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Random Thoughts: Were New Lows a Necessary Evil?


If these levels hold, watch out for stampeding bulls.


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also An Angry World Tries To Find Its Footing.

The Scratch & Sniff! - 11:49 am

  • Just what the world needs---more leverage!

  • Sniffin' through our tea leaves, we'll have to go to the video tape as they're too close to call. I will say this, however, given the reactive mindset (sellers are lower, buyers are higher) and the proximity of S&P 840, I'll betcha a buck we don't end the week anywhere near this level.

  • I'm leaning long, which is different than drawing a line in the sand. I learned a long time ago that we're all just pawns in this game.

  • We've long discussed financials in drag as having outsized risk. We've seen that in spades with General Motors (GM) and we need to keep a close eye on General Electric (GE) (-8%). While everyone is looking at the former as a potential elephant, the latter matter is entirely more disconcerting.

  • Did Christian Bale forever shift Phil Collin's legacy?

  • Speaking of which, I found my Knebworth CD last night and gave it a spin. Pretty awesome, particularly since I attended the concert in London while I was working as a piss boy at Morgan Stanley.

  • Remember the duct tape. Remember the duct tape. Remember the duct tape.

  • I don't know about y'all but I, for one, am looking forward to surrounding myself with solid human capital, chowing down some southern BBQ, listening to four awesome bands and bellying up for a few brews. We'll do that--and more--at Festivus on December 4th in NYC so if you haven't locked your spot, get involved. It promises to be some humdinga!

LIke a moth to a flame, burned by the fire... - 12:52 pm

So here we are, the 2008 lows, where everyone and their sister has set their stop-loss. In a year filled with meaningful moments, today's trade--November 13th, 2008--is perhaps the most important inflection of the year. Hold, and we'll scatter higher. Fold, and we'll vacuum lower. And you wanted to be a trader...

Some top-line vibes in no particular order:

  • Two sectors that are out-performing today? Pharma and consumer non-durables. While I've taken my trade in the latter, the action warrants a mention as they were one of our 2008 top ten themes.

  • The pushback is palpable on anything remotely constructive. I understand "why," mind you, but it reminds me of the "short crude" call in the spring and 100% cash vibe this summer. Doesn't mean it's right but again, it's worth noting.

  • A little levity goes a long way.

  • I agree with Bennet that the risk of a false break in the S&P is high. That's pure gut, mind you, but so it's said. Either way, it looks like we're about to find out. Discipline over conviction as we find our way please.

  • The little critters that could. Think positive and send good vibes, Minyans, as we would love to accept this hardware on behalf of the entire Minyanville community.

Terrapin Station? - 1:15 pm

I'm adding exposure into this "break," including SSO, DXO, Weatherford (WFT) and BHP Billiton (BHP).

Why? 1) My trading gut. 2) Mass respect for my fellow professors, who seem to be arriving at a similar conclusion through distinct trading lenses.

Time will tell, we shall see and, as always, not advice. We simply share our process with hopes it adds to yours.

Happy hunting Yo.


Did you know the doors to Festivus 2008 are officially open? Have you yet locked your spot for the critter trot as last year's soiree sold out? (This is our annual event to commingle our professors, partners and Minyans while chowing down and listening to live music. The very best part? It's for the kids in the good name of my grandfather.)

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Positions in SSO, WFT, BHP
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