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Random Thoughts: Is the Worst Behind Us?


January lows and meaningful moves.

  • The big news today? Well, you could wax on Spitzer or wane on the long bond rally, I suppose. Or you can chew on the fact that Mary Ann-yes, that Mary Ann of Gilligan's Island fame-was arrested for smoking weed while driving. There is yet no word on the whereabouts of Ginger although eyewitnesses place her at a near-by bakery.

  • Chatter abounds that the market successfully held the January intraday lows both in the S&P and the DJIA. We sensed the potential for rear-view rationalization (when the tape probed the closing lows) but the argument holds just as much water here.

  • Is the worst behind us? I'm not ready to subscribe to that view but I will say-and I most certainly will respect-that traders will likely buy dips above the double bottom that's now in place. The caveat, quite obviously, is headline risk and yes, that still exists.

  • Remember the writing on the wall? It continues to scribble, eh?

  • What did I do on this morning's opening? Absolutely NOTHING and it wasn't for a lack of trying. My systems-yes, the same ones that were completely replaced and reconfigured last night-crashed on the opening, costing my opportunities, 4,750 hair follicles and a sore jaw from clenching. Inhale. Exhale. Inhale. Exhale.

  • Do you think the founder's wife calls him a hypocrite whenever they get in an argument?

  • Remember, it isn't just the technicals that matter, it's the psychology that surrounds them. Those two metrics now square off against the structural and fundamental metrics.

  • You know what keeps repeating in my head? No, not this. It's the axiom that the sharpest rallies occur in the context of a bear market.

  • The dollar is getting tagged this morning on what Bloomberg calls "speculation that the Fed rescue package won't succeed." I have a slightly different take. The dollar should have fallen yesterday on this latest Fed bailout plan--it is, by definition, hyperinflationary--and the fact that it didn't was one of the bigger shockers of the day.

  • RIP Justice Harrison, my brother's beloved pooch of 14 years who was put to sleep this morning after a wonderful life. You will be missed.

  • The market doesn't care how or why it goes higher. We can debate the merits and moral hazard of the $1 trillion in government money injected since August and, most certainly, the ramifications down the road. In terms of the here and now, we simply gotta assimilate and, hopefully, participate on both sides as we find our way.

  • Do you think she was on her way to a Rolling Bones concert?

  • Jeff "As Good as it Gets" Saut said Monday that "A 90% Up Day occurring quickly after the 90% Down Day would suggest that a sustained rally lasting about two or more months is likely." To be frank (Hi, I'm Frank!), I don't really follow this stuff but I know alotta smart folks that do. Yesterday, so you know, was a 90% up day.

  • In terms of my Schlumberger (SLB) puts, this is what I'm looking at as defined risk.

  • Lest you had any questions regarding the level of lore for piggies so sore, BKX 75 is about as clear as a bell. And no, I've never seen a clear bell.

  • Wanted: A sense of humor, a dose of perspective and curly fries.

  • Speaking of perspective, while the January double bottom is all the rage right now, we can't forget the series of lower highs that litters every major index. That won't come into play for some time but it's worth remembering as we fetch ahead.

  • My morning that is only slightly better than sticking my right arm in a blender. What is it we say about opportunities being made up easier than losses? Tell it to the judge, Lefty, as we settle back into a groove.

  • Bear Stearns (BSC) has qualified as one of our top-tier tells based on the focus it's garnered in the investment community. I don't have a horse in that race---it seems mighty crowded to me--but I'm watching it. I will say this--where's there's smoke, there's usually fire. In the absence of news, however, perception can shift that it's been snuffed out.

  • After a meaningful move either way, there is typically a probe in the same direction the following day. Along those lines, the thrust higher makes sense. The real test, however, will be how the tape responds to the supply try. Remember, when Google and Goldman are pointing in the same direction...

  • Speaking of Bear Stearns, I will be participating in its 10th Annual Techapalooza pow wow tomorrow evening. There are some quality peeps over there--including my friend AC Morgan--and I'm only too happy to chime in. As Wall Street gets painted with a blame brush, the good folks among us gotta stick together.

  • I'll be mixing it up on Fox Business Happy Hour with Eric Bolling tonight for the first time as he sits in for Crocket, I mean Tubbs, I mean Cody, who is on location in Miami. Should be an interesting noodle.

  • We're officially over the weekly hump, Minyans, I hope this finds you well.


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