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Sam's Champion


In the markets there are periods of sunshine, occasional storms and, at times, the undeniable cold streaks.


The color of the sky as far as I can see is coal grey.
Lift my head from the pillow and then fall again.
I get a shiver in my bones just thinking about the weather.
A quiver in my lip as if I might cry.

(10,000 Maniacs)

I mused yesterday that living on the East Coast makes one appreciate the change in seasons. That, while the West Coast has a snazzy climate and sandy beaches, the shift into spring means more after chewing through a cold winter. Those cycles are as old as time and, in many ways, they mirror the financial markets. There are periods of sunshine, occasional storms and, at times, the undeniable cold streaks.

As anyone who lives in the tri-state area can attest, the last few weeks have been all over the place. We saw 70 degree weather, followed by a nasty blizzard, straight into the sixties and now, the mercury is in retreat once again. Indeed, each day brings another surprise, some pleasant and others we would rather avoid.

And the same can be said for the tape.

Last week, on the heels of the FOMC, the tape ripped higher as it digested the removal of the tightening bias. Yesterday, on the heels of Big Ben's conscious nod to inflation, the S&P gave back most of the rally. This morning, as I furiously pound my keyboard, the pre-market futures and Europe are looking sharply higher on the heels of a marginally stronger GDP report. It's enough to drive ya batty, I'll tell ya, and for alotta investors, it's doing just that.

For my part, and as most of you know, I think we're collectively in a pretty pickle. There's inflation in things we need to power, feed, insure and educate the world. That begs for a tighter rate policy. There's debt-laden consumers, the bust of the housing market and a finance based economy woven together by an intricate maze of derivatives. That warrants an accommodative Fed. The optimists want to dance with Goldilocks, but the realists? They'll offer that it's a matter of time before perception catches up to reality.

As a human being, citizen and, hopefully, one day a father, I'm worried. As a trader paid to play the game, I'm managing risk and watching my tells for daily guidance. There's a LOT to digest, Minyans, so rather than noodle and muse the morning away, lemme throw out some thoughts with hopes that they add value to your journey.

  • As go the piggies, so goes the poke. In that regard, keep close tabs on the BKX as it flirts and flaunts the 200-day moving average.

  • As it stands, the S&P has put in a lower high. Through objective eyes, that ain't bullish.

  • Iran is worrisome, as evidence by this article. Energy and metals remain intuitive complexes for long exposure for as long as we've got troops in that region.

  • Quarter-end buying could give "geopolitical unrest" a run for its money into the weekend. That's food for thought as we chew through the dew and is one of the reasons I'm defining my risk (S&P 1425, for starters, before 1450 as a backstop).

  • I enter today skewed to the short side with positive gamma and I'll look to trade around my risk. I expect (at the very least) a downside probe to test the will of the Matador Crowd.

  • I think volatility is in the early stages of a bigger, broader upside trend.

  • I've said it before and I'll say it again, Pepe De-pew that smell and his 5 Things are the best read on the Street--present company included! His vibe today has mas rhythm and good thoughts, including a nice heads up on Boots & Coots.

  • We've written extensively on the fallacies of lower (higher) crude being a catalyst for higher (lower) stocks. Given the geopolitical unease, that may have shifted a bit. If crude reverses lower, that could be a wink that tensions have eased. And IF that happens, stocks could collectively exhale.

  • I'm diggin' the fact that UCLA is at the back of the Final Four pack. But please notice (Minyan Charlie Poe) that I have not--and will not--diss the Gators.

  • SunMicro held the sexy six level (again) for those watching at home.

Mini-Minyan Mailbag


I've made this comment to you before, and I'll make it again as long as you write. Your emotional eloquence (I was a dedicated reader of you on RealMoney and now) has always been a plus factor. While I was long gone from the business even by 9/11, your insight into all things continues to impress. Thank you.

Minyan John

Minyan John,

Wow, thanks. I'll honestly tell ya that I sometimes forget there are Minyans on the other side of this screen. I have a tendency to 'share' too much at times--it's a learning curve I'm still exploring, having never written before filling in for a certain someone in early 2000. Someone once told me that, when in doubt, write about what you love and what you know. I try to stay true to that through the mistakes (lessons) that I'll inevitably make. In any event, thanks kindly for reaching out. Too kind.


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Positions in metals, energy, wel, sunw, spx
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