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Random Thoughts: Bullish Sentiment Dominates the Street

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Yesterday's Investor's Intelligence sentiment survey (that showed 62% bulls) was the highest reading since December 2004.

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  • Hear Ye, Hear Ye! NYC area Minyans---we're gonna host a special edition Minyan Happy Hour tomorrow (Friday) at 4:30 PM at the Bull & Bear (49th and Lexington ). MVHQ will be there in force and we invite ye faithful to join us for an end of week smile!

  • Glass Houses? Alan Greenspan spoke overnight and said that he doesn't expect a rapid decline in the dollar. Considering that the greenback lost 33% during the last five years of his tenure, we're unsure what he means by "rapid."

  • Psychology patience? Yesterday's Investor's Intelligence sentiment survey (that showed 62% bulls) was the highest reading since December 2004.

  • And before that? January 1987, before a 25% equity rally that preceded the crash.

  • Actions and Reactions. Yesterday we touched on the fact that Citigroup (C) pulled its buyback and JP Morgan (JPM) was posturing towards the same. They're not alone. While we're in the thick of earnings season, a measly $2.9 billion of new buybacks were announced between Friday and Wednesday.

  • On Tuesday we noodled the resonance of S&P 1523. It's still vibing, for what it's worth.

  • The obvious focus today will be on the financials after Bank of America (BAC) and Washington Mutual (WM) stunk up the overnight joint. Since the summer, we've seen rotation out of these names and into tech. Now, with eBay (EBAY) down 6% as well, the risk of an outright migration increases in kind.

  • Watch the beta brethren-particularly Research in Motion (RIMM), Apple (AAPL) and Yahoo (YHOO)-on the back of eBay. They're trading dry and will likely try give the Matador side a try.

  • Yep, the dollar is getting waxed again (DXY -70 bips). I'll continue to offer that this is a necessary element---but not a guarantor--of an asset class rally

  • What else trades dry? Energy and metals, following yesterday's well deserved rest.

  • Yes, we've still got serious negative gamma (in front of tomorrow's expiration) and, as such, there is two-sided swing risk. Trail your stops, respect the process and be the ball.

  • The best piece of advice I was ever given in business? Trust the people you work with.

  • The most beneficial "self-advice?" View obstacles as opportunities.

  • Note the action in the FXI, which is now off 5% and giving back all the gains since... yesterday? Hey, it's still almost a straight double since the August lows.

  • Y'all see where Uncle Freddie is trading?

  • Can Aunt Fannie be far behind?

  • Snapper is trying to climb through the window and trigger a negative gamma upside surprise (watch the financials and breadth for guidance).

  • Will he be successful? I'm not sure. But I will say that if he's not succesful soon, the other side of that gamma sword could come into play.

  • Hand up if you've got Hank on the brain into tomorrow's expiration!

  • Many thanks to our good friends at TD-Ameritrade for their excellent effort. What am I referrring to? Login to your Ameritrade account and you'll see!

  • Minyans who can't make it to the Bull & Bear tomorrow (49th and Lexington) should tune into Fox Business at 5:00 EST for a lil' surprise. OK, it's a big surprise.


    R.P.

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