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Monday Morning Quarterback: Salvation Lies Within


To get through this we must go through this.

Therein lies the greatest risk to this entire dynamic. The Blame Game is good and thick and societal acrimony could potentially shift into social unrest stateside and abroad.

And that's not something anybody wants to see happen. Not for us, not for our children and most certainly not as we attempt to defend the foundational elements of our U.S. Constitution. This is where we'll earn our stripes and earn them we will.

Some Random Thoughts:

  • I wrote a column a few weeks ago called The Age of Austerity.

  • Minyan Peter offered an insightful adaptation called The Age of Self-Preservation.

  • To his point, it's worth noting that several states-most notably California and New York-are already beating a path to Washington DC.

  • George Soros on where we are and where we're going.

  • The onus is on each of us to sync our time horizons and risk profiles and play within our particular comfort margin.

  • With that said and given my cash hoarding for the better part of this year, I began putting money to work last week for a counter-trend upside trade.

  • I entered Friday with two legs in my metaphorical bull costume (50% upside conviction), added an arm into the abyss (75%) and humbly slipped that appendage out after catching a 70 handle rally in the S&P. As a result, I enter Monday with both legs in the bull costume and the positions to prove it.

  • They are centered in the energy space-Weatherford (WFT), Transocean (RIG), the OSX (oil service index)-with some Ultra QQQ ProShares (QLD) tossed in for good measure. While my initial entry points are higher, I've aggressively traded them around two outsized Snappers last week.

  • I will again share that this is with the trading bucket of my book as my long-term nest egg remains 100% in cash backed by T-bills. I now have to ascertain if capital preservation will shift to capital conversion and, along those lines, the Japanese Yen (FXY) and Gold are viable vehicles at the right price.

  • The "easy" trade today could very well be the first probe lower. That, of course, depends on where we start.

  • I also plan on doing work on China and India as they'll be the primary winners of the inside-out recovery that brings the Golden Age of Globalization back to mainstream vernacular.

  • So we're clear, I'm looking for a sharp rally that shifts psychology and seemingly sounds an "all clear" before what might be the harshest wave lower. Will that happen? I'm taking it one step at a time and taking nothing for granted!

  • Intel (INTC), Johnson & Johnson (JNJ), JP Morgan (JPM), Coca Cola (KO), eBay (EBAY) and Wells Fargo (WFC) will report earnings this week. While nobody is expecting good news-and fundamentals pale in comparison to structural and psychological metrics-I'll remind ye faithful that field position matters.

  • Good news that's not great is sold in overbought markets while bad news that's not horrific are typically bought in oversold tapes.

  • If you want some historical perspective, check out a chart of the DJIA since 1900.

  • There have been a lot of technical prognostications of late. Remember, given the outsized derivative machination and debt dependency in a finance-based economy, historical perspective need not apply.

  • With that noted, please "see' that the banks have thus far held a double bottom at BKX 47.

  • The rush to disassociate from Wall Street is in full effect. That will last for quite some time and should be recognized by those in the industry.

  • When we first offered that there was an invisible hand in the market, people giggled behind our back. Ditto the Depression vibe, which was beyond collective comprehension at the time. I'm not saying that we're always right-nobody is smarter than the market-but I will ask you to consider things you otherwise might disregard.

  • David Owen, who was foreign secretary from 1977-1979, wrote a weekend column opining that Israel could strike Iran before the elections. That would seemingly sync with a scary sense I offered last year that began to crystallize anew last week.

  • Hey Sam-Chill, I need Alice for some housekeeping items. They are as follows:

    • Minyanland continues to grow in leaps and bounds, with 230,000 critter kids learning how to earn, spend, save and give. I know the world is tough-but it's never too tough to prepare the next generation for what's to come in a fun way!

    • There are 53 more days-count 'em-until our annual Festivus soiree that will make you smile so hard your face hurts. Good grub, great friends, kickin' music and-yes, it's all for the kids-so if you haven't locked your spot for our holiday trot, get involved! It's the easiest trade of the year!

  • Good luck, Minyans, and remember that profitability begins within.


Positions in WFT, RIG, OSX, QLD
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