and saw a ton of supply. While anecdotal, at best, it would represent a marked shift in the context of the haves vs. have-nots. Thus far, the former has suffered while the latter have been insulated.

  • Is it Wednesday already? Is it really almost August? Are we really in 2007? My grandfather Ruby used to say that time is the most precious commodity and, as usual, he was spot on. Don't waste a day, Minyans--tomorrow is promised to nobody.


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