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Random Thoughts: The Bernanke Put


Ben's could put Elmer's to shame.

  • This guy must be having a massive day today! Then again, he hasn't been short in quite some time so he's likely just making back some coin.

  • I hear ya Bob Sinclair, it's nutty out there as the world returns to its reward chasing ways. With perception of the back-pocket Fed in tow, market psychology-tied for the top seed with the structural metric-is making a run and having some fun.

  • Investors are trading as if we're out of the woods, looking for "bang for the buck" exposure rather than traditional keepsakes in a slowing economy.

  • Where you stand is a function of where you sit, we know, but if I were an investor (rather than a trader), I would continue to look to consumer non-durables rather than sexy hot sirens.

  • Remember that expiration hangovers typically take a few hours to recede as dealers square their extraneous risk. Today's gap higher and the subsequent follow-through likely caught a few option traders leaning the wrong way. That's partially responsible for the trajectory this morning.

  • I never thought I would miss cat hair on my clothes but I most certainly do.

  • Remember, one of our reasons to be bullish was that markets don't melt when everyone is looking for it. One could argue that few, if any, are looking for it now. Not saying it happens, natch, just offering the other side of the trade as we did one week ago today.

  • As discussed in this morning's opening missive, I'm open-minded to the notion that the S&P could continue to run into the 1380-1405 zone. Still, consistent with the discipline that's served me in such good stead, Winky Wright and I plan to jab at that journey one step at a time.

  • The Bernanke/Paulson put makes the Greenspan put look puny in comparison, eh? We indeed live in interesting times, one that will likely leave our children with the bar tab.

  • Don't forget to register for the Bernanke Brackets to win a trip to the NCAA Championship game in sunny San Antonio!

  • The most intriguing action I'm seeing is Bear Stearns (BSC), which is trading above the augmented deal price. It's equally interesting that this is being spun as a positive despite it remaining 90% below last summer's levels.

  • See the dollar, which is again creeping up. The "asset class deflation vs. dollar devaluation" dynamic hasn't "mattered" the last two sessions but A) it's been bang on accurate for as long as I can remember and B) it's a big picture lens (as opposed to a daily trading tell).

  • Lehman (LEH), Fannie (FNM) and General Electric (GE) are among the "financially oriented" firms not participating in the ripping rally. If we begin to test this pest, those issues will continue to under-perform.

  • Congrats to Minyans Barrett Randolph, John Burke and Robert Bloch for sitting atop our Minyan March Madness leader board. The winner will receive some snazzy Minyanville schwag (and bragging rights for one year) while the "non-winners" are encouraged to make a donation of their choice to the Ruby Peck Foundation for Children's Education. Giving back has always been at the core of our community and we continue to stay true to our roots.

  • Traders tend to focus on risk when the tape is on its heels and reward when the market is rallying. This is your friendly Minyanville reminder that this volatile market continues to have two-sided risk and positions should be sized (smaller) accordingly.

  • Don't underestimate the power of S'Mores Therapy. There's something pretty powerful layered between marshmallows, graham crackers and Hershey's chocolate.

  • The greatest trick the devil ever pulled was convincing the world that he didn't exist. The greatest trick our Federal Reserve ever pulled is convincing the world it will always exist.

  • Look for Pepe Depew on tonight's FBN America's Nightly Scoreboard as he walks through Ben Bernake's Detroit Region. While I've got a face for radio, he's got a punim made for the small screen.

  • Hit 'em hard and remember, Minyans, emotions are best left for weddings and funerals.


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