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Random Thoughts: What Will Month-End Bring?

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Keep risk tight as we star a new 30 day stretch.

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  • Somebody stop me--it's sorta like lyrical addiction!

  • Do I think there are more shoes to drop for the financials?

  • Dude, does Old Mother Hubbard like Jimmy Choos?

  • Of course there are-regardless of which way you're (I'm) positioned, never rationalize risk.

  • The trick is to identify the thin layer of opportunity that resides between perception and reality.

  • The Bristol-Myers (BMY) - Imclone (IMCL) deal is an incremental positive (M&A always is).

  • Please note that last time I checked Webster's, "incremental positive" isn't defined as a "panacea." It's simply a piece of a multi-linear, ever-changing puzzle.

  • MBIA (MBI) is a pure trade.

  • "Heck, they're all pure trades until dried-out, brain-dead skags like Boo drag them down and convince them they're no good. You so much as scowl at my niece, or any other kid in this school, and I hear about it, and I'm coming looking for Boo! Take this quarter, go downtown, and have a rat gnaw that THING off your face! Good day to you, madam."

  • I've been an educator for thirty-one POINT three years...

  • N's over S's (the four-letter freaks are out-performing).

  • I've still got a small Schering Plough (SGP) position, which I'm holding (as opposed to selling into the upgrade). My (admittedly early) view that pharma and consumer non-durables will outperform remains in play.

  • Continental (CAL) $16 is "break down" resistance, if and when. Tom Petty would be proud!


The Following Buzz Appeared at 9:43 this morning and is being shared for the benefit of Minyans not yet on the Buzz (what's keeping you?!?!?)

I entered this morning's fray with small positions in the financials (Citigroup (C) calls, MBIA (MBI)).

Into the opening punk, I added back my Citi calls (sold into yesterday's rally) and scooped some Wachovia (WB) calls (traded dry yesterday) and Mother Morgan (MS) calls ( will have
acne through $40, if and when).

My risk leash is tight (pure trades) but
I'm a buyer of dips into S&P 1235 and BKX 60 for the 'bear market rally through S&P 1300.

Nothing crazy, mind you but that's my thinking as we find our way.

Sometimes right, sometimes wrong, always eating...

More Randoms

  • Into the upside reversal, I forced myself to sell a snivlet of the Citigroup calls as a function of discipline.

  • Buy dips, sell blips, stick, move, duck, goose and all that jazz. Analogies abound but the message is the same: the mechanics of the swing are always more important than the results of the at-bat.

  • If you could play any instrument in any band, what would it be and who would it be with?

  • There's an "easy" trade each day. That Snapper off this morning's lows might have been it.

  • "Easy" is a relative term, I know.

  • If and when Disney (DIS) trades with a $20-something handle, I might dip my schtick in Mickey's wick.

  • Please note S&P 1282 and BKX 68.5 on a closing basis.

  • IF and when, they would represent "higher highs" after the "higher lows," yet another stealth positive. And yeah, that's a BIG IF.


Musings on Month-End

  • Hedge funds are having their worst month in eight years.
    • The popular "long commodities, short financials" wishboned performance.
    • Some funds are reporting being down 12%.

  • Mutual Funds had a better month.
    • Especially the ones that averaged down in the Financials.

  • Recent flows have been dominated by the Hedge Funds.
    • Volumes have been quiet vs. earlier this month.

  • Unforeseen crosscurrents on the close.
    • Today will be interesting to see how the Financials close, especially with the rally we witnessed yesterday in Crude.
    • Has the hedge fund community covered their shorts in the Financials?
    • Will they press their short into the close?
    • Or will the MF window dress their Financial long exposure?


R.P.

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Positions in WB, C, MS, MBI, SGP
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