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Freaky Friday Potpourri


Freaky Friday is upon us and there's no rest for the weary.


Good morning and welcome back to the flickering pack. After a hairy few weeks and some old fashioned fright, we power up the Friday pup with one eye on the tape and the other on the clock. Volatility is prickly beast and after years of conditioned complacency, more than a few traders are looking forward to our requisite two-day respite.

As I was out-of-pocket yesterday, I entered this session with relatively fresh eyes and, following my actions on Wednesday, a rather tight pad. I've been very active these last few weeks, both ways, with winners and sinners littered in the lot. Given the dicey dilemmas we together face, I'm currently comfy with dry powder and an opportunistic approach.

With that said, Freaky Friday is upon us and there's no rest for the weary. In that vein, I offer the following vibes as we truck through the muck. Some are serious and others pure smiles. That's entirely alright-in the current world, a little levity goes a long way.

  • Bear Stearns (BSC) is leading the financials astray once again after the S&P revised their outlook to negative. Their credit default swaps widened 10 bips (to 135) on the news and the stock, already off 20% in the last few weeks, is taking another 7% haircut. Remember, as go the piggies, so goes the poke.

  • Circle August 15 on your calendar. That is 45 days before the end of the third quarter and the date when investors in many hedge funds can give notice that they are pulling out their money. If many give notice, it could spark a rash of selling by funds looking to raise cash to cover withdrawals.

  • Keep Washington Mutual (WM) and Countrywide Financial (CFC) on your radars. Both have been hit hard for obvious reasons and are emerging as psychological mortgage proxies.

  • Ben Bernanke's bovine bedfellow?

  • Minyanville would like to thank our awesome summer interns-Annie, Psycho, L.C and Millie-for a fantastic job and newfound friendship.

  • Engine Room, More Scream!

  • The metal equities are exhibiting relative strength today for the first time in a while. I continue to believe that this complex-and energy, at lower levels-will have secular tailwinds vs. financials and high multiple tech.

  • That is a big picture thought, naturally, and independent of whether the oversold financials will be ripe for an upside trade soon. The context of time is an essential ingredient to any trading or investment discussion.

  • If a retest of an important technical level is the textbook spot to get involved, do you see the "wide angle lens" in the homies? Kinda hard to believe given the carnage we've seen but charts don't lie.

  • Keep an eye on the greenback (-50 bips) as it retests the all-important DXY 80 level.

  • With breadth 3:1 negative and the financials falling apart, I would think that Hoofy has a very tight turnaround time today. Tapes that are heavy all day tend to end that way (although there are outliers, as we've recently seen).

  • Keep half an eye on beta--- (BIDU), Under Armour (UA), Research in Motion (RIMM), Amazon (AMZN), Google (GOOG)--as they're trading sorta dry. They did so as well on Wednesday and while past performance is no guarantee of future results, it warrants a noodle as we fit the pieces together.

  • Answers I Really Wanna Know…

    • Have you broadened your S&P lens to "see" the importance of the recently-held level?

    • How about the banks, which tickled support dating back to 2003 following the sharp 10% slide?

    • Did you see Dr. J's play-by-play of the error that lighted Snapper's fuse on Wednesday?

    • Maybe that fat finger simply served to ignite the fright and plant the bovine seed in a very thin and whippy trip?

    • After all, doesn't it make sense, given the art carnage and suddenly sullen sentiment, that the bulls would circle their wagons there?

    • Is anyone else tired-I mean really tired-after all this volatility?

    • When I bought S&P puts on Wednesday and they appreciated ten cents on a ten-handle dive, wasn't that all I needed to know that vols were a tad chubby?

    • How many times can I see the Police without being tagged a groupie?

    • On the shorter-term stuff, is a rally back to S&P 1490-and a failure there-too "easy?"

    • Who's the joker who wallpapered my office door?

    • Will today's economic data pale in comparison to the structural forces much like the fundamentals did?

    • Are you keeping your eyes peeled for fins if you're swimming towards Matador Island ?

    • Has anybody ever bought anything from Jos A. Bank (JOSB)?

    • Can I leave early if I promise to lose only ten pounds?

    • Are we there yet?

  • Fare ye well into the bell, Minyans and have a mindful weekend.


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Position in metal equities.
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